Wiki Selling TSLA Options - Be the House

[InTheShadows]

Main volume-action today was at 1000$-strikes. 250k calls & 60k puts traded .. will be interesting to see what sticks tomorrow...

Haha. Yea. There isn’t anything else close. Well we are getting closer to 1050 now. I’m sure those will be the volume winners tomorrow.

 

[euro2012]

Still holding my 1000/1100 bcs. No where near as many as others, but still. What are the thoughts of buying back the sold $1000, but holding the bought 1100 for a day or two. Time is against me, obviously, but the froth seems to be pretty high keeping the sp going up after hours. Likely quite risky, just wondering what smarter people than I think.

 

[InTheShadows]

Wow. Look at that delta on the call side compared to the put side. 11 for 950 put, 12 for an 1150 call.

I guess MM think we are going to the moon!

Edit: forgot screenshot

 

[st_lopes]

Been some time since I've posted, but it has been quite the "living vicariously through you" learning experience, as I've watched many of you evolve from margin or cash-covered puts and covered calls to iron condors. I began dabbling in ICs myself last week after having finally unwound some rolled positions from a few months ago. All in, it's been a very productive year of premium selling, tracking to 50% YTD return on selling options around my core positions.

As a refresher on where my positions landed:

• On our last round of deep sell-offs, I found myself needing to sell covered leaps against core shares to raise cash to settle margin calls; I have since closed all of those sold leaps for net credits (yay!);
• I have rebuilt my mix of leaps vs. core shares, now sitting at 25/75% mix; half the leaps were bought ITM/ATM, the other half were bought at 1000/1020 Jan 2024; they're all now ITM; several at 100%+ returns at this stage;
• I finally unwound a set of margin sold puts, dating back from Feb/Mar of this year, netting the entire accumulated rolled amounts;

Last two weeks I entered my first ICs using 50% of the margin that was freed up from finally closing the margin sold puts, and netted some handsome weekly profits.

This week has so far been an exercise in patience.

• Last Friday, using 30% of margin, sold 1000/1050 BCS in to this week; I was waiting for a pull back to enter BPS to form the IC;
• Today, using another 20% of margin, sold 1100/1150 BCS;
• With the margin already tied up by the two batches of BCS, sold 770/820 BPS;
• This was in addition to CCs (790/795/800 11/5 expiry) against my core shares and some LCCs (1050 12/17 expiry) against about half my leaps; those I'll just keep rolling, maybe forever!

The chart looks and smells like a blow off-top, but we'll really only know over the next couple days. If it looks like the top may not yet have been reached, then I will be looking to move the 1000/1050, likely rolling to try to improve strike by widening the spread. This will likely consume most of my remaining margin, and is playing with fire. Part of me also wants to roll the BPS (staying in this week) up and tighter to multiply contract count, but if this is a blow-off top, that could be a true set up for disaster. So, practicing patience.

I was hoping to see some other position management learnings from many of you today, but overall sentiment seems to be that this is just the beginning of the rally and many are just getting out of the way, eating the loss, and repositioning for the next legs.

I may instead join you all in that thought process, absorb the loss against my YTD cumulative gains (eating current loss would be 1/6 of YTD gains, if we end at a complete loss... 1/3) and move on, but I'm very tempted to wait out the next couple days to see if the blow-off materializes.

 

[InTheShadows]

Still holding my 1000/1100 bcs. No where near as many as others, but still. What are the thoughts of buying back the sold $1000, but holding the bought 1100 for a day or two. Time is against me, obviously, but the froth seems to be pretty high keeping the sp going up after hours. Likely quite risky, just wondering what smarter people than I think.

I kept 2 of the 1050 long leg of mine this am. They are now worth more than 2x what I bought back the 1000 short leg for. Will be setting trail stop on them after 10am.

 

[ammulder]

It feels like there are a lot of lessons to be learned today… if only it was easy to write down exactly what they are! Now I’m wondering, did I really sell those calls for downside protection, or only because the put spread premiums turned down and the calls provided additional income? Or because put spread premiums were down so I had closer to the money put spreads so I needed downside protection? Or because it seemed like free money at the time? I fear my brain may be a bit revisionist; maybe I need to note my reasoning when I open the position?

Anyway, bummed that the calls showed a substantial loss, glad the put spreads made me whole, hoping it stays that way for the rest of the week.

 

[BornToFly]

It feels like there are a lot of lessons to be learned today… if only it was easy to write down exactly what they are! Now I’m wondering, did I really sell those calls for downside protection, or only because the put spread premiums turned down and the calls provided additional income? Or because put spread premiums were down so I had closer to the money put spreads so I needed downside protection? Or because it seemed like free money at the time? I fear my brain may be a bit revisionist; maybe I need to note my reasoning when I open the position?

Anyway, bummed that the calls showed a substantial loss, glad the put spreads made me whole, hoping it stays that way for the rest of the week.

Well, I sold the BCS because 1) I was a little greedy. 2) I did not think we would climb 10% today after climbing Thursday/Friday and reaching ATH both days, so I thought they were low risk positions. I am still upset with myself even though I am back to where I was a month ago. However, I still have higher position BCS open, so if we keep gaining, my losses may continue. The next few days won't be fun.

 

[Ogre]

Listening to you guys struggling with losses is disheartening.

Now I’m second guessing one of my late calls. I sold some 920/ 970 BPS. Wondering if I’m flying too close to the sun now.

I have a second position at 900/920 which feels a lot safer. I should probably stick a little further from the money.

 

[adiggs]

Listening to you guys struggling with losses is disheartening.

Now I’m second guessing one of my late calls. I sold some 920/ 970 BPS. Wondering if I’m flying too close to the sun now.

I have a second position at 900/920 which feels a lot safer. I should probably stick a little further from the money.

It's also a better balance of what year long reality will be. It's not always 100% winners on high and growing premiums The party on that latter bit has been fun the last couple of months but that doesn't generalize to all times.

I appreciate all of the comments from people about what they're learning here. Those comments create the opportunity for others to learn the same lessons. They also create the possibility of hearing the same lesson many times. At least for me that increases the likelihood that I'll hear it. But it only took me like 4 months to hear the BPS info - sometime I'm slow of hearing


What we learn the last few days, and the next little bit to come, may help us individually improve win rates from 90% to 95% (numbers made up to illustrate the idea). And that will have a huge favorable impact to overall profitability (1 loss in 10 is a LOT more than 1 loss in 20). And hopefully a huge beneficial impact on our stomach acid along the way.

 

[BrownOuttaSpec]

Listening to you guys struggling with losses is disheartening.

Now I’m second guessing one of my late calls. I sold some 920/ 970 BPS. Wondering if I’m flying too close to the sun now.

I have a second position at 900/920 which feels a lot safer. I should probably stick a little further from the money.

Option trading isnt all sunshine and rainbows, it's good to hear about the loses as well. It's gambling and even "the house" loses sometimes. I feel like we are in no man's land right now: no one knows what going to happen, it could be a big gain/loss or nothing at all. Be safe out there and dont think you're good when your just getting lucky.

 

[ammulder]

Ok, so putting today‘s call mess behind…

If tomorrow is anything like today, I think I should maybe roll put spreads to next week tomorrow. At least half of them? If the stock price keeps going up, I will really fear an eventual pullback (whether you call it a blow off top or a squeeze ending or whatever). I don’t want to be selling puts Friday after four more days of rising where the good premiums are for much higher strikes (even if $100 OTM it won’t feel safe).

But if tomorrow is more relaxed or a pullback, I feel like waiting until later in the week, even though my current put spreads are nicely profitable.

Premarket will be interesting. Could go any which way.

 

[juanmedina]

Weeks like this will happen again unless we stop trading. For me I think I need to rethink what I am trying to do with this strategy so I can size my position accordingly. The problem is that now I have more cash than ever and I just feel like I need to use it and always do something with it... which is bad. Today was supposed to be an awesome day, not fun..

@Chenkers I haven't see you post in a while, do you have any open trades for the week?

 

[AquaY]

I tried that… pocketed a couple grand and watch the share price explode.

That’s the risk yiu take.
Its still a much better method than waiting for the stock to go down to where you want to buy it.
making a few grand as opposed to making nothing and all that

 

[ninpb]

What a day to pick to start the wheel for me.
Sold pretty far out the money, even way past my strike rules that I've set for myself (20%, 25%, 30% off SP). Also I didn't want to start with 2 weeks expire but here I am.

Trading - 11/5 700p at the start 1.48
IRA - 11/5 1700c towards the end 1.29. I wasn't planning to start CC on this one and told myself to wait for a few days to see if it's a rocket ship but i couldn't help myself.

What do you guys think? Too far OTM? even worth it?

 

[bkp_duke]

Option trading isnt all sunshine and rainbows, it's good to hear about the loses as well. It's gambling and even "the house" loses sometimes. I feel like we are in no man's land right now: no one knows what going to happen, it could be a big gain/loss or nothing at all. Be safe out there and dont think you're good when your just getting lucky.

Exactly. Today was Tesla's single largest point gain on record, ever (according to Rob Maurer).

Not the largest %, but still it was something that unless you were substantially OTM, it was going to collectively teach us some lesions.

 

[MindOverMatcha]

My heart goes out to all the players grappling with how to handle their losses. It's similar to going through the stages of grief and loss: denial, isolation, anger, bargaining, depression, and acceptance (not always in that order).

My first option play ever was selling CCs when TSLA broke through the Bollinger Bands and held above it for 3 days. I figured it was bound to stay flat or go down. Of course, it rocketed up and my first-ever option play turned into a 2k loss off my 60k portfolio.

I will say, what helped me learn and keep going were the posters on this thread sharing their losses, how they'd adjust, and their lessons from the trade. It's never easy sharing the ugly side of options trading after riding high for so long. I'm sure there's a lot of people benefiting from these experiences like I did "growing up".

 

[AquaY]

What a day to pick to start the wheel for me.
Sold pretty far out the money, even way past my strike rules that I've set for myself (20%, 25%, 30% off SP). Also I didn't want to start with 2 weeks expire but here I am.

Trading - 11/5 700p at the start 1.48
IRA - 11/5 1700c towards the end 1.29. I wasn't planning to start CC on this one and told myself to wait for a few days to see if it's a rocket ship but i couldn't help myself.

What do you guys think? Too far OTM? even worth it?

No such thing as “too far OTM”
you may not be making large profits but that’s okay. Seems very safe what u are doing and it is generating some revenue and you are now in it.
For me I have to have skin in the game to truly pay attention and learn.
Take your time and trade with YOUR comfort level.
no one else’s.

 

[pz1975]

I think the major lesson learned (at least for me) is that when the SP starts to move fast, better to close/roll losing positions fast and then just do almost nothing. This is like the Evergrande week except the other way. I tend to stay very OTM so was able to roll my way out of that by the end of the next week.

This time I had some sold 1,000 calls but quickly rolled them out to a more OTM strike in December (1,150) and will ignore them until then unless they become near the money and then will roll again.

Now I have my BPS from last Friday that I will just keep until before close Friday and some 1,200 and 1,250 CCs sold today that I will watch close but think are very unlikely to get ITM. Looking back, I shouldn’t have sold those 1,200 and 1,250 CCs today as the risk:reward was too high but I felt like I needed to do something. Lesson learned.

So the week overall will give a much smaller profit than recently and I will need to baby those December CCs but by staying very OTM, I have managed to avoid a disaster unless it really does go >1,200 (but then my portfolio will have mooned some more so it won’t be that bad!).

 

[vikings123]

Happy to report that I had a losing day too lol. 10X 970 CC that I had sold for 4.70 last week were bought back for an average price of 18$. It could have been worse. Good think I also have a bunch of BPS that are 85% profitable so far.

An evergrande effect followed by the reverse evergrande

For tomorrow I think we will see another gap up and probably a blow off the top but this time feels different so who knows. Tesla usually runs two days in a row and then it kind of trades in a range for the rest of the week. That volume might be telling us a different story. I’m staying on the sidelines for now and will wait for dips and support lines to form. Will be looking to sell some Nov/Dec calls if we gap up tomorrow.

 

[vikings123]

I think the major lesson learned (at least for me) is that when the SP starts to move fast, better to close/roll losing positions fast and then just do almost nothing. This is like the Evergrande week except the other way. I tend to stay very OTM so was able to roll my way out of that by the end of the next week.

This time I had some sold 1,000 calls but quickly rolled them out to a more OTM strike in December (1,150) and will ignore them until then unless they become near the money and then will roll again.

Now I have my BPS from last Friday that I will just keep until before close Friday and some 1,200 and 1,250 CCs sold today that I will watch close but think are very unlikely to get ITM. Looking back, I shouldn’t have sold those 1,200 and 1,250 CCs today as the risk:reward was too high but I felt like I needed to do something. Lesson learned.

So the week overall will give a much smaller profit than recently and I will need to baby those December CCs but by staying very OTM, I have managed to avoid a disaster unless it really does go >1,200 (but then my portfolio will have mooned some more so it won’t be that bad!).

Agreed. Looks like you posted just I was typing my message. I’m actually glad I closed out early and also decided against rolling.