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Wiki Selling TSLA Options - Be the House

adiggs

Well-Known Member
Supporting Member
Sep 25, 2012
5,020
15,523
Portland, OR
I have a theory, based off of looking at max-pain for every week going out to 10/8.

This week I think that $700 call wall will disapear at some point. Guessing when SP drops close enough for whomever to take nice enough profits. When that happens it's game on for run to $750 to close the week.

Looking out further to 9/24 I'm being careful as it could run to $800 easily as there doesn't seem to be any calls impeding.

10/1 is a $800 small-ish call wall at 2.8k, but could disapear as well.

10/8 $800 call wall 4.9k.

The next few weeks look great for selling aggressive puts. I'm going to be very conservative with selling calls

Not advice.
NOT-ADVICE of course.

And EDIT: I pulled this apart from my previous post as they're too different, and WAY too big :D


An observation I have about max pain and the put/call walls. The monthly expirations, such as this week, , behave differently than other weeks in some ways, and the same way in others.

The different ways is that there is a LOT more $ on the line this week. When I looked at this when the shares were 750ish last week with max pain at $690, the MM were looking at $2.4B payout versus max pain payout around $1.6B ($800M difference is what I remember clearly - the other numbers are intentionally imprecise :D).

The 6/10 expiration had a fraction of that. 9/24 has a max pain of 735 right now, with $50 away from the strike (785 strike) representing $116M payout vs. the 735 payout of $73M. Right now, next week has $60M on the table. Max pain exerts a LOT more gravitational pull during monthly, and especially quarterly, expirations. And we see how strong of a pull the weeklies have when volume is low.

This is how the monthly and quarterlies are different - so VERY much more $ on the line.


They are more the same than not though, in that max pain has little influence the week before expiration. Especially the weeklies - any put / call walls that accumulate trivial in size to what builds during the week of expiration. For 9/24 expiration there is an unusually big put wall at the 700 strike with .. 16k contracts. I say unusual as I rarely see >10k the week before. The big call wall is at 800 strike and is .. 2.7k contracts.


So I say that to say two things. Monthly and more so quarterly expirations - bigger contract counts, bigger contract accumulation prior to the week of expiration, and thus bigger impact.

Be very cautious using the max pain / put wall / call wall / OI / etc.. information before the week of expiration. The numbers are trivial compared to what will happen the week of expiration (I personally ignore the info, and mostly still ignore it on Monday).
 

adiggs

Well-Known Member
Supporting Member
Sep 25, 2012
5,020
15,523
Portland, OR
i only grabbed the screenshot from
Hey Yoona - I haven't looked closely - is there a way to get Swaggy to only show the Friday expirations on that chart you screenshot for us earlier? Or maybe Thursday and Friday (I don't expect this latter feature).

I consider historical max pain information to be roughly useless. Or at least it's very hard to pull out the Friday expirations when max pain has the very largest impact. I can use the max pain information earlier in the week particularly well when I have insight to how well it'll work out, but I also consider the max pain during the week to have a pretty weak gravitational pull.

That's great stuff - I've added that site to my other max pain site to keep an eye on this stuff.


EDIT: Nevermind! I see - the expiration days get a circle on the historical max pain / stock price chart.
 
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adiggs

Well-Known Member
Supporting Member
Sep 25, 2012
5,020
15,523
Portland, OR
Hey Yoona - I haven't looked closely - is there a way to get Swaggy to only show the Friday expirations on that chart you screenshot for us earlier? Or maybe Thursday and Friday (I don't expect this latter feature).

I consider historical max pain information to be roughly useless. Or at least it's very hard to pull out the Friday expirations when max pain has the very largest impact. I can use the max pain information earlier in the week particularly well when I have insight to how well it'll work out, but I also consider the max pain during the week to have a pretty weak gravitational pull.

That's great stuff - I've added that site to my other max pain site to keep an eye on this stuff.
Never mind - I see what I'm looking for. The Friday expirations get a circle on the larger chart. That works for me!
 
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samppa

Member
Feb 17, 2019
478
2,243
My Island Cottage
I've been thinking more about Bull put spreads, which have been my major instrument for income generation now.. right now I have a bunch of -p700/+p650 open for this friday. Position was first opened last friday at the end of day dip, and today during morning dip I added some more.

I've been thinking about spread width, risk, leverage, strikes.
This is just an example to cite discussion, I'm looking at the option chain right now, tsla is about 730.
Lets see..
so
10x -p700/+p650 at $3,50 will give credit of $3500, and reserves 45k margin. Max loss is 42k, breakeven at 696.
on the other hand
5x -p720/+p620 at $7,20, nets credit $3315, reserves about the same, 46k margin. Breakeven is 713.

Which one do you consider riskier? What would you do?
 

InTheShadows

Active Member
Apr 20, 2013
2,326
1,787
USA
Anyone selling calls yet? I rolled about 1/3 of my put spreads to next week when they hit their atm short prices this am. 715’s and 720’s. I only did this with the ones that had a spread of <$50. I didn’t think I would have to do it but I did it to get accustomed to the mechanics of them. All 3 sets I sold for more credit than the original premium I had collected Wednesday when I first sold them. Their % losses (for that series since now it’s in trade management mode) also about halved when I rolled them. Will be watching them compared to the ones I didn’t roll throughout the week.

With no short calls and 1/3 put spreads rolled to next week I doubt I will hit my target this week.
 
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Cherry Wine

Supporting Member
Supporting Member
Oct 4, 2018
2,657
21,299
California
That is one helluva hammer on the daily chart right now - wow! My choice to sell puts expiring 9/17 on Thursday sure did age like milk, but I'm still confident they'll end up expiring worthless. I then compounded my poor decision by opening some bear call spreads this morning, but I at least left open the possibility of selling some covered calls into strength if we break $750.

My current positions:

STO 9/17 $730p @ ~$7.60
STO 9/17 $690p @ ~$7.00
STO 9/17 $760c/$810c @ $1.70
STO 9/17 $780c/$830c @ $1.05

I think the takeaway here is, don't follow my trades. I'm generally pretty good on collecting all of the sold premium, but my timing is terrible. ;-)
 

bkp_duke

Well-Known Member
May 15, 2016
5,594
19,731
San Diego, CA
Anyone selling calls yet? I rolled about 1/3 of my put spreads to next week when they hit their atm short prices this am. 715’s and 720’s. I only did this with the ones that had a spread of <$50. I didn’t think I would have to do it but I did it to get accustomed to the mechanics of them. All 3 sets I sold for more credit than the original premium I had collected Wednesday when I first sold them. Their % losses (for that series since now it’s in trade management mode) also about halved when I rolled them. Will be watching them compared to the ones I didn’t roll throughout the week.

With no short calls and 1/3 put spreads rolled to next week I doubt I will hit my target this week.

I'm eyeing them, but haven't started selling any. IV is still low on the calls for Friday. Would like to see more of an upward pop with better IV before opening those potision.
 

UltradoomY

Supporting Member
Supporting Member
Mar 13, 2020
351
1,676
Tampa, FL
Anyone grab a Jan 2024 $630 LEAP? I put a bid in this morning for $240, but that was too aggressive, the low was $250. $18k bid/ask spread, wow!
I had a bid in for 5 of the $630's for $250 each that never filled - cancelled just a few minutes ago - going to wait for the rest of the strikes to open up - would rather have the $500's
 

Discoducky

P100DL, 2021 M3, 4 CT reservations and counting
Supporting Member
Dec 25, 2011
3,795
7,351
My mountain
Be very cautious using the max pain / put wall / call wall / OI / etc.. information before the week of expiration.
I totally agree and am using the data relatively, weighting accordingly DTE, by taking screen shots the night before and comparing to recalculations. It is fascinating and I think very useful. Even multiple weeks out.

For instance, I think the $700 call wall might be gone currently or materially lower. I'm not STO any calls until I see it tomorrow morning.
 

phantasms

Mr Self Destruct
Supporting Member
Jan 30, 2019
1,767
10,133
Westchester, NY & White Mountains, NH
I totally agree and am using the data relatively, weighting accordingly DTE, by taking screen shots the night before and comparing to recalculations. It is fascinating and I think very useful. Even multiple weeks out.

For instance, I think the $700 call wall might be gone currently or materially lower. I'm not STO any calls until I see it tomorrow morning.
Yeah looks like that wall mostly evaporated and there's two spikes at 740 [duh] and 750 currently.

Screen Shot 2021-09-13 at 3.59.20 PM.png
 

Lycanthrope

S3XY old dude
Supporting Member
Nov 15, 2013
10,070
79,349
At home
Anyone grab a Jan 2024 $630 LEAP? I put a bid in this morning for $240, but that was too aggressive, the low was $250. $18k bid/ask spread, wow!
Will be looking for Jan 24 c600's when they appear, will need to sell some shares for that...

Haven't sold any shitcalls yet for this week, will leave it as late as possible, probably Wednesday, then skim off some $1 strikes - I'm very wary that this could pop without warning...

Today was really odd price action, never seen a day quite like it. Was a good exercise in nerves- a few $$ lower and I would have received a margin call
 

glhs272

Unnamed plug faced villian
Aug 21, 2013
911
580
Burlington, WI
I jumped back into the fray again this morning. Was hoping to sell a 755cc expire 9/17 during the early morning spike, figuring it would trail off. I was sorta right, but the trade didn't execute before the sell-off began. Held off for a while, waiting for a dead cat bounce or similar. It happened, but my call was worth less than I was hoping for. Committed the trade anyway. Was surprised the bullishness this afternoons trading, could have held out for better premiums.. oh well. So, now let's see how this week goes... clearly my timing is terrible, but I am still having fun.

If we run up this week, my long shares will greatly increase in value whatever gains I am losing out with the 1 options contract should it not expire worthless, but if it does, back for more covered call fun... Weee heads I win, tail I win.
 

stealthyc

Member
May 22, 2019
321
1,883
MI
I did end up opening some 580/680 BPS on friday right at close, closed them right before close today for 70% profit. I'm trying this early profit capturing thing this week. After CPI data tomorrow and taking a look at option interest I'll maybe have a sense for a new position for the week
 
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mongo

Well-Known Member
May 3, 2017
13,480
42,128
Michigan
Yeah looks like that wall mostly evaporated and there's two spikes at 740 [duh] and 750 currently.

View attachment 708933
Volume is not open interest. Trading existing options around boosts volume without changing OI.
If all the 700 activity was closing positions, it would have dropped from 44k to 35k.
The 740 and 750 volume could boost those OI. Like @Discoducky said, we'll know at 7am EST tomorrow.
 

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