What's the effect on SP when everyone sells/closes their OTM (red) calls at open for a loss, likewise those cashing in their ITM (green) bought puts for gains? I forgot the correlation effects.
-
Want to remove ads? Register an account and login to see fewer ads, and become a Supporting Member to remove almost all ads.
Wiki Selling TSLA Options - Be the House
- Thread starter adiggs
- Start date
Personally I would wait a week before taking action, but you do need to be working it down.
Technically speaking When you sell puts dealers have to buy stock and when you sell calls dealers have to sell stock. That's how I understand delta hedging anyway. I doubt even our collective volume will require dealers to do any kind of hedging. I will be watching institutional flow at the open. Remember there were not a lot of short term bets to downside or the upside.
Well I have a bit the same with my Sep -p270's, will all depend on the IV I guess, which won't reset until open
As mine are written against +p270's, then the easy way outs to sell both, but the lower the price goes, the worse the profit form the +p's, and I was looking to keep those all the way to expiry in 2026, so that would be the last resort
So rolling them out 3 month is the next step, another way to increase the extrinsic is to roll down, so then add some calls to make a straddle and reposition at 260 strike, or something like that
Probably roll out and reduce the strike is safest...
All things considered not that bad:
$TSLA: KGI Securities Downgrades to Neutral from Outperform, PT $213 (from $309)
$TSLA: Goldman Sachs Cuts price target to $220 from $255
$TSLA: Barclays Cuts price target to $225 from $250
$TSLA: RBC Capital Cuts price target to $297 from $300
$TSLA: Mizuho Securities Cuts price target to $270 from $310
$TSLA: UBS Cuts price target to $225 from $229
$TSLA: Wells Fargo Cuts price target to $200 from $223
$TSLA: Citi Cuts price target to $224 from $255
(Source: DeltaOne)
$TSLA: KGI Securities Downgrades to Neutral from Outperform, PT $213 (from $309)
$TSLA: Goldman Sachs Cuts price target to $220 from $255
$TSLA: Barclays Cuts price target to $225 from $250
$TSLA: RBC Capital Cuts price target to $297 from $300
$TSLA: Mizuho Securities Cuts price target to $270 from $310
$TSLA: UBS Cuts price target to $225 from $229
$TSLA: Wells Fargo Cuts price target to $200 from $223
$TSLA: Citi Cuts price target to $224 from $255
(Source: DeltaOne)
Tough to know for sure before the chain is out.... my 5x -p210/+p170 for THIS Friday, I am sure these are toast. Same will be the twice as large block of same width spread rolled to 2/23. Rolling again will just make this problem grow. I have premium that I received for two of the three rolls that I can give back and cash to add for a buy out, unless there's a flip roll or similar that I should strongly consider at this point. Instead of buying shares, I'm stuck letting the cash go. Thoughts? TIA !
Thanks.
Re adding some calls for straddle, what do you have in mind?
Re roll out and reduce strike (Yoona's data also shows rolls work great for ITM puts) seems -P280 1/25/25 (-$3.75 debit; $6k) can make sense to buy extrinsic value, would you agree?
Last edited:
jeewee3000
Active Member
Just rewatched the Options Alpha course on adjusting straddles and strangles (link).
Interestingly enough they advise against improving the strike price of your losing sold option. Example you are holding -$210p/-$210c for 1/26 expiration.
Stock moves to ~$190.
Say we don't want the options to excercise, for the sake of the example.
Many here (including me) would at first glance say:
1) my -210c is fine so I can let it expire or buy it back at 0.01 (shoutout to @adiggs 's options hygiene posts back in the day)
2) I roll my -210p out some weeks, to a lower strike, for a credit. Example 2 week roll, $5 lower (if possible, probably not at that short of a timeframe).
3) I sell a -210c for the same expiration date as the one I rolled to (see step 2).
Options Alpha has a different idea of this situation. They say:
1) Do NOT lower your strike of the -210p. Just roll it out a month (they work in 30 day increments a lot) for a credit.
2) Bring your winning side (in this case the call side) closer to the SP. In this case you would go "inverted" and sell a -200c for that expiration, netting you greater credit. Remember that their end goal is merely profit, not owning x amount of shares or something like that. And they are SP agnostic.
3) depending on where the SP is closer to expiration (in our example a month out), you can check if the total credit received is enough to buy back both options. If not, rinse and repeat. Normally if the SP reverts somewhat (say to $205) you would be able to close out the position at a net profit.
4) if closing out is not possible and you want to keep going, you can. The tips Kirk gives are:
- Do NOT try to save the position by selling more options on the winning side (for example 2 calls for every rolled put instead of 1), this would mean you expose yourself to more risk and you do not want that. (Healthy risk management tip)
- Don't overdo the inverted aspect of this technique. Don't sell an ATM call for example, which in this example would bring you to -190c/-210p. In the case of a slight rebound (to $200 or $205) you would most likely end up at a loss. In other words, when going inverted stay 15% OTM (that's their usual distance, would not even apply here since 190+15% = $218). But in the case of Tesla you could maybe do 10% OTM call (in this example -210c basically, so not inverted, but I just wanted to explain the philosophy).
Just some food for thought. Selling a -200c against a rolled ITM put could be profitable, and worst case you manage the cc again. (I just realised that, if I mean rolling it out and up, that is what Options Alpha advises against. But then again they buy back all trades, not keep managing till expiration. Big difference in strategy/approach).
I might try this with one or two straddles just to see what happens.
Interestingly enough they advise against improving the strike price of your losing sold option. Example you are holding -$210p/-$210c for 1/26 expiration.
Stock moves to ~$190.
Say we don't want the options to excercise, for the sake of the example.
Many here (including me) would at first glance say:
1) my -210c is fine so I can let it expire or buy it back at 0.01 (shoutout to @adiggs 's options hygiene posts back in the day)
2) I roll my -210p out some weeks, to a lower strike, for a credit. Example 2 week roll, $5 lower (if possible, probably not at that short of a timeframe).
3) I sell a -210c for the same expiration date as the one I rolled to (see step 2).
Options Alpha has a different idea of this situation. They say:
1) Do NOT lower your strike of the -210p. Just roll it out a month (they work in 30 day increments a lot) for a credit.
2) Bring your winning side (in this case the call side) closer to the SP. In this case you would go "inverted" and sell a -200c for that expiration, netting you greater credit. Remember that their end goal is merely profit, not owning x amount of shares or something like that. And they are SP agnostic.
3) depending on where the SP is closer to expiration (in our example a month out), you can check if the total credit received is enough to buy back both options. If not, rinse and repeat. Normally if the SP reverts somewhat (say to $205) you would be able to close out the position at a net profit.
4) if closing out is not possible and you want to keep going, you can. The tips Kirk gives are:
- Do NOT try to save the position by selling more options on the winning side (for example 2 calls for every rolled put instead of 1), this would mean you expose yourself to more risk and you do not want that. (Healthy risk management tip)
- Don't overdo the inverted aspect of this technique. Don't sell an ATM call for example, which in this example would bring you to -190c/-210p. In the case of a slight rebound (to $200 or $205) you would most likely end up at a loss. In other words, when going inverted stay 15% OTM (that's their usual distance, would not even apply here since 190+15% = $218). But in the case of Tesla you could maybe do 10% OTM call (in this example -210c basically, so not inverted, but I just wanted to explain the philosophy).
Just some food for thought. Selling a -200c against a rolled ITM put could be profitable, and worst case you manage the cc again. (I just realised that, if I mean rolling it out and up, that is what Options Alpha advises against. But then again they buy back all trades, not keep managing till expiration. Big difference in strategy/approach).
I might try this with one or two straddles just to see what happens.
SebastienBonny
Member
Did you take a look what happened 1/2/3 month(s) later?
I wouldn't panic right now if your -p is in trouble. Roll it a month and see what happens.
Of course, it's easy to say when it's fully backed by cash, assignment is not that bad in that case.
You can always sell the assigned shares and sell a new put further away, worst case.
Had some vertical PUTS for this week and just cashed secured PUTS for next week in 195-170 range.
Seems best options is to close the Long leg for this week and make some $, let this weeks short leg at 190 exercise.
Then try to manage next weeks PUTS by roll out.
CCs I will roll all to 360 range, not sure if I should directly buy June 26 Calls with proceeds, but that has been my game all along ...
even need to manage a NVDA shrt call spread was like 0.07 delta when sold, it keeps climbing up
Seems best options is to close the Long leg for this week and make some $, let this weeks short leg at 190 exercise.
Then try to manage next weeks PUTS by roll out.
CCs I will roll all to 360 range, not sure if I should directly buy June 26 Calls with proceeds, but that has been my game all along ...
even need to manage a NVDA shrt call spread was like 0.07 delta when sold, it keeps climbing up
I wish I could ask Ken Griffin where everybodys’ stop loss sell targets sit. Wouldn’t THAT be nice information to have in your quiver.
What strikes are you looking at for those 2026 LEAPs?Had some vertical PUTS for this week and just cashed secured PUTS for next week in 195-170 range.
Seems best options is to close the Long leg for this week and make some $, let this weeks short leg at 190 exercise.
Then try to manage next weeks PUTS by roll out.
CCs I will roll all to 360 range, not sure if I should directly buy June 26 Calls with proceeds, but that has been my game all along ...
even need to manage a NVDA shrt call spread was like 0.07 delta when sold, it keeps climbing up
A more fundamental question is what kind of SP movement in 2024 and 2025 are required for 2026 LEAPs to outperform, or even equal, common shares?
I'm sorry, but what the crap is that?
Are they averaging in the rebound from the $100 mega drop to draw some sort of result for all local 6 month lows? A 6 month low by definition has to have gains over some short terms periods (specifically at 6 months, potentially other time periods).
If it keeps dropping we aren't at the 6 month low...
Lawn grass off keep rabble rabble
Keep in SSR will kick in if TSLA hits -10% down limit.
Last edited:
I did... 4/5 are mostly flat with periods of down afterward ...
What's SSR? Some Serious Regrets?
SSR stands for Short Sale Rule or Short Sale Restriction. This restriction prevents traders from shorting at market (bid price) when the SSR is in effect. This is usually done to prevent a large number of short sellers from driving down the stock price of a company, which could cause panic in the market and destabilize the financial system.What's SSR? Some Serious Regrets?
:max_bytes(150000):strip_icc()/investing1-5bfc2b9046e0fb005119b292.jpg)
What Was the Short Sale Rule? Definition, History and Controversy
The short-sale rule was a Securities and Exchange Commission (SEC) trading regulation that restricted short sales of stock from being placed on a downtick in the market price of the shares.
Similar threads
