Wiki Selling TSLA Options - Be the House

[bkp_duke]

Quick question - I had a buy limit for 10/15 p685's set to $6.95 at the SP rose from $779 to $785, the "last" ticked to $6.94, but my order didn't trigger - how can that be?

Probably not enough volume at that price point, so not all orders were filled, just some. Just a theory, but I've seen this when I try to close puts on a Friday. It will sit at or even below my price for a while, but not fill. Like there are no buyers.

 

[tradenewbie]

Yeah, but you have to set it up as option strategy.

Thanks, do you have a screenshot how I can do it? I tried to look it up on internet but it doesn't mention how to do it on mobile.

 

[samppa]

Thanks, do you have a screenshot how I can do it? I tried to look it up on internet but it doesn't mention how to do it on mobile.

You need to sort of do it manually.. go to TSLA -> options, tap on strategy builder, then set the buy/sell to close current position and buy/sell of new position.
Eg say you want to roll bull put spread -p700/+p650 from oct8 to oct15, you'd set it up as follows:
buy to close oct8 put700
sell to close oct8 put 650
sell to open oct15 put700
buy to open oct15 put 650

Then hope real hard the app will keep the legs displayed as a spread.. sometimes it will separate them to separate legs. It's still the same spread, just displayed differently.

 

[tradenewbie]

You need to sort of do it manually.. go to TSLA -> options, tap on strategy builder, then set the buy/sell to close current position and buy/sell of new position.
Eg say you want to roll bull put spread -p700/+p650 from oct8 to oct15, you'd set it up as follows:
buy to close oct8 put700
sell to close oct8 put 650
sell to open oct15 put700
buy to open oct15 put 650

Then hope real hard the app will keep the legs displayed as a spread.. sometimes it will separate them to separate legs. It's still the same spread, just displayed differently.

Thanks, I tried to do it but seems IB won't let me and displayed the following message:

"Cannot open orders on both sides of the same US option contract. You are attempting to add an order for a contract where an open order already exists on the opposite side of the market. Customers are prevented, by regulation, from entering a buy and a sell order for the same option contract. The right to be on both sides of the market is reserved for market makers."

 

[Drezil]

Quick question - I had a buy limit for 10/15 p685's set to $6.95 at the SP rose from $779 to $785, the "last" ticked to $6.94, but my order didn't trigger - how can that be?

Not on the exchange listed by your broker i suppose.
Every exchange has other fees & there was no trade to even the difference between the exchanges.
Or the 6.94 happened over the counter & only got reported at happening at this price.

Things are ... complex.

 

[Drezil]

Thanks, I tried to do it but seems IB won't let me and displayed the following message:

"Cannot open orders on both sides of the same US option contract. You are attempting to add an order for a contract where an open order already exists on the opposite side of the market. Customers are prevented, by regulation, from entering a buy and a sell order for the same option contract. The right to be on both sides of the market is reserved for market makers."

some of your open orders are the opposite of what you want to do.

Pause/cancel the open orders, do this & then resume/reopen them.

 

[FS_FRA]

Not on the exchange listed by your broker i suppose.
Every exchange has other fees & there was no trade to even the difference between the exchanges.
Or the 6.94 happened over the counter & only got reported at happening at this price.

Things are ... complex.

SMART routing on IBKR runs orders through a plethora of exchanges. I’ve had orders for multiple contracts fill on 3 different ones.

 

[tradenewbie]

some of your open orders are the opposite of what you want to do.

Pause/cancel the open orders, do this & then resume/reopen them.

Thanks, I am pretty sure I entered correctly. I can submit 4 legs without a problem, but they just won't let me do if 2 of the legs were the same strike of BPS, not sure why...

 

[Drezil]

SMART routing on IBKR runs orders through a plethora of exchanges. I’ve had orders for multiple contracts fill on 3 different ones.

And all this rerouting takes time & the order may not be valid anymore on the listed exchange when they switch.

Home | Interactive Brokers Luxembourg SARL

Leading online trading solutions for traders, investors and advisors, with direct global access to stocks, options, futures, currencies, bonds and funds. Transparent, low commissions and financing rates and support for best execution.

www.interactivebrokers.eu

Basically you place a BID at 100 at exchange A, someone buys the BID at 99.99 at exchange B via market-order. 99.99 is recorded as transaction-price, but you never had a chance - as you were listed on another exchange. If the BID stays below 100 then IB switches your trade to exchange B @100. But now there may not be a buyer to be found anymore. Also MM can do arbitrage between those exchanges.

Why did the buyer choose exchange B instead of A, even though you offered 1 cent more? Maybe fees, maybe because he cannot route to exchange A, ..

For this reason you can always be 1-2cents off the transaction-price - Especially on millisecond dips or Sweeps at market where the orders go faster through than the exchange can be switched.

 

[InTheShadows]

My plan is if my close orders don’t fill by tomorrow noon, I’m going to close them and open new spreads for next week. I want to capture the IV crush from the shareholders meeting. The IV crush will be larger on next weeks spreads than it will in this weeks.

Also the wider spreads tend to auto close faster because the long put is much further OTM so it looses its value sooner than those closer to the strike.

 

[Drezil]

And another 10x 700c bought @86.xx just closed @92.5. Order to buy the third or 4th time today @86.50 is set again. Hopefully we drop again before close..

10k on that in and out alone today .. wtf?! ..

 

[Yoona]

My plan is if my close orders don’t fill by tomorrow noon, I’m going to close them and open new spreads for next week. I want to capture the IV crush from the shareholders meeting. The IV crush will be larger on next weeks spreads than it will in this weeks.

Also the wider spreads tend to auto close faster because the long put is much further OTM so it looses its value sooner than those closer to the strike.

what strikes are you considering for next wk?
TIA!

 

[bkp_duke]

Just a counterpoint here, are we sure there will be an IV crush after the shareholders meeting? He expected something after P&D, and that didn't materialize.

After shareholders meeting, there are events in short order in Austin and Berlin, if I am remembering the calendar correctly.

I know historically after P&D there is an IV crush, I'm just pointing out this quarter isn't normal. Quarterly report is also looming large, about 2 weeks away.

 

[Tempus]

Just a counterpoint here, are we sure there will be an IV crush after the shareholders meeting? He expected something after P&D, and that didn't materialize.

After shareholders meeting, there are events in short order in Austin and Berlin, if I am remembering the calendar correctly.

I know historically after P&D there is an IV crush, I'm just pointing out this quarter isn't normal. Quarterly report is also looming large, about 2 weeks away.

If we're considering next week's options - we've got the Austin meeting tomorrow, and then the berlin event over the weekend - I don't think there is anything else expected prior to the end of next week. So theoretically one would think we'd see a reduction in uncertainty come monday. That said, i think the shareholder meeting is more likely to provide interesting, stock specific movement than the berlin event - that's really a job fair. If there's major news that comes out of it, I would be somewhat surprised.

 

[pz1975]

Just a counterpoint here, are we sure there will be an IV crush after the shareholders meeting? He expected something after P&D, and that didn't materialize.

After shareholders meeting, there are events in short order in Austin and Berlin, if I am remembering the calendar correctly.

I know historically after P&D there is an IV crush, I'm just pointing out this quarter isn't normal. Quarterly report is also looming large, about 2 weeks away.

There was definitely an IV drop between Friday and Monday reacting to the P&D report. It wasn't a total crush likely because of the shareholders meeting Thursday, but there was definitely a drop. I expect a further drop between Thurs and Fri.

 

[corduroy]

OK, I closed out this week's BPS leaving $1.60 on the table, so around 75% profits, but opened up early for next week 200x 600/685 for $5.25 net, $105k

I like those strikes. Followed you on that one, but with 196 fewer contracts.

 

[bkp_duke]

Based on some reports here, I decided to roll the bottom end of my 45 x 700/740 BPS to make it a 720/740 BPS.

That cost me $0.48 per contract, but I then opened up 40 x 720/745 BPS for $1.20 each with the newly available margin. Now to watch some more theta decay.

I feel like I'm learning from a group of geniuses. Truly, I haven't had a learning experience like this in years. Thanks for everyone's "not advice".

 

[ZeApelido]

"Mom, that tasty Berry Peanutbutter Spread sandwich really makes me feel strong, but you know when I grow up I'm gonna margin hundreds of thousands of dollars on Bull Put Spreads and I'm gonna feel like a #%$# stallion."

 

[InTheShadows]

what strikes are you considering for next wk?
TIA!

I haven’t gotten that far yet. I almost always go for one standard deviation OTM. Then I look for open interest walls and usually position myself behind the next one out of the money. Just now looking it looks like I’ll go with 700. That one is a big wall as it is but there are a ton of significant walls between 780 and 700.

Then I usually go for 100 wide spreads, in my 2 smaller accounts I will go down to 30 wide.

My hope is there is a ton of good news at the meeting and we rocket to 825-850 Friday and I can close those all out and then look to reestablish during MMD. I will set my initial close orders for 50% (if premarket does something crazy like 850+) then I’ll change them to 75 and if they get close to that I’ll start closing them manually. . o O { or should I open up bcs first then close the bps. }

Some things to ponder.

 

[InTheShadows]

Just a counterpoint here, are we sure there will be an IV crush after the shareholders meeting? He expected something after P&D, and that didn't materialize.

After shareholders meeting, there are events in short order in Austin and Berlin, if I am remembering the calendar correctly.

I know historically after P&D there is an IV crush, I'm just pointing out this quarter isn't normal. Quarterly report is also looming large, about 2 weeks away.

There was a pretty decent one for the puts in the first 1.5 hour after market opened. Then when it pulled back it went back up.