Wiki Selling TSLA Options - Be the House

[stealthyc]

Small move up today plus 1/3rd of the trading time remaining going away = 80% profits on these BPS.

Close 'em out, leaving me with nothing open. Watching today for a next-week open, with a heavy bias towards opening something tomorrow at the latest. I expect the credit to be higher or the strike more distant with a Friday open over a Monday open.


I'm also staying away from call spreads (and thus ICs). When I have done these I'm so far OTM I collected like .45 and closed at .20, and I had more mental energy wrapped up in these than everything else. I think I'm being excessively gun shy after a bad experience with a smaller spread size back in June.

Something like how I got about CSP earlier in the year as well. Thus my two primary trade strategies continue to be BPS with wide spreads and lcc.

I will likely close my ICs today near market close for about 93% profit. I've got mixed feelings about closing early in general. If there was a big movement early maybe, but on a day like today (and with the stock price near the center of my condor) there is no real benefit to me closing. I'm not interested in opening a new position today because with the stock having so many up days and being at a relatively high RSI I expect some red soon. Also next week has the potential to seek a slightly lower price. I'll re-evaluate tomorrow. If we get a down day I'll probably open BPS then.

I also dislike call spreads. I legged into one this week and it worked out quite well, but they make me much more nervous than puts.

 

[adiggs]

I will likely close my ICs today near market close for about 93% profit. I've got mixed feelings about closing early in general. If there was a big movement early maybe, but on a day like today (and with the stock price near the center of my condor) there is no real benefit to me closing. I'm not interested in opening a new position today because with the stock having so many up days and being at a relatively high RSI I expect some red soon. Also next week has the potential to seek a slightly lower price. I'll re-evaluate tomorrow. If we get a down day I'll probably open BPS then.

I also dislike call spreads. I legged into one this week and it worked out quite well, but they make me much more nervous than puts.

In the past (like say before August this year ) I was much more of a wait for the profit to build further sort of trader. Which has certainly worked well for me.

This last month and a bit, I've shifted to this take-the-profits mindset, and as a result not stay invested in the market as much. I'd say that instead of nearly full time in the market with both puts and calls as I have been for most of my history, I've been closer to 40-60% in the market, where that mostly means either lcc's or BPS are open but not both, and occasionally neither. It's really clear from my monthly profit tracker that this is WAY better for me - on the order of 2x previous results.


I think the 2x improvement comes from these primary factors.

1) The first is that I have better entry prices. I sell calls on an up day, and sell puts on a down day (selling into strength). These yield better credits and/or better strikes than I previously received, which looked more like sell calls or puts into weakness.

And I've had some days (like yesterday) where I close puts while up in the morning, open new puts later in the day when the shares are down, and then close that second batch of puts today. The close yesterday was around 60% and today was 80%. Given constant position size and credits I got 140% instead of waiting for 60% to turn into 90% over the same time.

2) The second is that by taking profits early I'm getting 2 or 3 in/outs in a week, instead of 1.

3) I guess the third is that the win % is also going up - the need for an individual position to go into rolls for time / position management drops a lot as well.

4) Part of success here is a bit more technical analysis than I've done historically as well. A lot of it is reading what others here are thinking, the Technical Analysis thread, and looking at put/call walls, option activity, and some actual charting of my own (in approximately that volume of effort). All of it together still isn't much, but more than previously for me.


NOT-ADVICE for sure. I'm still new enough to this trading approach that I'm still working out details for myself.

 

[adiggs]

I also dislike call spreads. I legged into one this week and it worked out quite well, but they make me much more nervous than puts.

This is part of why I try out new things. I want to know how they profit, and how profitable they are. I also want to learn how I react emotionally to them - it needs to be something I can readily imagine doing for years to come; these are an example of something I anticipate doing now and then (rarely), but not often.

Maybe the most likely is as a rescue mechanism for covered calls that get too deep (I'd have to think more on that before I actually did it though).

 

[InTheShadows]

Well the 805 covered calls I sold for next week got day traded today. Put in a buy order at 27% after I opened them. Hope we have a run up into close so I can resell them.

 

[MP3Mike]

This last month and a bit, I've shifted to this take-the-profits mindset, and as a result not stay invested in the market as much. I'd say that instead of nearly full time in the market with both puts and calls as I have been for most of my history, I've been closer to 40-60% in the market, where that mostly means either lcc's or BPS are open but not both, and occasionally neither. It's really clear from my monthly profit tracker that this is WAY better for me - on the order of 2x previous results.

Very much this! My "fear" was the trading fees, and getting them lowered freed me to move in and out of positions during the week instead of trying to milk one position for all it was worth. In reality even with the old, higher, fees, I would have made more going in and out.

Of course it requires more of my time, so if I want to keep doing it as much as I have the last couple weeks I would need to either retire or get my day job hours shifted...

 

[InTheShadows]

Very much this! My "fear" was the trading fees, and getting them lowered freed me to move in and out of positions during the week instead of trying to milk one position for all it was worth. In reality even with the old, higher, fees, I would have made more going in and out.

Of course it requires more of my time, so if I want to keep doing it as much as I have the last couple weeks I would need to either retire or get my day job hours shifted...

Another approach I took to help with the fees too is to go with the wider spreads. Like 150 & 100 instead of the $50 ones I was doing. I also asked my platforms customer service yesterday for lower fees.

 

[stealthyc]

In the past (like say before August this year ) I was much more of a wait for the profit to build further sort of trader. Which has certainly worked well for me.

This last month and a bit, I've shifted to this take-the-profits mindset, and as a result not stay invested in the market as much. I'd say that instead of nearly full time in the market with both puts and calls as I have been for most of my history, I've been closer to 40-60% in the market, where that mostly means either lcc's or BPS are open but not both, and occasionally neither. It's really clear from my monthly profit tracker that this is WAY better for me - on the order of 2x previous results.


I think the 2x improvement comes from these primary factors.

1) The first is that I have better entry prices. I sell calls on an up day, and sell puts on a down day (selling into strength). These yield better credits and/or better strikes than I previously received, which looked more like sell calls or puts into weakness.

And I've had some days (like yesterday) where I close puts while up in the morning, open new puts later in the day when the shares are down, and then close that second batch of puts today. The close yesterday was around 60% and today was 80%. Given constant position size and credits I got 140% instead of waiting for 60% to turn into 90% over the same time.

2) The second is that by taking profits early I'm getting 2 or 3 in/outs in a week, instead of 1.

3) I guess the third is that the win % is also going up - the need for an individual position to go into rolls for time / position management drops a lot as well.

4) Part of success here is a bit more technical analysis than I've done historically as well. A lot of it is reading what others here are thinking, the Technical Analysis thread, and looking at put/call walls, option activity, and some actual charting of my own (in approximately that volume of effort). All of it together still isn't much, but more than previously for me.


NOT-ADVICE for sure. I'm still new enough to this trading approach that I'm still working out details for myself.

I value your experience, and I will likely play around with it a bit as well to see how it works for me.

 

[InTheShadows]

Wow, was that a failed MM attack to drive the price down at 2:05?

 

[stealthyc]

This is part of why I try out new things. I want to know how they profit, and how profitable they are. I also want to learn how I react emotionally to them - it needs to be something I can readily imagine doing for years to come; these are an example of something I anticipate doing now and then (rarely), but not often.

Maybe the most likely is as a rescue mechanism for covered calls that get too deep (I'd have to think more on that before I actually did it though).

I agree, I've been trying all sorts of things for the same reason, perhaps a bit too enthusiastically at times, but it's hard to gauge how you really feel about things unless there is real money at stake. The main problem I have with selling calls is that I'm so bullish on tesla overall that I expect a sustained rise to go very hard against me at some point. My friend experienced this last year and it's not been pretty to watch.

 

[Tslynk67]

In the past (like say before August this year ) I was much more of a wait for the profit to build further sort of trader. Which has certainly worked well for me.

This last month and a bit, I've shifted to this take-the-profits mindset, and as a result not stay invested in the market as much. I'd say that instead of nearly full time in the market with both puts and calls as I have been for most of my history, I've been closer to 40-60% in the market, where that mostly means either lcc's or BPS are open but not both, and occasionally neither. It's really clear from my monthly profit tracker that this is WAY better for me - on the order of 2x previous results.


I think the 2x improvement comes from these primary factors.

1) The first is that I have better entry prices. I sell calls on an up day, and sell puts on a down day (selling into strength). These yield better credits and/or better strikes than I previously received, which looked more like sell calls or puts into weakness.

And I've had some days (like yesterday) where I close puts while up in the morning, open new puts later in the day when the shares are down, and then close that second batch of puts today. The close yesterday was around 60% and today was 80%. Given constant position size and credits I got 140% instead of waiting for 60% to turn into 90% over the same time.

2) The second is that by taking profits early I'm getting 2 or 3 in/outs in a week, instead of 1.

3) I guess the third is that the win % is also going up - the need for an individual position to go into rolls for time / position management drops a lot as well.

4) Part of success here is a bit more technical analysis than I've done historically as well. A lot of it is reading what others here are thinking, the Technical Analysis thread, and looking at put/call walls, option activity, and some actual charting of my own (in approximately that volume of effort). All of it together still isn't much, but more than previously for me.


NOT-ADVICE for sure. I'm still new enough to this trading approach that I'm still working out details for myself.

The other advantage to this is that you're releasing cash earlier and continually reducing risk

 

[corduroy]

Did IV just jump?

 

[blckdmp]

Did IV just jump?

My sold puts (725p) for next week started skyrocketing at 2 o clock. Something's up! ?

 

[Yoona]

Did IV just jump?

 

[blckdmp]

View attachment 707169

Cool. does anyone know if an IV chart like that exists for IBRK? Their volatility viewer seems more long term than this.

 

[vwman111]

It seems like most people have closed out of their positions for the week. Are you waiting until Monday to see where we are at? expecting an unusual move higher?

 

[ChefBoyardee]

Btw if anyone is looking for earnings trades, ZS reports earnings today and IV is over 100. I have a small iron condor on right now to play the IV contraction

 

[CHGolferJim]

It seems like most people have closed out of their positions for the week. Are you waiting until Monday to see where we are at? expecting an unusual move higher?

I still have 091721C765 CC that seem likely to remain OTM, and am considering buying ATM calls Friday 9/10 ATM for sale during Monday AM spike. This returned 2x-3x over Sept. 3rd/7th.

 

[bkp_duke]

Closed out my IC for 88% this afternoon. That was too juicy to pass up. Great money considering the positions were just opened on Tuesday.

 

[adiggs]

Very much this! My "fear" was the trading fees, and getting them lowered freed me to move in and out of positions during the week instead of trying to milk one position for all it was worth. In reality even with the old, higher, fees, I would have made more going in and out.

Of course it requires more of my time, so if I want to keep doing it as much as I have the last couple weeks I would need to either retire or get my day job hours shifted...

Yeah - I've been munching through the fees. Paying what amounts to .026 (2.6 cents - 1.3 cents in, 1.3 cents out) per contract vs. the premium I'm receiving measured usually in dollars, but at least in dimes, hasn't been a problem. Though it IS something I'd like to pay even less of. I've sold some BPS in the 60 contract range - 2.3 cents per BPS in, and 2.3 cents per BPS out - that adds up to some really good sushi money, fast.

Not something to optimize for, but if I can also improve the platform and the trading tools / info at the same time as I lower the fees (down to 2 penny in, 0 pennies out, and no more than 20 pennies for a single position; yeah that sounds like a nice upgrade).


All amounts in contract premium $ for easiest comparison to the credits we're earning.

EDIT: argh - math. It's 2/3rds cent (.65) per contract. For 100 contracts that's where the 2/3rds comes from. So 1 BPS is 2 contracts, and thus 1.3 cents (.065*2) in per spread premium, in and out.

So the BPS example above got multiplied by 2, 1 time too many. 1.3 cents per share (or option premium) for a spread being opened, and 1.3 cents for a spread out. 60 contracts and 2.6 cents total contract premium is 60*100 (shares) * 2.6 cents = $156 for the round trip.

 

[LN1_Casey]

My 710c for last week was called away, as expected. I now have sold a 1Oct 670p for $6.9 just to make something. My margin isn't enough still to buy higher with my long term PUT out there, and at least the 1Oct pays decently. I may close this 1Oct put next week depending on stock movement, but I don't expect it to go that low, not when 3rd quarter numbers just around the corner that Friday.