Wiki Selling TSLA Options - Be the House

[Cherry Wine]

Opened 20x $650/$600 BPS expiring 10/8 at a $3.50 net credit. Also eyeing a position of 10/8 $690 cash covered puts before the day ends, just waiting on my $750s expiring today to drain off the remainder of their premium before opening (or, if they end up ITM, I'll roll them).

 

[jeewee3000]

Opened some -$700/+$650 BPS expiring 10/8 at $5.84 net credit per contract.

 

[cbh03]

Opened some $680/580 PBS expiring 10/8 @ $7.20 per contract. This a conservative (for me) play and I only opened about half of my usual number of contracts (for more money that I usually get for all of my contracts). I will likely open more BPS in the middle of next week once the P&D numbers are out and the target SP becomes more clear.

 

[ChefBoyardee]

IV next week is so nice

Once my BTC orders fill I'm going for 680/650 P for 10/8 with a large % of my margin. I don't usually go that far OTM but the risk/reward right now is so good, I'm ok leaving a few % RoC on the table for some peace of mind and more sensitivity to IV contraction

 

[strago13]

Closed 10/1 695 Puts for .16 and opened same thing at 8.15 for 10/08. Contract price was 2x this past week.

 

[ReddyLeaf]

Wow, I do like today’s MMD. While not perfectly timed, though fairly close because of the time width of today’s dip, I managed to close out a significant fraction of my 10/8-10/22 -c770/775s between 10:15-10:45. I had to buyback a -750p to free up some cash, then resold at -700p. Generally I’m quite pleased with the results and will sleep much better tonight. Cleared out half the CCs in the smallest & largest accounts, and all of the CCs in the other. Woooohoooooo! Still left with -p700s & -p750s for 10/8, ready for the IV crush and SP rise. Given the SP rebound so far, I’m quite pleased (except I was hoping to buy some calls before the rebound but took too long). GLTA.

 

[Drezil]

closed off 750/700 BPS staggared for 1$, 0.5, 0.4. Opened 750/700 BPS @7.2 in the dip for that.

also added to 700c for next week with the margin the closed BPS freed up @80 (with close order set at 95) in the dip (thats why i closed the BPS "so high") & already gained ~$5 on the rebound. If we do not hit 95 today i look into closing 50% of that early to take profits & speculate on a dip on monday. Better be prepared for the unexpected..

edit: oh .. and closed out all my -810c for next week (rolled from last week) with 30% profits. Maybe i resell them later if we rise towards 800 again.

 

[Cherry Wine]

Wow, premium on next week's puts is getting killed. Up over 50% on the BPS position I opened an hour ago.

 

[ChefBoyardee]

Wow, premium on next week's puts is getting killed. Up over 50% on the BPS position I opened an hour ago.

Yeah all my BTC filled at the same time, and the 680/650 for next week went from 3.40 to 2.40 within a few minutes

Edit: Aaand now it's back to 3.20

 

[BornToFly]

The rising value of the USD relative to EUR took me from positive margin usage to negative. (I.e. I had enough fixed margin selling BPS a week ago, but those same margin requirements in USD are worth more in EUR therefore I need more cash balance to hold the positions).

No big deal in this case, I was closing out some BPSes today anyway (expiry today) but it is a good reminder to leave me some more margin buffer for unexpected macros.

If you are getting margin calls at 770, YOU NEED A LOT MORE BUFFER....

 

[tradenewbie]

This week is an interesting journey.

Last week I rolled my 760cc to 775cc this week. On Monday, the SP jumped to 799 and I was so annoyed about myself and so scared of selling cc. On Tuesday when it dipped so I BTC it with a huge loss of $15 each contract. And because of this huge loss, I started to have a look at BPS which you guys discussed. I was not too sure about this approach because of using margin during last few weeks, but I decided to give a try eventually (becoz of the huge loss) and played very conservatively using -700/+600. Once I start playing it on Tuesday, I got so addicted to it and keep adding on Tue Wed Thursday.

This weekend I need to do some more research about this BPS to analyse the risk VS margin (maintenance, buffer, etc), but so far this week seems a good learning/trying experience.

 

[tradenewbie]

I have been waiting to close my BPS (-700/+600) with <.05 but seems the premium just won't go below .1 even it's so far OTM. When approximately will the premium start dropping tonight assuming the SP stayed about the same?

 

[corduroy]

Orders are in to close all my short legs. I'm carrying over my 10/8 BPSs that I opened Wed and Thursday, which will be about 25% of my margin. I was at 91% of my margin as of this morning, which was past my comfort range, but it was only for the overlap period of Thursday and Friday, knowing that most of it was closing today. These put premiums were enough for me to make an exception to my rule and load up. This was my best week ever, more than 3.5x my weekly goal, generated by 94% BPSs (the meat), 6% CCs (the gravy).

 

[CHGolferJim]

This week is an interesting journey.

Last week I rolled my 760cc to 775cc this week. On Monday, the SP jumped to 799 and I was so annoyed about myself and so scared of selling cc. On Tuesday when it dipped so I BTC it with a huge loss of $15 each contract. And because of this huge loss, I started to have a look at BPS which you guys discussed. I was not too sure about this approach because of using margin during last few weeks, but I decided to give a try eventually (becoz of the huge loss) and played very conservatively using -700/+600. Once I start playing it on Tuesday, I got so addicted to it and keep adding on Tue Wed Thursday.

This weekend I need to do some more research about this BPS to analyse the risk VS margin (maintenance, buffer, etc), but so far this week seems a good learning/trying experience.

You can also consider CC at higher strikes in outer months, to be really cautious. I sold some 18Mar22C900 the other day for $55 to get out of 760s I had for tomorrow, reduce the number of contracts by half, and obtain dry powder. It was barely $2/week/contract, but it allowed an escape and safety until trading/rolling opportunities arise.

 

[GleanerC]

I’ve posted in the general thread but also wanted to say a special thank you to those who participate here. Thank you to adiggs for starting this thread. Thank you to so many of the posters who so freely share their time and thoughts.

My wife and I are beginning our journey into early retirement and this thread, along with the entire forum, has helped make this possible. Not only have we been given the opportunity to step away from regular work a bit early but now are looking towards ways we can help our community find its way to a more sustainable energy future.

Also thank you to those who have also posted in the retirement threads. Information gathered there has helped us craft our way to the possibility of early retirement. Thank you.

I know I don’t post very often but I did want to let folks know how much their time and thoughts have been very helpful to me and my family.

Thank you!

 

[MikeC]

I have been waiting to close my BPS (-700/+600) with <.05 but seems the premium just won't go below .1 even it's so far OTM. When approximately will the premium start dropping tonight assuming the SP stayed about the same?

Why hold out for a few bucks when you could use the cash/margin to sell BPS for next week?

I suspect they're holding their value because everyone else is trying to buy to close their 700p-, giving it demand even though there's virtually no chance of it being in the money at the end of the day.

 

[tradenewbie]

Why hold out for a few bucks when you could use the cash/margin to sell BPS for next week?

I suspect they're holding their value because everyone else is trying to buy to close their 700p-, giving it demand even though there's virtually no chance of it being in the money at the end of the day.

I was thinking to close it when it was 0.3 in order to do a BPS -650/+500 for next week with a credit of $5, but I thought it would dropped quickly since it's so far OTM..... Is it normal? I saw the call side premium dropped significant for OTM

 

[deerfield]

I opened OCT08 -p700/+p600 for 7.90. I normally do $50 spreads. However, I'm hedging that IV will go down next week and will move from 600 to 650 when it's "cheaper". We'll see how this works out.

 

[adiggs]

I have been waiting to close my BPS (-700/+600) with <.05 but seems the premium just won't go below .1 even it's so far OTM. When approximately will the premium start dropping tonight assuming the SP stayed about the same?

My limited experience with closing spreads at nearly 0 hasn't been good. I had some way OTM options go to expiration because nobody would take my .05 offer to be bought out.

NOT-ADVICE, but how I handle these sorts of things.

Ideas:
1) Plan on these going to expiration. Then you'll get equivalent of a 0.00 closing price! The risk is an after hours execution. If you've been reading along then somebody else posted the last couple of days about buying some last moment options on the cheap to be ready to take advantage of a big after hours move (by exercise the options). Because of these sorts of things I'm a fan of a positive close.

I haven't experienced after hours expiration, but I think I've had one position go to expiration in a year and a half of selling options. I don't do that

2) Close the short put on its own. Then close the long put on its own. You might find that you can BTC the short put but you can't find a taker for the long put, as its price is really a fraction of a penny. The BTC on the short put might be identical, or off by a penny, from the spread close.

3) Don't try too hard to squeeze out the last penny. On 10 spreads paying 0.10 to be done with the position is $100 ($10 * 10). I view that $100 as a very small fraction of the overall income, buying yourself out of remnants of risk, AND freeing up margin that you can use immediately to sell next week's position (should you be looking to do that). Mostly it brings an end to the position.

I've seen radically large final day moves before and didn't enjoy them at all. That's why I paid .65 (out of 2.50ish) earlier this morning to close some 800cc. I didn't really want to spend that much, but I was also 70-75% profitable and I didn't want a later day share price spike turn a winning position into a deep losing position. Admittedly unlikely but also not 0%. Something like this is easily in my top 3 losses and maybe the single biggest - and all on a day where I missed a BTC by a couple of pennies that would have left me with a profitable position. Yeah - I buy my way out of high % winners and start looking for new game - I don't sweat the last few dimes.

 

[Discoducky]

My limited experience with closing spreads at nearly 0 hasn't been good. I had some way OTM options go to expiration because nobody would take my .05 offer to be bought out.

NOT-ADVICE, but how I handle these sorts of things.

Ideas:
1) Plan on these going to expiration. Then you'll get equivalent of a 0.00 closing price! The risk is an after hours execution. If you've been reading along then somebody else posted the last couple of days about buying some last moment options on the cheap to be ready to take advantage of a big after hours move (by exercise the options). Because of these sorts of things I'm a fan of a positive close.

I haven't experienced after hours expiration, but I think I've had one position go to expiration in a year and a half of selling options. I don't do that

2) Close the short put on its own. Then close the long put on its own. You might find that you can BTC the short put but you can't find a taker for the long put, as its price is really a fraction of a penny. The BTC on the short put might be identical, or off by a penny, from the spread close.

3) Don't try too hard to squeeze out the last penny. On 10 spreads paying 0.10 to be done with the position is $100 ($10 * 10). I view that $100 as a very small fraction of the overall income, buying yourself out of remnants of risk, AND freeing up margin that you can use immediately to sell next week's position (should you be looking to do that). Mostly it brings an end to the position.

I've seen radically large final day moves before and didn't enjoy them at all. That's why I paid .65 (out of 2.50ish) earlier this morning to close some 800cc. I didn't really want to spend that much, but I was also 70-75% profitable and I didn't want a later day share price spike turn a winning position into a deep losing position. Admittedly unlikely but also not 0%. Something like this is easily in my top 3 losses and maybe the single biggest - and all on a day where I missed a BTC by a couple of pennies that would have left me with a profitable position. Yeah - I buy my way out of high % winners and start looking for new game - I don't sweat the last few dimes.

As usual, great non-advice! I do #2 all the time and early. In fact, just did it! I paid $40 and made 99.5% profit. That $40 brings me a TON of peace of mind. I hate thinking about sold puts going into the afternoon on Friday.

Also, opened up a few (as I'm new to the BPS) at 630/730 10/8. The IV is huge and I feel is very low risk.

Anywho, happy weekend everyone!