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Wiki Selling TSLA Options - Be the House
- Thread starter adiggs
- Start date
I have three sons, 2 are over 21 and one just under and all have part time income. The older 2 have their own accounts with options active so are able to self trade with my guidance (the regular group trading strategy discussions are a lot of fun). The youngest could open his own account but wouldn't be given full options permission and so I'm currently shadow trading for him in my account. This basically involves placing separate trades and tracking everything through a spreadsheet. The plan is to transfer everything into his own account after he turns 21. By then there should be well over $100k US in the account.
All these accounts are with IBKR and all Portfolio Margin (the only option in Australia). Only my account has full margin permission.
Last edited:
Heh - the smart ones?
The power of compounding is amazing but have anyone thought about using the extra money each week to buy lower and lower strike but maintain the same weekly income goal? It’s almost certain one future week our BPS will be wrecked badly. If you are able to be so far out of money your BPS will 99.9% expired worthless. I fear panic and margin calls will be what stops my BPS / IC gravy train.
Well argh - I had a whole bunch of posts regarding some thread improvements quoting different people, and I managed to lose them during the Insert Quotes process. And I'm not going to go scan through 10 pages of the thread to find them again. At least I have a separate bag of notes.
This post is me trying to catch up and summarize various posts about ideas for the thread.
First off - I'm very happy to see that the regularly scheduled programming hasn't been thrown off stride by this somewhat different topic being woven into the thread.
The high level structure won't change much. We'll keep this thread as-is, with a link in post #1 to the Glossary / FAQ thread that was created off of the post by @Chenkers (thanks for that!). Hopefully Chenkers will have the ongoing ability to edit that post. Either way the intent is for that thread to have either 1 post only, or maybe like the Papafox thread - only Chenkers (possibly a small number of additional folks that particularly want) will post stuff in that FAQ thread. We'll keep that really concentrated with good stuff, whether old or new.
In practice I expect that thread / post to be a good collecting point (in somebody's opinion, which can be anyone) of links to specific posts back in this thread (or elsewhere). Whether the post is management technique, risk management, margin, mechanics of a trade, getting started, or otherwise that somebody has found valuable at some point or another.
My own preference is to write it in the form of a typical FAQ, with a sentence up to a short paragraph about a topic, and then a link that provides insight relevant to that sentence / topic (I expect there will be few topics with "the answer". Not only is it ok - I think its desirable for a single question / topic in the glossary to point to multiple resources and/or postsw here in the thread. I believe that most interesting topics have had multiple points of view that jointly have been helpful.
Of course we'll have a paragraph up front about not being advice, or "the answer", etc.. We all make our own decisions and experience our own consequences kind of stuff.
A few thoughts about a sub forum. And I think that there have been several responses, leaving us with a pretty strong consensus around retaining this structure of our current thread, augmented with the glossary / FAQ. An important benefit of that FAQ is that people will have somewhere to go read all this good stuff in a concentrated way, as they prepare to join us.
I'd like the the topics / questions in the FAQ numbered (or similar) so its easy to respond here with something like "that's covered in #15 in the FAQ".
Chenkers has a good start on a list of subject areas. We'll just go with that as a starting point for organization. We can always change, add, or remove stuff later. I see no reason, right now, to do anything different. Heck - I see no particular reason to do anything other than have chenkers create an outline / structure that makes sense in their mind.
For stuff in the FAQ, I think it's this simple -- any one person, for any reason they deem worthy, can add something to the FAQ. There's no need to gain permission, or have a vote. Something like a wiki where other editors might come along after an edit to change something, but in practice it'll be augmentation with another link and a different point of view.
My best idea for how to identify this stuff is for people to write up their blurb for the FAQ and send it in a private message to Chenkers. The structure is a sentence or two that describes the topic / question, and a link that points to the thread, video, or other resource that addresses the sentence. It can be multiple links. And it can be internal to TMC, this thread, as well as external (Youtube and Investoepedia come to mind).
Once we have some stuff in the FAQ, the structure for new stuff will be obvious - write your contributions as close to that form as possible.
But we'll have Chenkers (paging @Chenkers) respond back and let us know what format they would like to have things in. Write up stuff as close to teh FAQ format, and make things as easy for chenkers to add as possible.
Anybody that has a bookmark, link, or other pointer they've been saving because it was useful to them - that's enough to qualify it for the FAQ.
OH!!! Interestingly enough, I expect that a really important source for these pointers / bookmarks / links will be lurkers and new contributors to the thread. Newcomers to the thread should feel STRONGLY encouraged to call out these resources that you found particularly helpful to getting started.
Last on this topic - I'd like to avoid throwing "write the FAQ" onto chenkers' broad shoulders. We can all contribute text to be copy/pasted, and should be thinking along those lines.
Saving the most important for last - A NAME!!
I think I've grabbed the various suggestions. I'm claiming first among equals status for this topic, and vetoing the variations on getting rich, teslanaire, or things that feel like taunting to me, at least as I see them. To the degree that it matters, we're going humble with maybe a light dose of self-deprecating humor.
Some suggestions about a more general trading theme, and already a few posts about keeping it more focused on selling options. We'll keep the thread title focused on option selling. As I think I've posted elsewhere, I see no need for any sort of formal enforcement - buying options (outside of a spread) isn't verboten - it's just not the theme, and the title plus the tenor of the ongoing conversation should be more than sufficient to keep this from becoming a buying options thread. We've got some other threads to point people to, even if those are relatively dead.
I also like that we've been hearing from people with ideas that are somewhere between straight sales or purchases / more complex option strategies. These sorts of posts are how we find new ways of doing things, or try them out and discard them (each of us individually making our own decisions along those lines, and experiencing our own consequences). So no change from today - we'll 'accept' anything, but with a focus on selling options.
I also want to keep the thread focused on TSLA options. There is value in trading other tickers, and some mention of it. I think there won't be anything beyond having TSLA in the thread title needed for this. It also emphasizes something that I consider important / critical to our success - our individual deep knowledge about TSLA rather than markets in general. I do believe I can take what I've learned here out on the road and make money in different tickers - I just also know that to be comfortable doing so, I've got a lot of effort to learn that company/ticker to get started with that.
Some suggestions about this being a guide. I think it was @deerfield (but could be wrong) that put into words what I also prefer about what we've got - that is more like a coffee house conversation than something more formal and guided. I totally agree - and this isn't a guide
. And it REALLY isn't -my- guide!
And lastly I particularly like @Knightshade contribution "The house always wins - be the house". It's something that comes through in the OA training, so it ties back there, and its an idea that resonated with me all the way back when I got started. Maybe I know too much statistics, but that idea of being the house instead of playing against the house - I like it, and its what we're doing.
Therefore my name suggestion:
Selling TSLA options aka The House always wins - Be The House
A bit long, but it gets a bit of whimsy into the name. It might be a bit strong at implying that people will always win doing this and that's not good. I'm not worried though - we can handle that in post 1 of this thread. We can also get something similar into the FAQ that clears up any sense that there's a guarantee that people will make money selling options.
I'll also note that if we don't like the new name, I expect it'll be easy to ask for another name change. This isn't a one and done thing.
TODO: Give people a chance to respond to as much of this opus as desired, especially the name. Speak now or hold your peace! Well, at least for a few days
TODO: Get feedback from chenkers about the form they'd like to receive FAQ / glossary addition in.
TODO: And I'll ask @Right_Said_Fred to change this particular thread back to a regular thread. With the FAQ thread I see no reason or value in this being a wiki as well.
This post is me trying to catch up and summarize various posts about ideas for the thread.
First off - I'm very happy to see that the regularly scheduled programming hasn't been thrown off stride by this somewhat different topic being woven into the thread.
The high level structure won't change much. We'll keep this thread as-is, with a link in post #1 to the Glossary / FAQ thread that was created off of the post by @Chenkers (thanks for that!). Hopefully Chenkers will have the ongoing ability to edit that post. Either way the intent is for that thread to have either 1 post only, or maybe like the Papafox thread - only Chenkers (possibly a small number of additional folks that particularly want) will post stuff in that FAQ thread. We'll keep that really concentrated with good stuff, whether old or new.
In practice I expect that thread / post to be a good collecting point (in somebody's opinion, which can be anyone) of links to specific posts back in this thread (or elsewhere). Whether the post is management technique, risk management, margin, mechanics of a trade, getting started, or otherwise that somebody has found valuable at some point or another.
My own preference is to write it in the form of a typical FAQ, with a sentence up to a short paragraph about a topic, and then a link that provides insight relevant to that sentence / topic (I expect there will be few topics with "the answer". Not only is it ok - I think its desirable for a single question / topic in the glossary to point to multiple resources and/or postsw here in the thread. I believe that most interesting topics have had multiple points of view that jointly have been helpful.
Of course we'll have a paragraph up front about not being advice, or "the answer", etc.. We all make our own decisions and experience our own consequences kind of stuff.
A few thoughts about a sub forum. And I think that there have been several responses, leaving us with a pretty strong consensus around retaining this structure of our current thread, augmented with the glossary / FAQ. An important benefit of that FAQ is that people will have somewhere to go read all this good stuff in a concentrated way, as they prepare to join us.
I'd like the the topics / questions in the FAQ numbered (or similar) so its easy to respond here with something like "that's covered in #15 in the FAQ".
Chenkers has a good start on a list of subject areas. We'll just go with that as a starting point for organization. We can always change, add, or remove stuff later. I see no reason, right now, to do anything different. Heck - I see no particular reason to do anything other than have chenkers create an outline / structure that makes sense in their mind.
For stuff in the FAQ, I think it's this simple -- any one person, for any reason they deem worthy, can add something to the FAQ. There's no need to gain permission, or have a vote. Something like a wiki where other editors might come along after an edit to change something, but in practice it'll be augmentation with another link and a different point of view.
My best idea for how to identify this stuff is for people to write up their blurb for the FAQ and send it in a private message to Chenkers. The structure is a sentence or two that describes the topic / question, and a link that points to the thread, video, or other resource that addresses the sentence. It can be multiple links. And it can be internal to TMC, this thread, as well as external (Youtube and Investoepedia come to mind).
Once we have some stuff in the FAQ, the structure for new stuff will be obvious - write your contributions as close to that form as possible.
But we'll have Chenkers (paging @Chenkers) respond back and let us know what format they would like to have things in. Write up stuff as close to teh FAQ format, and make things as easy for chenkers to add as possible.
Anybody that has a bookmark, link, or other pointer they've been saving because it was useful to them - that's enough to qualify it for the FAQ.
OH!!! Interestingly enough, I expect that a really important source for these pointers / bookmarks / links will be lurkers and new contributors to the thread. Newcomers to the thread should feel STRONGLY encouraged to call out these resources that you found particularly helpful to getting started.
Last on this topic - I'd like to avoid throwing "write the FAQ" onto chenkers' broad shoulders. We can all contribute text to be copy/pasted, and should be thinking along those lines.
Saving the most important for last - A NAME!!
I think I've grabbed the various suggestions. I'm claiming first among equals status for this topic, and vetoing the variations on getting rich, teslanaire, or things that feel like taunting to me, at least as I see them. To the degree that it matters, we're going humble with maybe a light dose of self-deprecating humor.
Some suggestions about a more general trading theme, and already a few posts about keeping it more focused on selling options. We'll keep the thread title focused on option selling. As I think I've posted elsewhere, I see no need for any sort of formal enforcement - buying options (outside of a spread) isn't verboten - it's just not the theme, and the title plus the tenor of the ongoing conversation should be more than sufficient to keep this from becoming a buying options thread. We've got some other threads to point people to, even if those are relatively dead.
I also like that we've been hearing from people with ideas that are somewhere between straight sales or purchases / more complex option strategies. These sorts of posts are how we find new ways of doing things, or try them out and discard them (each of us individually making our own decisions along those lines, and experiencing our own consequences). So no change from today - we'll 'accept' anything, but with a focus on selling options.
I also want to keep the thread focused on TSLA options. There is value in trading other tickers, and some mention of it. I think there won't be anything beyond having TSLA in the thread title needed for this. It also emphasizes something that I consider important / critical to our success - our individual deep knowledge about TSLA rather than markets in general. I do believe I can take what I've learned here out on the road and make money in different tickers - I just also know that to be comfortable doing so, I've got a lot of effort to learn that company/ticker to get started with that.
Some suggestions about this being a guide. I think it was @deerfield (but could be wrong) that put into words what I also prefer about what we've got - that is more like a coffee house conversation than something more formal and guided. I totally agree - and this isn't a guide
. And it REALLY isn't -my- guide!And lastly I particularly like @Knightshade contribution "The house always wins - be the house". It's something that comes through in the OA training, so it ties back there, and its an idea that resonated with me all the way back when I got started. Maybe I know too much statistics, but that idea of being the house instead of playing against the house - I like it, and its what we're doing.
Therefore my name suggestion:
Selling TSLA options aka The House always wins - Be The House
A bit long, but it gets a bit of whimsy into the name. It might be a bit strong at implying that people will always win doing this and that's not good. I'm not worried though - we can handle that in post 1 of this thread. We can also get something similar into the FAQ that clears up any sense that there's a guarantee that people will make money selling options.
I'll also note that if we don't like the new name, I expect it'll be easy to ask for another name change. This isn't a one and done thing.
TODO: Give people a chance to respond to as much of this opus as desired, especially the name. Speak now or hold your peace! Well, at least for a few days
TODO: Get feedback from chenkers about the form they'd like to receive FAQ / glossary addition in.
TODO: And I'll ask @Right_Said_Fred to change this particular thread back to a regular thread. With the FAQ thread I see no reason or value in this being a wiki as well.
I know that i have!
I've also had a related thought, at least one that is relevant to me. I've been using most of my cash to back my BPS (moar, MOAR). Mostly I believe that I can stop a disastrously bad outcome (max loss) with a variety of techniques, and that's enough of a backstop. That can still leave me with a really big (account %) loss.
So along those lines, my thought is to establish some level of contracts and corresponding cash / margin commitment as my personal max position size, and then as cash is acquired, I let it build up beyond that. Or maybe turn into it shares / leaps (especially the retirement accounts) as a resource to handle those bad times and allow me to continue selling my personal max position size.
I'd be smarter to only use 1/3rd or whatever of the cash, but I'm ok with my risk / reward profile, and I make my own decisions and experience my own consequences (and I REALLY don't want to go back to paycheck life
).
pz1975
Active Member
I like your thread title idea but would make it more succinct: Selling TSLA Options - Be the HouseThis post is me trying to catch up and summarize various posts about ideas for the thread.
First off - I'm very happy to see that the regularly scheduled programming hasn't been thrown off stride by this somewhat different topic being woven into the thread.
The high level structure won't change much. We'll keep this thread as-is, with a link in post #1 to the Glossary / FAQ thread that was created off of the post by @Chenkers (thanks for that!). Hopefully Chenkers will have the ongoing ability to edit that post. Either way the intent is for that thread to have either 1 post only, or maybe like the Papafox thread - only Chenkers (possibly a small number of additional folks that particularly want) will post stuff in that FAQ thread. We'll keep that really concentrated with good stuff, whether old or new.
In practice I expect that thread / post to be a good collecting point (in somebody's opinion, which can be anyone) of links to specific posts back in this thread (or elsewhere). Whether the post is management technique, risk management, margin, mechanics of a trade, getting started, or otherwise that somebody has found valuable at some point or another.
My own preference is to write it in the form of a typical FAQ, with a sentence up to a short paragraph about a topic, and then a link that provides insight relevant to that sentence / topic (I expect there will be few topics with "the answer". Not only is it ok - I think its desirable for a single question / topic in the glossary to point to multiple resources and/or postsw here in the thread. I believe that most interesting topics have had multiple points of view that jointly have been helpful.
Of course we'll have a paragraph up front about not being advice, or "the answer", etc.. We all make our own decisions and experience our own consequences kind of stuff.
A few thoughts about a sub forum. And I think that there have been several responses, leaving us with a pretty strong consensus around retaining this structure of our current thread, augmented with the glossary / FAQ. An important benefit of that FAQ is that people will have somewhere to go read all this good stuff in a concentrated way, as they prepare to join us.
I'd like the the topics / questions in the FAQ numbered (or similar) so its easy to respond here with something like "that's covered in #15 in the FAQ".
Chenkers has a good start on a list of subject areas. We'll just go with that as a starting point for organization. We can always change, add, or remove stuff later. I see no reason, right now, to do anything different. Heck - I see no particular reason to do anything other than have chenkers create an outline / structure that makes sense in their mind.
For stuff in the FAQ, I think it's this simple -- any one person, for any reason they deem worthy, can add something to the FAQ. There's no need to gain permission, or have a vote. Something like a wiki where other editors might come along after an edit to change something, but in practice it'll be augmentation with another link and a different point of view.
My best idea for how to identify this stuff is for people to write up their blurb for the FAQ and send it in a private message to Chenkers. The structure is a sentence or two that describes the topic / question, and a link that points to the thread, video, or other resource that addresses the sentence. It can be multiple links. And it can be internal to TMC, this thread, as well as external (Youtube and Investoepedia come to mind).
Once we have some stuff in the FAQ, the structure for new stuff will be obvious - write your contributions as close to that form as possible.
But we'll have Chenkers (paging @Chenkers) respond back and let us know what format they would like to have things in. Write up stuff as close to teh FAQ format, and make things as easy for chenkers to add as possible.
Anybody that has a bookmark, link, or other pointer they've been saving because it was useful to them - that's enough to qualify it for the FAQ.
OH!!! Interestingly enough, I expect that a really important source for these pointers / bookmarks / links will be lurkers and new contributors to the thread. Newcomers to the thread should feel STRONGLY encouraged to call out these resources that you found particularly helpful to getting started.
Last on this topic - I'd like to avoid throwing "write the FAQ" onto chenkers' broad shoulders. We can all contribute text to be copy/pasted, and should be thinking along those lines.
Saving the most important for last - A NAME!!
I think I've grabbed the various suggestions. I'm claiming first among equals status for this topic, and vetoing the variations on getting rich, teslanaire, or things that feel like taunting to me, at least as I see them. To the degree that it matters, we're going humble with maybe a light dose of self-deprecating humor.
Some suggestions about a more general trading theme, and already a few posts about keeping it more focused on selling options. We'll keep the thread title focused on option selling. As I think I've posted elsewhere, I see no need for any sort of formal enforcement - buying options (outside of a spread) isn't verboten - it's just not the theme, and the title plus the tenor of the ongoing conversation should be more than sufficient to keep this from becoming a buying options thread. We've got some other threads to point people to, even if those are relatively dead.
I also like that we've been hearing from people with ideas that are somewhere between straight sales or purchases / more complex option strategies. These sorts of posts are how we find new ways of doing things, or try them out and discard them (each of us individually making our own decisions along those lines, and experiencing our own consequences). So no change from today - we'll 'accept' anything, but with a focus on selling options.
I also want to keep the thread focused on TSLA options. There is value in trading other tickers, and some mention of it. I think there won't be anything beyond having TSLA in the thread title needed for this. It also emphasizes something that I consider important / critical to our success - our individual deep knowledge about TSLA rather than markets in general. I do believe I can take what I've learned here out on the road and make money in different tickers - I just also know that to be comfortable doing so, I've got a lot of effort to learn that company/ticker to get started with that.
Some suggestions about this being a guide. I think it was @deerfield (but could be wrong) that put into words what I also prefer about what we've got - that is more like a coffee house conversation than something more formal and guided. I totally agree - and this isn't a guide
And lastly I particularly like @Knightshade contribution "The house always wins - be the house". It's something that comes through in the OA training, so it ties back there, and its an idea that resonated with me all the way back when I got started. Maybe I know too much statistics, but that idea of being the house instead of playing against the house - I like it, and its what we're doing.
Therefore my name suggestion:
Selling TSLA options aka The House always wins - Be The House
A bit long, but it gets a bit of whimsy into the name. It might be a bit strong at implying that people will always win doing this and that's not good. I'm not worried though - we can handle that in post 1 of this thread. We can also get something similar into the FAQ that clears up any sense that there's a guarantee that people will make money selling options.
I'll also note that if we don't like the new name, I expect it'll be easy to ask for another name change. This isn't a one and done thing.
TODO: Give people a chance to respond to as much of this opus as desired, especially the name. Speak now or hold your peace! Well, at least for a few days
TODO: Get feedback from chenkers about the form they'd like to receive FAQ / glossary addition in.
TODO: And I'll ask @Right_Said_Fred to change this particular thread back to a regular thread. With the FAQ thread I see no reason or value in this being a wiki as well.
We all will know what that means without the extra words.
I'm all in favour of what you've suggested here @adiggs . People can post FAQ Q&A in this thread from time to time or DM me and I'll add them in. I'll be having a go at a basic outline of content over this weekend and will add in some FAQ as well. These will all be edited and developed over time.Well argh - I had a whole bunch of posts regarding some thread improvements quoting different people, and I managed to lose them during the Insert Quotes process. And I'm not going to go scan through 10 pages of the thread to find them again. At least I have a separate bag of notes.
This post is me trying to catch up and summarize various posts about ideas for the thread.
First off - I'm very happy to see that the regularly scheduled programming hasn't been thrown off stride by this somewhat different topic being woven into the thread.
The high level structure won't change much. We'll keep this thread as-is, with a link in post #1 to the Glossary / FAQ thread that was created off of the post by @Chenkers (thanks for that!). Hopefully Chenkers will have the ongoing ability to edit that post. Either way the intent is for that thread to have either 1 post only, or maybe like the Papafox thread - only Chenkers (possibly a small number of additional folks that particularly want) will post stuff in that FAQ thread. We'll keep that really concentrated with good stuff, whether old or new.
In practice I expect that thread / post to be a good collecting point (in somebody's opinion, which can be anyone) of links to specific posts back in this thread (or elsewhere). Whether the post is management technique, risk management, margin, mechanics of a trade, getting started, or otherwise that somebody has found valuable at some point or another.
My own preference is to write it in the form of a typical FAQ, with a sentence up to a short paragraph about a topic, and then a link that provides insight relevant to that sentence / topic (I expect there will be few topics with "the answer". Not only is it ok - I think its desirable for a single question / topic in the glossary to point to multiple resources and/or postsw here in the thread. I believe that most interesting topics have had multiple points of view that jointly have been helpful.
Of course we'll have a paragraph up front about not being advice, or "the answer", etc.. We all make our own decisions and experience our own consequences kind of stuff.
A few thoughts about a sub forum. And I think that there have been several responses, leaving us with a pretty strong consensus around retaining this structure of our current thread, augmented with the glossary / FAQ. An important benefit of that FAQ is that people will have somewhere to go read all this good stuff in a concentrated way, as they prepare to join us.
I'd like the the topics / questions in the FAQ numbered (or similar) so its easy to respond here with something like "that's covered in #15 in the FAQ".
Chenkers has a good start on a list of subject areas. We'll just go with that as a starting point for organization. We can always change, add, or remove stuff later. I see no reason, right now, to do anything different. Heck - I see no particular reason to do anything other than have chenkers create an outline / structure that makes sense in their mind.
For stuff in the FAQ, I think it's this simple -- any one person, for any reason they deem worthy, can add something to the FAQ. There's no need to gain permission, or have a vote. Something like a wiki where other editors might come along after an edit to change something, but in practice it'll be augmentation with another link and a different point of view.
My best idea for how to identify this stuff is for people to write up their blurb for the FAQ and send it in a private message to Chenkers. The structure is a sentence or two that describes the topic / question, and a link that points to the thread, video, or other resource that addresses the sentence. It can be multiple links. And it can be internal to TMC, this thread, as well as external (Youtube and Investoepedia come to mind).
Once we have some stuff in the FAQ, the structure for new stuff will be obvious - write your contributions as close to that form as possible.
But we'll have Chenkers (paging @Chenkers) respond back and let us know what format they would like to have things in. Write up stuff as close to teh FAQ format, and make things as easy for chenkers to add as possible.
Anybody that has a bookmark, link, or other pointer they've been saving because it was useful to them - that's enough to qualify it for the FAQ.
OH!!! Interestingly enough, I expect that a really important source for these pointers / bookmarks / links will be lurkers and new contributors to the thread. Newcomers to the thread should feel STRONGLY encouraged to call out these resources that you found particularly helpful to getting started.
Last on this topic - I'd like to avoid throwing "write the FAQ" onto chenkers' broad shoulders. We can all contribute text to be copy/pasted, and should be thinking along those lines.
Saving the most important for last - A NAME!!
I think I've grabbed the various suggestions. I'm claiming first among equals status for this topic, and vetoing the variations on getting rich, teslanaire, or things that feel like taunting to me, at least as I see them. To the degree that it matters, we're going humble with maybe a light dose of self-deprecating humor.
Some suggestions about a more general trading theme, and already a few posts about keeping it more focused on selling options. We'll keep the thread title focused on option selling. As I think I've posted elsewhere, I see no need for any sort of formal enforcement - buying options (outside of a spread) isn't verboten - it's just not the theme, and the title plus the tenor of the ongoing conversation should be more than sufficient to keep this from becoming a buying options thread. We've got some other threads to point people to, even if those are relatively dead.
I also like that we've been hearing from people with ideas that are somewhere between straight sales or purchases / more complex option strategies. These sorts of posts are how we find new ways of doing things, or try them out and discard them (each of us individually making our own decisions along those lines, and experiencing our own consequences). So no change from today - we'll 'accept' anything, but with a focus on selling options.
I also want to keep the thread focused on TSLA options. There is value in trading other tickers, and some mention of it. I think there won't be anything beyond having TSLA in the thread title needed for this. It also emphasizes something that I consider important / critical to our success - our individual deep knowledge about TSLA rather than markets in general. I do believe I can take what I've learned here out on the road and make money in different tickers - I just also know that to be comfortable doing so, I've got a lot of effort to learn that company/ticker to get started with that.
Some suggestions about this being a guide. I think it was @deerfield (but could be wrong) that put into words what I also prefer about what we've got - that is more like a coffee house conversation than something more formal and guided. I totally agree - and this isn't a guide
And lastly I particularly like @Knightshade contribution "The house always wins - be the house". It's something that comes through in the OA training, so it ties back there, and its an idea that resonated with me all the way back when I got started. Maybe I know too much statistics, but that idea of being the house instead of playing against the house - I like it, and its what we're doing.
Therefore my name suggestion:
Selling TSLA options aka The House always wins - Be The House
A bit long, but it gets a bit of whimsy into the name. It might be a bit strong at implying that people will always win doing this and that's not good. I'm not worried though - we can handle that in post 1 of this thread. We can also get something similar into the FAQ that clears up any sense that there's a guarantee that people will make money selling options.
I'll also note that if we don't like the new name, I expect it'll be easy to ask for another name change. This isn't a one and done thing.
TODO: Give people a chance to respond to as much of this opus as desired, especially the name. Speak now or hold your peace! Well, at least for a few days
TODO: Get feedback from chenkers about the form they'd like to receive FAQ / glossary addition in.
TODO: And I'll ask @Right_Said_Fred to change this particular thread back to a regular thread. With the FAQ thread I see no reason or value in this being a wiki as well.
Also I like the title amendment suggested by @pz1975
I like that title too from pz1975. I'm going to get in touch with the mod about making the change!
Cool. WRT the FAQ, be aware that anybody (I use that loosely — “many of us”) can edit the first ”wiki” post in that thread. So we could make our own updates rather than requiring Chenkers to do so, or we could edit that post to ask people to run proposals by Chenkers rather than changing the post directly.
My plan is to reduce my risk/exposure and not increase it as I keep accumulating profitable weeks but I will probably not increase the amount cash that I put into BPS; with BPS paying between 5-10%. When ever I hit my profit goal in my after-tax account I will use the excess profit to buy stock, sell cash secured puts, keep cash for expenses or give it away to family or people in need. Obviously at some point the cash that I use for BPS will be all from profits and I feel my BPS are on the safe side.
To try to keep myself for getting wrecked I have stock price alarms at certain prices so I hopefully have enough time to login to my computer and do something about it. I used to have conditional stop loss orders but I stopped doing that because I like to have control over my trades and I might take a loss, roll the trade or wait it out depending on the situation. @Chenkers do you have any stop orders or anything to manage your trades specially since you are in a different time zone? I am curious what others do?
For the title of the thread I was thinking: "Premium Kings" lol.
InTheShadows
Active Member
I like the name. And I think the word always is ok, particularly is there is a section in the first post that clarifies that the word is used based on probabilities and sticking to a plan and that there will be a few losers. The biggest risk I see is personal emotions and getting too greedy.
I've never used any stop orders or stop losses. I do try to monitor the share price very closely, particularly at the start of trade. But I do need to get some sleep at some point (I'm currently still working), so thankfully the share price usually settles into a pattern after the first part of a trading day (early AM hours for me).
The approach I take is to try to set my strikes with a clear idea of where the stock will likely trade across the week. The better I've judged this the less I have to worry about the share price through the week. I also try to keep the likely end of week price in mind and try to stay calm and not react if the share price makes bigger moves early in the week that look temporary. Most of my IC's end up with the short strikes being around $60-80 apart with the spread wings set $25-30 either side. Occasionally the share price will move within $10 of a short strike and margin will start to shrink (mainly late in the week). But so far I've had a good run over the last few months and haven't had to roll much or get defensive.
I've considered that approach but for now I've decided to keep backing myself and treat each weeks trading on its merits. I just updated my tracking spreadsheet and worked out that I've averaged $204k USD in premiums per week over the last 8 weeks (range $129-282k). So I've had a good run while the share price has mostly behaved itself and since I freed up my margin. I realise there will come a time where there is a big surprise move and I get smashed. But I learned enough about defensive rolling spreads a few months ago that I should be able to manage it OK. I figure that the cash reserve I've built up over these stronger weeks will allow me to weather the occasional bad week or two when it does eventually come along.
I've also come from a (relatively) late start and moderate account position (compared to some around here), so have been in catch up mode for a while and it's hard to know when to change down gears. However, I am planning to restructure part of my accounts soon to be better suited for philanthropic giving and will likely start getting progressively more conservative after that.
bkp_duke
Well-Known Member
This is exactly my plan. Right now I'm more aggressive than I want to be, but not more than my comfort level. Once the account builds up, I want to focus on 3 things:
1) continue to build at a certain $$$ amount per week
2) build my retirement accounts (since they trade with far fewer tax implications), especially the Roth. I can't contribute to that anymore except via a backdoor, but I sure as hell can focus on growing it like mad.
3) build up the kids Coverdell ESA accounts (mentioned this a few pages back). Grow those up tax-free so that college+grad school are completely paid for.
This is me as well, I’m more aggressive than I want to be in the future. But getting to a point where I can leave more and more capital not deployed.
This is hard for me, unused capital burns a hole in my pocket and it’s a real challenge learning to hold back.
This thread can be deceptive in that is makes it things look easy when we talk about these gains. But the people on this thread put serious time and effort into their positions….
For instance, I got progressively more aggressive on the call side of the spread late Thursday this week and thinking that I was being safe when I placed a late week BCS as stock price reached 795… then my new 810/880 spread was threatened within 10 minutes.…. The stock action and volume of Thursday lulled me into thinking that was safe and there would be no late buying.
But much like a Powell meeting, an event can cause a jolt of speculation (or manipulation?) in one direction and shake you out of your position.
So, I ate 25k loss, after booking 50k thag week… so I think I ended up with 35k profit this week…. But had I looked to next week IC , I would have avoided it. Which is what I did after taking that loss.
How to handle rolling late week trades with spreads is challenging. The trade I did above was unwise… mainly because of the event that evening. I planned to hold that position for a few hours… thinking I hit a local high and a normal late day mild decrease was imminent.
Great week for my options trades. Cleared 14k in my IRAs, all trades positive except one put roll ($0.28/sr loss
). Unfortunately, it was a lot of work, trading in/out, and higher risks that I don’t want to repeat every week. Sold risky c830s on 10/1 and closed 10/5-6 (could have left open, but scared by shareholder meeting). Watched that afternoon spike and felt relief. Bought back c775s for ~20%, p750s for 60-70%, c830s for 60-75%, then finally sold c800/805s on Friday AM for $1.17-$1.62 (too slow, could have got closer to $4). I actually let expire (against my better judgment and everyone’s advice) because of the broker warnings about day trading unsettled funds. Lots of risks in those trades, and not particularly well-timed.I still have a few -c775s that have been rolled and I cannot yet buyback completely. Unless a miracle SP drop occurs this week, I will likely lose the shares and start selling more puts, aka really running the wheel. I’m now closer to 1:1 put/calls in most accounts, and of course making more selling puts than calls.
I’m finally recovering from my disastrous Sept 24th-28th. Looking back, at least I beat @Lycanthrope in September (barely made profits, though enough to live on if needed). Also, realized that I’m finally in the 100k club (unfortunately it’s not weekly).
So what did I learn this week: I trade too much. I need to get back to choosing the strike that will expire worthless, waiting for the $20 SP move, and then then trading once. My -p750s are already in. Thinking about-c840s @$6 for Monday, though might need to go higher if the Berlin factory tour makes the mainstream media.
I see BCS and BPS mentioned often, which I assumed was bull call spread and bull put spread. There seems to be tons of discussion on that, so let me know if I'm missing something in my terminology.
In any case what piqued my interest was the recent post about making $100k a week off $2M capital.
My take on bull call spreads vs put spreads is to go with whichever has highest volatility, because that's the one that will have the highest return. In my experience that's usually calls, which is why I don't normally deal with puts. For example, taking numbers today off TD TOS (Saturday) with 5 trading days left:
For Oct 15 600/700 spreads @ SP 785:
Bull call spread: costs 97.23 per option, so max profit $2.77, ROI is 2.85%
Bull put spread: needs $97.40 capital per option, credits $2.60, ROI is 2.67%
There's 6% more profit with the calls than puts, at least on paper.
For fun, I backtested the performance of investing in weekly spreads for TSLA from 2016 to 2021, assuming a weekly investment (ie capital risk) of $1M. Returns would be substantially better if the weekly investment was compounded by increasing it to be proportional to total gains. However, the increase would depend on tax situation, etc so a fixed $1M weekly is a start.
Spread cost and strike values for past weeks were adjusted proportional to SP today. Max profit would be the (strike spread - option cost) for call spreads or the credit for put spreads.
Although the max profit is higher for higher strikes, the returns are better when not being as aggressive because they're subject to losses more often when the SP drops quickly.
Caveat: I make mistakes on spreadsheets all the time!
Edit: The slightly better theoretical return for call spreads may be more than offset by better liquidity explained in this post / article.
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i think more traders here use Bear Call Spread than Bull Call Spread
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