Wiki Selling TSLA Options - Be the House

[buttershrimp]

I have to say, @UltradoomY strategy has been a game changer for me. We will see how it does when the dust settles and there is a time and place for everything but my goodness!

I’ve named @UltradoomY strategy the Time Cop Turbo Wheel. I haven’t felt comfortable selling calls this week, and I’ve wanted to try a spread but have been too terrified to try it looking at the losses even with short runways. I’ve had great results, but the neat thing to me is even controlling for the first two days of the week, it was still profitable but takes capital commitment.

But the rolling for time rather than taking all the profit as drastically changed my approach.

Locking in profit by rolling for time on bought options is the craziest thing I’ve ever seen.

Every new position wants to become a Leap and all you have to guide it home.

Are you too good for your home? Answer me!

 

[adiggs]

Why would you have to roll for a debit? In the case it’s very very deep ITM?

It won't be by much - when really far ITM differences in IV can lead to a same strike roll carrying a small net debit. Well - between the IV and the bid/ask spread. I've done a few rolls for a .02 net credit. Because .01 left me with a small net debit after commissions.

 

[Criscmt]

It won't be by much - when really far ITM differences in IV can lead to a same strike roll carrying a small net debit. Well - between the IV and the bid/ask spread. I've done a few rolls for a .02 net credit. Because .01 left me with a small net debit after commissions.

Cool! How deep ITM were those calls in the case of those 0.02 net credit rolls?

EDIT: Never mind, @MikeC already gave an example. Didn’t catch up with all messages when I replied to you.

 

[blckdmp]

How early can calls be assigned practically? How much extrinsic value needs to remain for them to not be assigned?

Say the stock is at $686 early in the day tomorrow and stays there. When do I need to roll to ensure no assignment?

This "instant midday assignment" scenario always scared the bejeezus out of me. However, as far as I can tell, the actual assignments happen after close. *** This is very much "not advice", "IMO" etc... I could be exactly wrong on this and would love for someone to let me know if I am! ***

I found this from the Options Industry Council website, which seems to be a legit a source as there is on this. (They are basically an education arm of the OCC):
"Assignments are determined based on net positions after the close of the market each day. Therefore, if you bought back your short call, you no longer have a short position at the end of the day and no possibility of assignment."

Options Assignment

Options assignment FAQs answered here. Learn about assignment timing, in-the-money calls, and your obligations.

www.optionseducation.org

If anyone knows this to be false, please, please let me know!!!

 

[Criscmt]

This "instant midday assignment" scenario always scared the bejeezus out of me. However, as far as I can tell, the actual assignments happen after close. *** This is very much "not advice", "IMO" etc... I could be exactly wrong on this and would love for someone to let me know if I am! ***

I found this from the Options Industry Council website, which seems to be a legit a source as there is on this. (They are basically an education arm of the OCC):
"Assignments are determined based on net positions after the close of the market each day. Therefore, if you bought back your short call, you no longer have a short position at the end of the day and no possibility of assignment."

Options Assignment

Options assignment FAQs answered here. Learn about assignment timing, in-the-money calls, and your obligations.

www.optionseducation.org

If anyone knows this to be false, please, please let me know!!!

Thanks @blckdmp

@bxr140 @generalenthu @Lycanthrope @TheTalkingMule and others,
Do you have any inputs here?
What is the right timing (time of the day, spot price) for acting on ITM covered calls, especially on the expiry date?

Did anyone not get a chance to close or roll their calls on the expiry date, in other words, was there assignment before the market close on expiry day?

My plan

• Look at the OI across various strikes over 650, wait to see the initial action and then act on the calls, and call spreads I have.

If it helps in assessment, I have 675C, 700C, call spreads 700C/715C, 705C/720C.
To cover some of the losses on the call side, I rolled my put spreads up, to 625P/640P, from 560P/570P.

Looking at the (lack of) messages on this thread, is it just me that's yet to roll the 06/25 calls?

 

[samppa]

I've been expecting some sort of run with the stock price, so I have stayed away from call side completely..
Just been selling put credit spreads. Currently I have open a bunch of +p650/-p625 (sold on tuesday this week) and yesterday sold some +p685/-p667.5 spreads. These are for jul 02 expiry.

These are covered by margin on held stock, also account has some cash.. credit/margin required ratio beats naked with these spreads hands down.

 

[InTheShadows]

Ok Dunce cap is coming on.

So looks like my $685 CC's are somehow OTM but barely. I don't know what to do, lol. I am certainly prepared to roll if need be, but I'm not sure on timing.

How early can calls be assigned practically? How much extrinsic value needs to remain for them to not be assigned?

Say the stock is at $686 early in the day tomorrow and stays there. When do I need to roll to ensure no assignment?

If the stock is at $684 early in the day and stays there, it is unlikely the premium will go down sufficiently until the last hour or so to avoid rolling. So if the price is close to strike, I will likely have to roll either way, right?

I always had a plan for what to do with ITM CC's, but ATM is hard!

I have had two short put assignments. Both happened on the night before expiration and both times I had a GTC roll out order in them. I no longer place GTC roll orders.

 

[Drezil]

I am just looking for new trades for next week and thought i share a bit.

Thesis: TSLA will close at 750 next friday. I am bullish, although the option-market sais: call-walls at 700 & 750 and put-support only at 650 (and slightly at 700).

Probabilities of profit are implied by the option-market. I sorted them by break-even and only delta-positive combos.

I.e. the 740/790 Bull Call look like "yeah, some betting-money would be appropiate here".
the 750/677.5 Bull Put is a more "conservative" "we stay above 700"

Also the margin-impact would be on my current portfolio & may vary much for you.

I like this lab for getting inspiration I often forget about RiskReversal or non-equal things like "Buy 3 calls & finance most with 1 short call".


What things would you play?

 

[juanmedina]

How is everyone feeling? Max pain is at $652.5. When will traders start to close all their options? I am going to try to wait until MMD to close and roll some calls.

 

[UltradoomY]

How is everyone feeling? Max pain is at $652.5. When will traders start to close all their options? I am going to try to wait until MMD to close and roll some calls.

Max pain is not a factor this week. (IMO)
Too many actual buyers are showing up now (volume and RSI indicators)
MM's have power but only when whales aren't eating.
I suspect they will do everything possible to keep it under $700 but right at it - $695ish

 

[Drezil]

Don't look at max-pain.. look at the graphs themself & edit everything out of the "interesting window" to 0. Because these things are hedged since weeks.

In play this & next week is a "huge" put-wall at 650 & call-walls at 700. If "they" can sell lots of 700 puts for next week today this may take out (=hedge) the 700 wall for next week. 750 is the next barrier with similar heights as 700 this week.
Thats why my thesis back a page was 750 by next friday.

Edit: never forget: this is all IFF market-makers get their way. When massive buying-volume shows up than their ship is going to sink ..

 

[juanmedina]

Max pain is not a factor this week. (IMO)
Too many actual buyers are showing up now (volume and RSI indicators)
MM's have power but only when whales aren't eating.
I suspect they will do everything possible to keep it under $700 but right at it - $695ish

yeah I agree most the puts are really old contracts. There is a lot of $700 calls I really hope they push the SP down for selfish reason lol.

edit: I hate days like this.... Power E-trade just stopped working. When I ever I need to do something important it never works.

 

[UltradoomY]

Don't look at max-pain.. look at the graphs themself & edit everything out of the "interesting window" to 0. Because these things are hedged since weeks.

In play this & next week is a "huge" put-wall at 650 & call-walls at 700. If "they" can sell lots of 700 puts for next week today this may take out (=hedge) the 700 wall for next week. 750 is the next barrier with similar heights as 700 this week.
Thats why my thesis back a page was 750 by next friday.

Edit: never forget: this is all IFF market-makers get their way. When massive buying-volume shows up than their ship is going to sink ..

Totally agree with this - MM's do not have control when whales eat!

 

[dl003]

Whew, finally some breathing room. Closing out my calls this week. Bought back 100 shares on margin and sell a 730 call on them for next week. Will probably roll this one out until it hits 800. Going into next week with 5x 800 and 16x 850 for 7/9. I think we can hit 750 easily before 7/21. Now is the time for shorting puts IMO.

 

[juanmedina]

This is true and you will have roll calls for longer times frames but I don't think that's a big deal. We all have a price that we are confortable with loosing our shares; I plan to retire some day.

I end up rolling the 6x 665cc's to 690cc 07/02 this is the first time ever rolling calls. I am going to wait until tomorrow to decide what to do with the 670-680cc calls.

I end up rolling some contracts to 2x 710cc's, 5x 700cc's and 6x 690cc's for next Friday and closed 7 contracts. I end with a lost of about 4k for the week. I guess not so bad, not so great. 710/720 and 715/725 call call credit spread capped my loss.

OT: On the Starlink IPO about Elon's tweet that he will let Tesla retail investor buy shares, I assume he is talking about long term share holders. My understanding is that selling weekly call resets the stock holding period. Is that accurate? is there a way to see if the shares a short term or long term in E-trade?

 

[tradenewbie]

I end up rolling all my 650cc & 660cc this week to 660cc & 677.5 next week. Each for only a tiny 1-1.5 premium.

Well, never expect the price will go up crazy like this week. Although very likely the price will cool down early next week (maybe even tonight) and thought about just let my shares got exercised, end up I prefer to sleep well tonight and worry about the drama again next week instead

 

[tradenewbie]

Man, again & again, within 5 mins after I decide to roll, the SP starts dropping....

I was waiting for the price to drop below 675 since market open as I expect it would continue to drop few more points to 670 level. After waiting for 2.5 hours, it still not dropping to that level so I roll when SP hits 680. Within 5 mins, it started to drop.........

 

[buttershrimp]

I am just looking for new trades for next week and thought i share a bit.

Thesis: TSLA will close at 750 next friday. I am bullish, although the option-market sais: call-walls at 700 & 750 and put-support only at 650 (and slightly at 700).

View attachment 677531

Probabilities of profit are implied by the option-market. I sorted them by break-even and only delta-positive combos.

I.e. the 740/790 Bull Call look like "yeah, some betting-money would be appropiate here".
the 750/677.5 Bull Put is a more "conservative" "we stay above 700"

Also the margin-impact would be on my current portfolio & may vary much for you.

I like this lab for getting inspiration I often forget about RiskReversal or non-equal things like "Buy 3 calls & finance most with 1 short call".


What things would you play?

I was going to say 726 next week.... but I think it will touch 740.... also my psychic powers dont' kick in till Monday next week

 

[tradenewbie]

Man, again & again, within 5 mins after I decide to roll, the SP starts dropping....

I was waiting for the price to drop below 675 since market open as I expect it would continue to drop few more points to 670 level. After waiting for 2.5 hours, it still not dropping to that level so I roll when SP hits 680. Within 5 mins, it started to drop.........

I end up rolling all my 650cc & 660cc this week to 660cc & 677.5 next week. Each for only a tiny 1-1.5 premium.

Well, never expect the price will go up crazy like this week. Although very likely the price will cool down early next week (maybe even tonight) and thought about just let my shares got exercised, end up I prefer to sleep well tonight and worry about the drama again next week instead

I would be happier if the SP won't drop to 665-670 level tonight, otherwise I really get pissed off.

 

[ReddyLeaf]

I was going to say 726 next week.... but I think it will touch 740.... also my psychic powers dont' kick in till Monday next week

Well, you nailed it his week. Please keep giving us your insights. If I’d listened to you, I’d be $20k richer today. Still haven’t logged everything, but I know it’s a big loss this week. Edit: Rolled-p670s to next week for about $14 credit. I’ll lose my -c637.50s because not enough cash to buyback with that $50 SP jump. So, next week will be selling aggressive puts, maybe 700-750s to keep from falling off the wheel. I expect the SP to touch $750 next week, but then drop back off after the quarterly P/S report. Hopefully I will be able to get some stock back. I will be about 60:40 stock-puts on Saturday, way below my 80:20 target.