Wiki Selling TSLA Options - Be the House

[BornToFly]

Question for those doing large trades. 100, 200, 300, + contracts.
Do you leg into the position with smaller orders or do you put in an order for the large size all at once?
How is the execution you get?

Fidelity won't let me do more than 200 contracts at a time, so if I'm doing 1000 contracts, I have to do 5 separate trades.

 

[EV forever]

Well all of my GTC closing orders triggered this morning, so now to decide about opening new positions. Trying to decide if it is worth it to open another for this week or just go for 10/22 now.

 

[Cherry Wine]

Opened up a small 10x $850/$950 bear call spread position for $1.04. Hard to see how inflation numbers aren’t bearish tomorrow and keep TSLA from going too high this week. But you never know, thus the small size and high strike.

 

[M3Rider]

STO 10/22 cc900 @2.05, too soon to get the best price. Thinking to close this at 50% or before 10/20.

 

[bkp_duke]

Debating rolling up my BPS's. That's a heck of a PUT wall at 750.

 

[M3Rider]

Might create some downside pressure?

 

[Yoona]

Debating rolling up my BPS's. That's a heck of a PUT wall at 750.

my IC is there (750-850) and 1 Std Dev doesn't reach it

 

[ReddyLeaf]

Debating rolling up my BPS's. That's a heck of a PUT wall at 750.

Subtract a couple from that wall. Just rolled-p750s to 10/22 -p760s for ~$13.50 cr. Actually managed a decent timing of that one, buying at 809 and selling 10 min later at 803. Edit: MaxPain sure shows a huge amount of actionable 750p and then nothing much until 800c, like a bunch of traders have learned their lesson and stay away from that area. Similar pattern has been in place in previous weeks and in future weeks for quite awhile.

 

[Drezil]

took 50% off the table from my (now) 775/725 BPS (was: 775/700, rolled up to free up margin/roll down again if we turn down). roll-adjusted open was -5.80, bought 50% back at -2.90 (50% profit). Current price: 3.40. If we hit 5$ again i reopen.

Sold all 700c for this friday, turned 29/10 800c into 800/820 diagonal spread (or in other words: sold 820 lcc @4$ for this friday. Will close or roll up & out).

All my calls now have an assigned CC to make them into diagonal spreads.

Theta-surplus currently: around 1.5-2k/day. If we blow up over 820 i barely participate in any runup - but i doubt we will until friday.

 

[Mulligan Jake]

That is the problem I have if I sit at home on the computer. I'm trying to trade once a week, and enjoy the money the other days. But there is a sick part of me that feels the need to look at it constantly and find more trades. Maybe we need to start a support group....

Sign me up for the support group. I sell 2 strangles each Wednesday or Thursday for the following Friday. Then I may have to make an adjustment or two close to expire. But any day I’m home all day I feel the need to look for more opportunities. And this gets me out of my comfort zone and adds stress. I do best when I sell my strangles and just go play golf.

 

[BornToFly]

Don't forget that normal rules don't apply for 10/22. 10% stock move between Wed. market close and Friday close is very possible, and it could be in either direction. The problem with spreads is if the market closes and you are safely well out of the money, and then it moves 10% AH, you can suddenly lose 10X your original profit. My goal is to not be anywhere near the SP with my spreads next Wednesday.

 

[Chenkers]

I'm currently sitting on 730 contracts for this week and could go as high as 1000.

I STO another 275 contracts, all of them 735/760 830/860 IC's, 200 @ $4.00 & 75 @ $3.82 in the other account. That should do me for this weeks options. I'll be watching with interest as MM's try to keep it under $810 or possibly $800 for this week.

 

[BornToFly]

Don't forget that normal rules don't apply for 10/22. 10% stock move between Wed. market close and Friday close is very possible, and it could be in either direction. The problem with spreads is if the market closes and you are safely well out of the money, and then it moves 10% AH, you can suddenly lose 10X your original profit. My goal is to not be anywhere near the SP with my spreads next Wednesday.

Just to expand on this. My goal is to make steady money without "gambling." If you are trading such that if you guess right, you make lots of money, but if you guess wrong, you lose it all, you aren't doing this right. You want to sell options so that no matter what happens, you are safe (at least with a modest roll that doesn't take you out of the game for months). The reason these spreads pay well, is because TSLA is volatile. Don't let the volatility take out years of gains with one earnings report (and more specifically, Wall streets response - which can be completely irrational short term).

 

[AquaY]

I never intentionally leg in. For a particular strike, either a spread offers a better risk reward or a naked option does, but it cannot be both. I often spread large trades over time. I consider risking anything over a few percent of net assets to be a largish trade, because most of my portfolio is already tied into the stock or other options.

Sorry for the poor choice of terms in my post.
I didn't mean leg in as to put on the legs of a complex trade. Which is exactly what it means in Options trading.e.

In the old days it was also used as a way to describe doing small trades to get to the overall position that you want.
Doing small trades to get the position was a way to not effect the market against your goal. It's really an institutional concern or a concern in lower volume trading.
I was wondering if people doing large trades say 200 contracts enter 1 trade for 200 or if they maybe enter 4 trades 50X, . Like that.

 

[BornToFly]

Sorry for the poor choice of terms in my post.
I didn't mean leg in as to put on the legs of a complex trade. Which is exactly what it means in Options trading.e.

In the old days it was also used as a way to describe doing small trades to get to the overall position that you want.
Doing small trades to get the position was a way to not effect the market against your goal. It's really an institutional concern or a concern in lower volume trading.
I was wondering if people doing large trades say 200 contracts enter 1 trade for 200 or if they maybe enter 4 trades 50X, . Like that.

I think if you are using strikes with lots of interest, like 740 instead of 745, 200 is a small number. I don't see the need to break it down to 4x50.

 

[AquaY]

Don't forget that normal rules don't apply for 10/22. 10% stock move between Wed. market close and Friday close is very possible, and it could be in either direction. The problem with spreads is if the market closes and you are safely well out of the money, and then it moves 10% AH, you can suddenly lose 10X your original profit. My goal is to not be anywhere near the SP with my spreads next Wednesday.

That's where I'm set up now for next week.( Mostly).
Every BPS I have on is more than 10% OTM with the exception of 1 position having a short leg with a 725 strike which I'm currently up 34%
I will decide how to handle that trade either the end of this week or beginning of next.
I feel more comfortable with positions at 705 and under. Not just because it is greater than the 10% but because 705 is a strong support level.
I also don;t have an calls on for next week because I'm Bullish

 

[deerfield]

Wow I'm SO glad I sold those 810CC's for this week!

That's what I said last midweek, until Friday when I changed my tuned and said darn! I should've kept those 810/860C spread

 

[Cherry Wine]

Just to expand on this. My goal is to make steady money without "gambling." If you are trading such that if you guess right, you make lots of money, but if you guess wrong, you lose it all, you aren't doing this right. You want to sell options so that no matter what happens, you are safe (at least with a modest roll that doesn't take you out of the game for months). The reason these spreads pay well, is because TSLA is volatile. Don't let the volatility take out years of gains with one earnings report (and more specifically, Wall streets response - which can be completely irrational short term).

Have you drilled down to a specific percentage OTM for next week yet? I'm thinking at least 15% on the call side, and definitely something on the other side of $900, at least for now.

On the put side, I'd like to be on the other side of $700 if I can find some compelling premiums.

 

[Tslynk67]

Subtract a couple from that wall. Just rolled-p750s to 10/22 -p760s for ~$13.50 cr. Actually managed a decent timing of that one, buying at 809 and selling 10 min later at 803. Edit: MaxPain sure shows a huge amount of actionable 750p and then nothing much until 800c, like a bunch of traders have learned their lesson and stay away from that area. Similar pattern has been in place in previous weeks and in future weeks for quite awhile.

Come on dude, get with the programme, naked puts are soooo July 2021...

 

[BornToFly]

Have you drilled down to a specific percentage OTM for next week yet? I'm thinking at least 15% on the call side, and definitely something on the other side of $900, at least for now.

On the put side, I'd like to be on the other side of $700 if I can find some compelling premiums.

I kind of think it depends on much more we climb between now and next Wed. close. If we gain 10% in the next week, I think the upside is more limited, but the downside (sell the news) could be significant. I have Put short legs at 700 and 720 for next Friday. I think those are safe enough to at least roll easily (but obviously I'm not sure). I don't have any call spreads or covered calls, and won't sell any until after the ER (premiums are too low above 900). I've been all in since 2013. I've seen Tesla beat expectations many times, I've guess correctly about the beat, but I have seen the SP drop massively the next day (even after being up 10% in AH the day of). Crazy stuff. (My "off the record" hope, is that we climb >850, and then the beat is so massive, that we stay relatively flat and don't drop after. An additional climb is less likely if we climb a lot the next 7 days, but I'm not putting any money on the line, because as soon as I do, the opposite of what I expect will happen).