I looked into it and would have chosen them. But they don't offer services in Liechtenstein and thus I cannot trade there with my company & would have to pay more than double the tax :/
But they specialize in options trading & have a nice interface.
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Wiki Selling TSLA Options - Be the House
- Thread starter adiggs
- Start date
But they specialize in options trading & have a nice interface.
i am thinking of 10/22 Short Strangle for quick $$$
-p720 (delta 8)
-c970 (delta 3)
credit 4.53
margin 30k
98% probability
both shorts are 15% away
this will put useless cash to work; thoughts?
-p720 (delta 8)
-c970 (delta 3)
credit 4.53
margin 30k
98% probability
both shorts are 15% away
this will put useless cash to work; thoughts?
670/720 BPS = 1.7 6X = 10.2 for 30K margin. But risk of higher losses because more leverage?
3x -720/+620 will give 6.3 credit and require 30k in margin?
IB calculates profit probability 99%
(these are yesterdays closing prices of course, monday will be different)
bkp_duke
Well-Known Member
46 hours, 2 minutes, 24 seconds until the market opens....
Could be worse. Those 3-day weekends really put me into full-blown withdrawal.
In my case for a BPS I have to have the cash to cover the width and volume of the spread, so in this case 210 x (735 - 650) X 100 = $1.785M cash is reserved for the trade, which also equals the maximum loss (less the premiums, of course)
breakeven is almost same as SS, but this BPS is way better since it's a defined max loss (SS max loss is infinite), and higher credit
bkp_duke
Well-Known Member
I'm honestly beginning to wonder, if I continue to do BPS / IC long term, if the old adage "cash is king" might be right.
Don't get me wrong, I love my TSLA shares, but even conservatively, my math is showing BPS can destroy the returns on HODL. It's almost a no-brainer in tax-advantaged accounts.
Don't get me wrong, I love my TSLA shares, but even conservatively, my math is showing BPS can destroy the returns on HODL. It's almost a no-brainer in tax-advantaged accounts.
~$450k
I have Schwab, they just use your max loss as their margin calculation it seems.
I’m hoping that @adiggs provides his usual verbose response. I’m also very interested in the answers because I just opened a taxable account at Fidelity to try out selling BPS/IC. Requested level 3, but only granted level 1 so far (probably since I haven’t funded the account yet
). In my mind, more margin must be required than just 100x spread difference. If you sell 585/685 BPS, go to a remote island and do nothing, and the SP closes at 600, you must spend $60,000 and the +p585 expired worthless. How can that not require more margin? In my case, initially funding the account with $20K, I’m hoping to start small, probably only sell one BPS, maybe two. With no other assets/stock, will it be possible?Edit: watching the SP action for the past 2-3 weeks, SOMETHING is really different. I’m still pushing my -c750 from weeks ago (now up to -c800 11/05). I definitely like the price action, but it just makes it tough for me to keep rolling. Might have to accept assignment and start selling puts.
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Last week was my first significant loss week in a couple of years of selling options.
I got a bit greedy, not allowing for that much of a rise and was overloaded with BCS c/w BPS with the BCS C- legs 820, 830 and 835. I was also expecting/hoping that there would be some defence of the Call walls when I got up in the early hours to sort everything about an hour before the close. What I found was the stock price climbing again and by the time I'd sorted out what to do, all the C- were well in the money and the loss rapidly increasing. I ended up closing everything out but didn't get time to STO any rolls or replacement positions. While the loss was significant it still equates to just 2 weeks worth of premiums, so shouldn't take too long to recover.
I aim to be a little more conservative and less complacent around events in future. I also need to listen to the danger signs and be prepared to close out positions earlier if needed to mitigate the risk of a larger loss. This was also the first week in ages I can recall seeing Call walls on the Open Interest get ignored on relatively modest volume. Perhaps the presence of all those massive 700 to 750 put walls gives the MM enough wins not to bother with the call walls. Whatever the case we should be more cautious about how much MM or others are prepared to defend call walls in future.
I got a bit greedy, not allowing for that much of a rise and was overloaded with BCS c/w BPS with the BCS C- legs 820, 830 and 835. I was also expecting/hoping that there would be some defence of the Call walls when I got up in the early hours to sort everything about an hour before the close. What I found was the stock price climbing again and by the time I'd sorted out what to do, all the C- were well in the money and the loss rapidly increasing. I ended up closing everything out but didn't get time to STO any rolls or replacement positions. While the loss was significant it still equates to just 2 weeks worth of premiums, so shouldn't take too long to recover.
I aim to be a little more conservative and less complacent around events in future. I also need to listen to the danger signs and be prepared to close out positions earlier if needed to mitigate the risk of a larger loss. This was also the first week in ages I can recall seeing Call walls on the Open Interest get ignored on relatively modest volume. Perhaps the presence of all those massive 700 to 750 put walls gives the MM enough wins not to bother with the call walls. Whatever the case we should be more cautious about how much MM or others are prepared to defend call walls in future.
pz1975
Active Member
The trend is your friend. This is why I have been 95:5 puts:calls sold the last month or so. If TSLA starts going down and it seems sustaining I will adjust in the other direction. I know I am sometimes giving up profit by not selling both puts and calls but my number 1 priority in these strategies is to avoid losses. That’s the only way I see myself being able to do this for years.
In the last 20 weeks, I only have one week with a loss and that amount was <50% of my average profits of all the other weeks. I also have a few weeks with <$1K profits. I definitely don’t hit the super-high profit weeks (>$100K) like others here, but I prefer to be the turtle rather than the hare. I’m not trying to sound preachy or all-knowing, I just want to provide a perspective to newcomers that it is fine to be safe and conservative with these strategies and not feel the need to fly to close to the sun in order to maximize long-term profits.
In the last 20 weeks, I only have one week with a loss and that amount was <50% of my average profits of all the other weeks. I also have a few weeks with <$1K profits. I definitely don’t hit the super-high profit weeks (>$100K) like others here, but I prefer to be the turtle rather than the hare. I’m not trying to sound preachy or all-knowing, I just want to provide a perspective to newcomers that it is fine to be safe and conservative with these strategies and not feel the need to fly to close to the sun in order to maximize long-term profits.
Well, if you were selling calls successfully for weeks when the rest of us were too scared, maybe you still came out ahead in the end. With some luck, being aggressive might make you more money. I sleep better being more conservative and having very few negative trades. This reminds me of when I was Hang Gliding in the 90s. I was in my twenties and cocky. I was out-flying guys twice my age who had been in the sport much longer. We had taken a trip to a more distant flying site for the weekend (big time commitment). There were probably 30-50 guys all setup at the top, ready to launch, but the breeze was blowing down the mountain instead of up the hill. This meant nobody was launch/flying and the weekend trip was going to be a bust. Hawks were thermaling out front and I knew I could climb and fly a couple hours if I could just get off the hill. I got impatient and decided I could run fast enough and get airborne. Everyone watched as I hauled my glider on my shoulders and waited for a lull in the downwind. Then I started running..., and running. My glider never started flying and I eventually tripped and slid into a bunch of bushes. Everyone was nice and helpful as I had to haul my damaged glider back up the hill, but I'm sure all the older guys had a good laugh later. There was a reason nobody else was trying it....
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