In your example, you could sell the long leg when you think the SP is peaking and keep the short leg as a covered call if you're confident it won't go higher. You could then close out the short leg on a dip if you don't want to be holding it for the next two years.
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Wiki Selling TSLA Options - Be the House
- Thread starter adiggs
- Start date
In your example, you could sell the long leg when you think the SP is peaking and keep the short leg as a covered call if you're confident it won't go higher. You could then close out the short leg on a dip if you don't want to be holding it for the next two years.
From my experience, it is unlikely for the beta to cause the car to drive into anything. But it's very likely to make the car do something unexpected that might cause another driver to run into it. Today it tried to make a lane change into the left lane, pretty nicely in between two cars which was a relatively small gap (but one that I would have happily gone into). Halfway through the merge it decided that something was wrong and stopped merging and just drove straddling both lanes and then stomped on the brakes and slowed to almost a halt in the middle of the road.
My brain hurts too much to run all the numbers. If the SP drops to 710, the 730 leg will go up in value a lot more than the 610 leg. Is that easier to roll without a loss than 2x 680/730 where both legs increase is value a little more "in sync"?
Knightshade
Well-Known Member
Rob Maurer recently posted one where it was accelerating into a road closed sign and he had to slam the brakes.
Another recent new FSDBeta owner had it routing to a school at night, car turned left and was going to drive through the metal gate that was closed at the entrance if they'd not intervened.
Yet another tweeted to elon it was gonna hit the gate of his development if he didn't stop it.
Elon himself mentioned things like this are still an issue and he suggested they should improve soon.
(further discussion prob belongs in the FSD area- I was just making the point hitting -people- seems to be the least likely "first fsd accident" as it seems extra super cautious around them compared to other things)
Sorry I wasn't really trying to dispute the running into things part. My point was more that its erratic behavior is likely to cause an accident, but not because the tesla ran into another car. I think any accident involving the beta will stoke a huge amount of FUD.
Remember that also the legs you are rolling into go up in value.. making it more expensive to purchase the long leg.
Very rough rules for rolling spreads:
- when tsla is at above or at short strike, you can roll for credit/strike improvement
- at midpoint you can usually roll for 0 credit/same strikes
- beyond that, expect to roll for debit
If you're in a rising IV, it can make rolling for credit harder.
So with wider spread, you have longer to go until midpoint is breached.
has anyone considered or thought about cashing out 401k and moving the profits to cash acct as new margin?
my initial estimate is maybe i can make 9-12x more income per week (on those useless shares) by doing that, even after paying the tax guy 50% for the 401k collapse
i know, i know - all eggs in one basket...
TIA!
my initial estimate is maybe i can make 9-12x more income per week (on those useless shares) by doing that, even after paying the tax guy 50% for the 401k collapse
i know, i know - all eggs in one basket...
TIA!
I have thought about that!
I retired so that I could roll over my 401k and company match accounts into a Rollover IRA. That solved my problem - now I can sell the spreads in the IRA and use the IRA as my pot of "big lump o cash" account. I'll pay the 10% penalty and the taxes and it'll be brutal if/when I need a big lump o cash (buy house, Roadster, ..). But not as brutal as having the money out of the account and paying taxes each year along the way.
Because I might also be earning enough outside of the IRA so that I never dip into that account and pay the penalty.
NOT-ADVICE of course but I even provided that feedback to my company's HR department. Their 401k and company match benefit was providing me with a significant incentive to leave the company once I turned 50. Mission accomplished
Good stuff, and link #1 added to the FAQ
bkp_duke
Well-Known Member
I think you can accomplish the same thing by rolling the 401k to an IRA.
I can do cash-backed spreads in Fidelity, so I've been moving funds out of the 401k to the IRA.
Just make sure it's a direct transfer, not one where you lay hands on the money, to avoid any potential tax implications.
I think you have to quit your job to do a rollover though.
bkp_duke
Well-Known Member
Not always. My company allows rollovers while still employed.
Working to move my wife's funds (with her permission) out of her Solo401k and into her IRA (both at Fidelity). Solo401ks are a "special sauce" that makes this a little more difficult to accomplish.
AquaY
Member
Hmmm. Good question. The basics of the wider the spread the more leeway you have to roll at a credit as well as the additional profit was why I chose the spread.
It fit my return and capital requirements even though it's a little wider than I like lately.
If the SP price drops below 730, what with 732-735 being a critical support level and 732 being a breakout level the SP could easily drop to well below 670.
A break through 732 would be a full Bearish correction signal and a very scary event for me.
So I chose a nice wide spread to give me more management room. For me 680 is not enough insurance. Especially since I have BPS positions with short legs of 685. I could have narrowed it some but it fit me .
So... a call spread for next week $830-930 is going for $14... I know we love to hate calls lately, but if we thought the price was going to stay under control, that would be mighty attractive... room up to $880 or so to react/roll. Or buy back the $830 on Thursday morning and let the $930 ride. Hmm.
Sadly, I don't have an especially strong belief the price will stay under control.
Sadly, I don't have an especially strong belief the price will stay under control.
Never recovers? In that case LEAPs have less dollars at risk for the same inital Delta.
OTM:
100 shares of TSLA: $81k
100 Delta of Jan 24s 2x1080: $32k
DITM:
91 Delta Jan 24 400: $48k
91 Delta TSLA: $74k
Can also buy puts to protect downside risk with the savings:
Jan 24 700P: $16.8k
Looks like call sales the week before have improved from ridiculously bad, to merely bad. Who knows - maybe they'll even make their way to decent. I looked at the 850/950; about 7.50 credit.
I will still be watching from the sidelines
My intent was to compare initial cash values, not initial delta. i.e. $100k of Tesla shares vs $100k of LEAPS.
If you want to keep a large cash position + LEAPS, sure that is obviously less at risk. There is a difference in tax consideration as well as LEAPS force liquidation.
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bkp_duke
Well-Known Member
STO 100 x 10/22 BPS +690/-720 @ $3.05
STO 85 x 10/22 BPS +700/-730 @ $3.25
That's as brave as I want to be going into earnings.
STO 85 x 10/22 BPS +700/-730 @ $3.25
That's as brave as I want to be going into earnings.
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