Wiki Selling TSLA Options - Be the House

[Tslynk67]

This is what happened to me earlier in the year - I got both legs deeply ITM. I got into a bad enough inverted strangle that I could finish with unrollable positions on both sides - talk about awkward

I'm trying to work out how this scenario could arise...?

For tracking my options I'm making a spreadsheet - the hardest part is that when riding multiple contracts in a single buy/call, they often get exercised a slightly different prices leading to a multiple lines for the same trade in the exported Excel, which makes doing a simple lookup impossible without tidying up the data first

Plus I don't have Excel at home anymore, I'm doing it with Apple Numbers, which is similar enough to Excel, yet different at the same time to make it a slow and painful experience

 

[redan]

STO 45x $750s expiring Friday for $1.20. Felt like a down day today. May just be in and out of these today as I expect we'll start moving higher again tomorrow. May sell some puts also. BTC my -p$650s out for 50% profit yesterday once we kept getting rejected at $695. Could be time to sell them again.

 

[corduroy]

STO 2 $650 Friday puts for $6. Watching my Friday $695 calls closely. I could roll now to next week and up to $720 for a slight credit, but I'll wait until Thursday to see how things are going. I'm not expecting us to break $700 this week (I hope I'm wrong though)

 

[ReddyLeaf]

premarket release would be genius because I see a selloff coming friday afternoon heading into 3 day weekend. Still sticking with my price target of 721 at close. I'm not betting on retail investors. I'm investing in hedgies riding a wave they create with their price targets. Treasury rates being this low could create a swell if it holds tomorrow. Wouldn't that be sweet.

Looking at max pain right now, it sure seems $680-685 is the target. That said, I did buy a couple +c720s at today’s MMD. Hoping for a quick bump. Also, I set up a GTC sell at $24.20 for some-cc705s just in case we bump up against the 700 call wall again.

edit: I also bought a 2x +c1100 Jan2023 LEAP because my Roth account got converted to cash after last week’s assignment. So now I’m mostly short cash-secured puts, 2x LEAPS, and just a few shares. I will eventually get back to 90% shares, but probably not this week.

 

[adiggs]

Yeah, there's something not quite right in my case with cc665's and ccp695's

One thing for sure, one of these will need to be rolled!

This is how you get into an inverted strangle. The series of choices that got you here. From what I've seen it tends to arise from riding close to the share price on both sides, and then you get a couple of whips back and forth. Selling the ccp695 just as the shares drop from 700 to 650 and then selling the cc665s followed quickly by the shares shooting up.

If you can get a finish somewhere inside of that range and the better centered as possible then both legs will have both good roll possibilities. But if the shares then take off for 750 the ccp695s will be in great shape and the cc665s won't be.


Then expand that to a big enough share price move in a short enough time period and there you are. And then you swirl in a dash of not taking assignment or the loss early enough (my problem). That's one discipline that I need to get better at.

 

[Criscmt]

My price prediction this week is 721.

May I know the lowest it could go to per your powers?
I am looking for the right strike to go with on my Bull Put Spreads

 

[juanmedina]

I sold 7x $740s yesterday for $4.25 maybe I close them today or roll them. I end up rolling my 5x 690cc to 710cc for next week when they went ITM yesterday as of right now I am regretting that move lol.

I am really thinking about doing this:

https://twitter.com/x/status/1409724888248590357

Sell some $1000 June 23 naked puts for 45K. I don't use much of my margin and when I do I just sell some credit spread under 20k total max lost. Doing a trade like that once and not having to watch it sound kind of nice and if I have to buy the shares in 2 year + at $550 doesn't sound bad. What do you guys think? There is probably more profitably things I can do with my margin but I like some lazy trading money now days.

They talk about it here:

 

[adiggs]

I sold 7x $740s yesterday for $4.25 maybe I close them today or roll them. I end up rolling my 5x 690cc to 710cc for next week when they went ITM yesterday as of right now I am regretting that move lol.

I am really thinking about doing this:

https://twitter.com/x/status/1409724888248590357

Sell some $1000 June 23 naked puts for 45K. I don't use much of my margin and when I do I just sell some credit spread under 20k total max lost. Doing a trade like that once and not having to watch it sound kind of nice and if I have to buy the shares in 2 year + at $550 doesn't sound bad. What do you guys think? There is probably more profitably things I can do with my margin but I like some lazy trading money now days.

The early roll - its easy to look back and regret the early rolls. The question I ask myself at times like that - if I'd know the shares were coming back at that point in time, clearly I wouldn't have rolled. But I didn't know and what if the shares were at $780 instead of $680? You'd be kicking yourself for not taking that early roll when the opportunity presented itself. (Ask me how I know). With that additional point of view, then the question becomes "what did you know then that could have led you to the opposite choice?" Was there anything? If not - then you made exactly the right decision


The long dated options sound conceptually great. The challenge is whether you'll be comfortable having so much capital / resources tied up for so long. You can lock in really nice results for a year or 2 to come with no further effort needed. And you can bring in a lot of cash now for spending on stuff.

But you'll also need to watch those options move slowly for a year or more (movements pretty much in sync with the shares). If a better trade you like more comes along between now and then you'll get to watch it go by.

I've sold an ITM long dated put previously - the Sept '21 when it was late Aug '20. It was a 600 strike when the shares were around $400ish and it worked out well. I was able to close it in January for a high % profit (2/3rds?). And I had a lot of cash reserved to support that position for a long while. I wasn't a fan of teh dynamic


I've also got some Sept '22 840 calls I sold. I like having the big lump of cash that I got from opening the position. I don't like the dynamic where that position is effectively frozen for 2 years.

 

[Drezil]

Today i tried to capitalize on the MMD (as it was canceled yesterday -.-). Had a feeling for a "Turnaround Tuesday" anyway

Bought 50x $800 weekly Puts and flipped it within minutes of the dip for ~6k profit. My Portfolio-Delta is currently ~4-6k at the price-levels of 650-700 - so this effectively offsets any movement in my portfolio (besides book-losses on everything but this position & vice-versa - depending on the price).
I call this "anchor-throwing" If i think the MMD is over i close this for profit & then take the same profit again (against my book-losses on the other positions)
This way i just have to watch that one position & not care about everthing else going on in my Portfolio. Speed is key here.


Yesterday before close i closed my 10x $650 weekly calls & reopened it today. Swing traded it back & forth 3 or 4 times (even afk. Thank you stop-loss/profit-taker-orders ). Mainly bought around 33, sold around 37-39. At the end of the day ~6.8k in the bank. Position closed again in preperation for tommorows dip (or not .. depending if it happens).

All in all "just" down 7% today instead of 10% (atm i am heavity leveraged with around a 1:10 lever to the upside & limited downside risk). OTOH i was up ~18% yesterday

Can i already call myself a degenerate for this kind of trading?
(i mean .. only 39% up this month .. because i had some *suger*-ups at the beginning tanking my portfolio by 44% & needed time to recover.. but we do not talk about that .. )

 

[ZeApelido]

Can i already call myself a degenerate for this kind of trading?

Absolutely.

 

[buttershrimp]

May I know the lowest it could go to per your powers?
I am looking for the right strike to go with on my Bull Put Spreads

668, but that would have been today. Tomorrow is day of truth.

 

[buttershrimp]

L

Absolutely.

I make the most annoying mistakes on low volume days…. Getting better at it, but the turning off the ticker is hard. Does anyone have volume thresholds they use? Momentum? They need a stupid oscillator… whenever the stupid oscillator is above 5, it means I’m trading on low volume day out of boredom.

 

[adiggs]

668, but that would have been today. Tomorrow is day of truth.

I'm liking 630 puts and 750 calls for this week. I don't like to commit too strongly

 

[MrMoo]

I sold 7x $740s yesterday for $4.25 maybe I close them today or roll them. I end up rolling my 5x 690cc to 710cc for next week when they went ITM yesterday as of right now I am regretting that move lol.

I am really thinking about doing this:

https://twitter.com/x/status/1409724888248590357

Sell some $1000 June 23 naked puts for 45K. I don't use much of my margin and when I do I just sell some credit spread under 20k total max lost. Doing a trade like that once and not having to watch it sound kind of nice and if I have to buy the shares in 2 year + at $550 doesn't sound bad. What do you guys think? There is probably more profitably things I can do with my margin but I like some lazy trading money now days.

They talk about it here:

I did something similar. I sold 2 x 600 June 23 puts in one of my accounts. They are naked but IB sort of limits how many I can sell based on the full value of the portfolio. I got about 23k for them and bought shares with the cash. Also selling some FAR FAR OTM calls on the shares in that account. TSLA 1000's and such. That account I sort of just leave and check on monthly. I have another account i trade more actively on.

 

[InTheShadows]

I'm trying to work out how this scenario could arise...?

For tracking my options I'm making a spreadsheet - the hardest part is that when riding multiple contracts in a single buy/call, they often get exercised a slightly different prices leading to a multiple lines for the same trade in the exported Excel, which makes doing a simple lookup impossible without tidying up the data first

Plus I don't have Excel at home anymore, I'm doing it with Apple Numbers, which is similar enough to Excel, yet different at the same time to make it a slow and painful experience

I switched to Google sheets years ago and haven’t looked back. Google apps scripting (GAS) is very powerful and easy to learn as well. My sheet is connected to TOS as well and gets me live pricing data and also let’s me know emergen targets are hit so I can look closer at charts and see if I want to change positions now or ride them out.

for closing in stages, I copy my original trade and paste it and change the qty to the number I closed and reduce the original by the qty closed. So I get the data for the closed position and everything still calculates for the remaining open position.

 

[Tslynk67]

I switched to Google sheets years ago and haven’t looked back. Google apps scripting (GAS) is very powerful and easy to learn as well. My sheet is connected to TOS as well and gets me live pricing data and also let’s me know emergen targets are hit so I can look closer at charts and see if I want to change positions now or ride them out.

for closing in stages, I copy my original trade and paste it and change the qty to the number I closed and reduce the original by the qty closed. So I get the data for the closed position and everything still calculates for the remaining open position.

Yeah, I'm doing the same to match up the buy/sell when split into multiple trades

As for Goole, well I'm balls-deep in the Apple eco-system for years now, so will persevere with Numbers - forced to use Excel at work, but hopefully that requirement will be over this time next year

 

[stealthyc]

I'm liking 630 puts and 750 calls for this week. I don't like to commit too strongly

I apparently agree as I sold some 622.5p and 750c earlier in the week. Would like to see it stay above 650 for some of my other puts though.

 

[InTheShadows]

Have a question for you. I have never been in this situation before. I have a run away covered call on EDIT, which I sold above my break even. I have been wanting the shares called away ever since they got assigned.

My question is the optimum time to close both the shares and the call when the delta is almost 100 for the call?

 

[dl003]

Have a question for you. I have never been in this situation before. I have a run away covered call on EDIT, which I sold above my break even. I have been wanting the shares called away ever since they got assigned.

My question is the optimum time to close both the shares and the call when the delta is almost 100 for the call?

Yes, pretty much. That should coincide with theta shrinking to nothing.

 

[Drezil]

Yes, pretty much. That should coincide with theta shrinking to nothing.

Little tangent to such calls: On IBKR with Portfolio-Margin (aka: every eu-account) shares have around 50% margin-impact with their value. Calls have more (like 90%), but at the moment $600-calls basically have a delta of one and no theta-decay - but cost only a fifth of the shares. Thus you get way more leaverage & the nearly the same behaviour (as long as we are > ~650) as shares.

I.e. my account has currently a delta of 5k shares - but if i would close everything & just buy TSLA i could only afford around 800 of them.

And those calls also allow you to go short ~100 shares each. I am allowed to sell 5-6k TSLA short & ride dips down that way. Not that this is recommended ... but you temporarily have 3.5m USD in your bank