Knightshade
Well-Known Member
I think it'd be around 1.9:1 as the best they can do without authorized more shares, since some amount of authorized shares need to be held for SBC.
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Wiki Selling TSLA Options - Be the House
- Thread starter adiggs
- Start date
I think it'd be around 1.9:1 as the best they can do without authorized more shares, since some amount of authorized shares need to be held for SBC.
Where is the split worry coming from? Did I miss something?
EDIT: I see others have commented...yeah, Elon tweets!
Yeah I doubt he'll be able to be so obvious this time around but if he tweets a photo of a stock chart smoking a blunt, I'll be immediately buying back some calls.
Of course you're correct, battery day! I guess it was delayed to that date due to Covid. On ir.tesla they still have the notice of "2020 annual meeting of stockholders to be held on July 7th 2020". My bad.
The tricky thing is whether TSLA is going to wait until after the shareholder meeting to announce a split, assuming a float size increase has to be approved first, to announce a split or if they're going to announce it first and then vote for both an float increase and a split on that date. Now, if a split is not going to happen, no harm no foul. If a split is going to happen, obviously the first route will be better for call sellers as we will have a cut off date to steer clear from if we so choose. The second route will result in complete chaos. Anyone wants to opine on how these things usually go?
Elon's tweets are probably misread far too often than not. However, TSLA's nominal value was in the 700s when he first hinted at a stock split back in May 2020. If its purpose was to help his employees exercise their stock options, that purpose is still pretty much valid today. We have the infrastructure bill, FSD wide release, and a monster second half of the year on the horizon. It's not too crazy to see another stock split to tie all these catalysts together.
Elon's tweets are probably misread far too often than not. However, TSLA's nominal value was in the 700s when he first hinted at a stock split back in May 2020. If its purpose was to help his employees exercise their stock options, that purpose is still pretty much valid today. We have the infrastructure bill, FSD wide release, and a monster second half of the year on the horizon. It's not too crazy to see another stock split to tie all these catalysts together.
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Buckminster
Well-Known Member
Are you sitting down?
I got a margin call soon after the bell
The
closed all my condors plus LEAPs.
This was 30% of my portfolio and will cost me a lot of capital gains as I would have exercised half.
After swearing (I rarely swear), I decided I was going to call them and get them to put the LEAPs back as they were. They sold the lot when one would have been more than adequate. Their customer service is not great so I soon decided against that.
I'm an idiot for not knowing this stuff. My beginners luck had ended - I had moved way too fast.
Within 5 mins my "can do" attitude kicked in (from decades of work related "challenges...").
I bought the same number of LEAPs but at 900 strike. Leaves me with a good chunk of cash.
Benefits:
I got a margin call soon after the bell
The
closed all my condors plus LEAPs.This was 30% of my portfolio and will cost me a lot of capital gains as I would have exercised half.
After swearing (I rarely swear), I decided I was going to call them and get them to put the LEAPs back as they were. They sold the lot when one would have been more than adequate. Their customer service is not great so I soon decided against that.
I'm an idiot for not knowing this stuff. My beginners luck had ended - I had moved way too fast.
Within 5 mins my "can do" attitude kicked in (from decades of work related "challenges...").
I bought the same number of LEAPs but at 900 strike. Leaves me with a good chunk of cash.
Benefits:
- I am leveraged through much higher strike long dated 2023 LEAPs - ready for the next inevitable climb
- I can move money to another trading account to spread the risk
- I can buy in more tax efficient accounts as reminded by @UkNorthampton in another thread
- I can now sell puts against the cash without fear of a margin call
- I can diversify a bit more - closer to 80% TSLA
- I can tell my grandkids - what an adventure - do they sell "I got margin called" T-shirts?
I am reading it as situation with covered calls against LEAPS.
Long calls exercised, to meet short calls, or were the long calls sold for the then iption price?
Buckminster
Well-Known Member
Iron condors made up of long and short calls and puts.
The calls (LEAPs) were sold. I would be happier if they had been exercised.
UkNorthampton
TSLA - 12+ startups in 1
Sorry if asked before, but even so Brexit plus recent EU financial changes might have changed things. Very little (nothing useful) in UK investment forums I'm aware of, LEAPS broker questions usually get shot down & not answered
Any recommendations for Brokers for LEAPS accessible by UK tax residents?
IG only seem to do binary
Interactive Brokers - I'm waiting for chat room to open (previously I think I phoned up went from country to country & answer was no)
Saxo - not sure they do LEAPS, mention CFD on website - one TMC member looking to switch away from Saxo
Any others?
Any recommendations for Brokers for LEAPS accessible by UK tax residents?
IG only seem to do binary
Interactive Brokers - I'm waiting for chat room to open (previously I think I phoned up went from country to country & answer was no)
Saxo - not sure they do LEAPS, mention CFD on website - one TMC member looking to switch away from Saxo
Any others?
jeewee3000
Active Member
Not UK specific - apologies - but I'm on "Binck Bank" in Belgium which has been bought by Saxo Bank recently. My broker software will switch to Saxo Bank soon, or so they tell me.
Currently I can buy and sell LEAPS. Wasn't aware that Saxo wouldn't allow me to. So I'm guessing Saxo will allow this.
Big grain of salt though: I think what derivatives / financial instruments you can access is country dependent, based on national law.
For example: I cannot buy the ETFs by Ark Invest (I can see them on my broker though, but not allowed to buy or sell). I asked around and it's because Ark's accounting practices/duties are less strict than the EU accounting requirements for ETFs. Shame.
No. It is because they do not provide the sheet of paper with all risks in standardized format.
That 3 pages cost a 4-figure-amount every time you change it.
If you do much trading (>4 trades 20k each for >4 quarters) and have >500k in your portfolio you can query for MIFID-II-exemption. I did it with IBKR & now i can trade freely.
You can also close any ARK-positions. You can't open them directly. BUT you can buy calls & exercise them early to get the shares. Thats what i did before MIFID-II went through.
Details on the procedure is in the legislation: Consolidated TEXT: 32014L0065 — EN — 01.07.2016
(Or if you arent a native speaker: EUR-Lex - 02014L0065-20160701 - EN - EUR-Lex - here you can select all glorious 20 languages ..
)And remember! It is only to protect you from gains! Feel free to play with options without limits, but buy the underlying? YOU NEED TO BE PROTECTED!!
Sold CC's on my shares at a conservative 8/6 $810 strike for a $1.30 premium as the stock push 5% yesterday. Premium down to $0.45 now.
On the other side my puts are doing well, the Sept $590's are up 82%.
On the other side my puts are doing well, the Sept $590's are up 82%.
Could always close them early today and resell for more premium!
The IC price you quoted previously looked a bit odd:
Without the bought calls and puts either side, this is basically a short strangle that's almost a short straddle. This has an extremely high margin requirement (and premium) and would probably have caused your margin call. If it was actually an Iron Condor, something like 680P+/697.5P- 700C-/720C+ then this would also have a high premium but very low initial margin requirement as it has a low profit probability. Basically the gap between the short put and call is your main profit window and so needs to be wider than the expected stock price range. For a -P697.5, -C700 range you only have a very narrow range or around $2.5 between each option to achieve max profit. With the share price going well outside this range you would quickly have an escalating margin requirement resulting in the margin call and liquidation of your positions. Can you clarify what actual option you sold?
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Buckminster
Well-Known Member
Thanks - yes I had my doubts. They were close - slightly further apart:
670P+/697.5P- 700C-/730C+
Thanks for clarifying. Next time keeping the middle part of the spread wider than the expected share price range should keep you in a safer position. I generally sell my IC's a bit closer to the Friday and use the max pain chart call/put walls and technical support levels to set my IC ranges. For example for this week, today I sold 50 x 655/680 755/780 IC's. These get around $4.25 each ($21,250 total premium) and use up around $130k in maintenance margin. Since selling them just after open they are up around 18% so far.
Another friendly Tuesday. Just closed the last of my CCs. Not that I was terribly worried about it hitting 790 but couldn't resist taking the 85% profit and hopefully being able to sell them all again later in the week.
With the Tuesday morning breather / slight pause, I closed out the CC from yesterday for 2/3rds net profit (about $4.50 p/l since yesterday). I'll be looking for a share price spike to reopen the CCs. It's early enough in the trading day that I won't be surprised if that's later today, but mostly thinking tomorrow (or sometime later in the week with a share price increase).
And if I'm closing CCs, then its probably a good time to open put spreads! I've piled myself hip deep in 550/650 put spreads for about a $4 premium. These are Aug 13 expiration. The 650 strike is around my target delta for these of ~0.15. That delta has been creeping up the last month as these have been working, but I think its unlikely to go up much from here. Whenever I think of being more aggressive with these I ask myself if that is consistent with an income strategy ("this is for income") -- that almost stops me from doing what I was about to do
And if I'm closing CCs, then its probably a good time to open put spreads! I've piled myself hip deep in 550/650 put spreads for about a $4 premium. These are Aug 13 expiration. The 650 strike is around my target delta for these of ~0.15. That delta has been creeping up the last month as these have been working, but I think its unlikely to go up much from here. Whenever I think of being more aggressive with these I ask myself if that is consistent with an income strategy ("this is for income") -- that almost stops me from doing what I was about to do
NOT-ADVICE
But some comments / observations. I got burned pretty badly with a 'tight' call spread ($20 - that'd be a 700/720 using your situation) recently. Burned pretty badly = 40-70% losses on the position and it wasn't trivially sized. The problem as I see it now is that the distance from max gain (shares under 700 in the 700/720 call spread) to max loss (shares over 720 in that same example spread) is so short. TSLA can easily move $20 in a day, or even a few hours.
I also now think of the spread size as the amount of leverage I'm putting into a position, with smaller spread sizes equating to higher levels of leverage.
With that consequence I've been doing $100 spread sizes ever since. I also went WAY more conservative with the short strikes. I started down around .10 delta, but I've been creeping up slowly. I'm up around .15 delta now and am unlikely to creep up any higher. At this level and with the $100 spread size I get to the 550/650 put spread (just opened today) and earn a large enough credit (just under $4 for this one) that I'm earning enough, that I don't need to take on more risk.
I want to keep the scale of the leverage under control. I also want something that behaves a lot more like a cash secured put (which I have a lot of experience with), and I want an approach that keeps the greed emotion under control -- the very large spread sizes stops me from opening as many positions
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