Maybe we hit the top, and the profit taking can start. I probably took serious losses for nothing (other than I kept from being wiped out if the climb had continued). We'll see if I'm calling it too early. In my selling frenzy, I missed that I still have 1100/1150s for next week that I had rolled early yesterday. Still holding those for now.
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Wiki Selling TSLA Options - Be the House
- Thread starter adiggs
- Start date
Knightshade
Well-Known Member
Rolled 10/29 $1100s to 11/5 $1150 for $1.75 credit... soon as I did this current $30+ pullback began.
You're welcome.
You're welcome.
So you're saying that yesterday was that black swan we watch out for.
Good to know that we're in the middle of a black swan.
I STO 200 x 1250/1300 BCS earlier on the run-up for $1.50 then added a few more at $2 and another 100 at $2.40. With the sharp drop-off these are now sitting around $1 so have done OK in less than an hour. I'm tempted to close them and reset but I feel the main part of the run has lost it's steam so may let the rest drain out until closer to expiry.
jeewee3000
Active Member
That's what I thought when we hit $1050 earlier today.
I'm too paralyzed to open large positions now.
In all seriousness, this is the reminder this thread needed that there is no such thing as a free lunch. As bad as this is, imagine being caught out in a violent downward move where your margin is shrinking at the same time, and losses are being exacerbated- not offset- by the price of the underlying.
Closed out the Put Spread I thought was too close to the money at a small profit and sold some 1150 CC for the 5th. If we hit 1150, I think it’ll be temporary and I’ll be able to buy back in.
Back to having a mostly cash position in my options/ trading portfolio waiting for a better opportunity
Back to having a mostly cash position in my options/ trading portfolio waiting for a better opportunity
Yeah, it's truly bonkers. This record very well could stand until the day Tesla pushes a truly mind-blowing release of FSD out to its fleet that leaves undeniable the fact that they've solved autonomy. Maybe the change will happen gradually enough that there wouldn't be a violent re-rating, or maybe not. I will try not to leave short call positions open before a new release of FSD if it can be helped.
Well, I just noticed that my usable margin (as limited by SMA) has gone through the roof... like up 20%. The question is, if the stock settles, will it go back down again? Oddly, in the limited SMA examples I've seen it doesn't appear to go down if the stock goes down, though if that's true then at some point of stock price decline the Maintenance Excess would become the limiting factor.
I don't know why they have to make these calculations so obscure.
Also, kind of funny @BornToFly warned of a 20% drop, and what was it, an hour later? $50 disappeared off the stock price just like that. I've closed all my put spreads for this week, and sold some but not a ton for next week; $100 spreads with good premiums and short legs $930-970. Needless to say I'm not really expecting a drop back under $1000 -- Hertz isn't going to cancel the deal -- but that kind of drop is certainly plausible. I don't mind handling the put spreads if needed, and I am still enough on the sidelines to take advantage of further drops. I guess we'll see.
I don't know why they have to make these calculations so obscure.
Also, kind of funny @BornToFly warned of a 20% drop, and what was it, an hour later? $50 disappeared off the stock price just like that. I've closed all my put spreads for this week, and sold some but not a ton for next week; $100 spreads with good premiums and short legs $930-970. Needless to say I'm not really expecting a drop back under $1000 -- Hertz isn't going to cancel the deal -- but that kind of drop is certainly plausible. I don't mind handling the put spreads if needed, and I am still enough on the sidelines to take advantage of further drops. I guess we'll see.
I got back on the horse. In the spirit of not being greedy in the future, I sold 1300/1350s for about $.5 each (I'm sure 1200/1250 would be safe for Friday, but I'm done being greedy).
I did some math on this awhile back. I found that I could do some fake rolls when the share price was roughly the mid point (I think it's precisely the mid point) then the available rolls were neutral - add 1 week and earn ~$0 credit with no change in the strike price. With bid/ask slippage there's probably a small loss at the mid point.
You can test this yourself. With the shares at 1050 pretend that you have a $100 wide spread and position it as a 1000/1100. Look up that net premium and then roll it out 1 week and see what you can get. You'll find that you're stuck with that -1000/+1100 call spread (or +1000/-1100 put spread) and a nearly 0 roll credit.
The closer to the short leg ATM when you roll, the better the available options.
As you approach the long leg then you'll be giving something up. If you keep the net credit then you'll 'pay' for that net credit by rolling to a worse short leg (and the long leg staying equidistant). Or you'll bring more capital into the trade via a wider spread. Or more capital via more total contracts (roll 100 contracts into 120 contracts for instance). Or you'll cut the spread size and use that to sell more contracts to keep the capital at risk constant while increasing the leverage (make money faster; lose money faster).
This 'roll for a better sale price' on covered calls is how I like to think about them. And its hard to complain about a $1050 sale price.
The one thing that I like to keep in mind is that on a big move like this its desirable to let some of those get assigned (which could be actual assignment, or it could be a BTC on the call along with a STC on the corresponding shares). Its a form of 'selling high'. Similarly if the shares were going down dramatically and you had short puts in place, at some point you'd want to take assignment on those puts as a form of 'buying low'.
Something to be aware of is chasing the share price via the put spreads TOO aggressively. An obvious question is what is TOO aggressive (I don't know). But this is how I got myself in deep with short puts at the start of the year. I did eventually roll most of those out for a profit but it took 5 months or something. This is one of the best ways I know of to get particularly deep into trouble, is to get into trouble on one side; and then following closely and aggressively to offset some of those losses, get caught by the reversal and swing a big loss in both directions. (Ask me how I know)
bkp_duke
Well-Known Member
FYI - little late to the party, but MM's filled in the call positions between 1000 and 1200 with increments of 10.
Might provide some people here with more flexiblity.
Might provide some people here with more flexiblity.
hertz BCS problem fixed with net zero $ loss
history and sequence
- opened IC x370 10/29 +p750/-p800/-c1000/+c1050
- hertz drama started
- rolled 10/29 +p750/-p800 to +p800/-p850 (credit to maximize the winning side)
- rolled 10/29 -c1000/+c1050 to 11/5 -c1020/+c1070 (zero credit but strike improved)
- opened 10/29 -c1100/+c1150 (credit)
- start of day 2; decided to shut down and remove all 10/29
- rolled 10/29 +p800/-p850 to 11/5 (credit and 20% away)
- rolled 10/29 -c1100/+c1150 to 11/5 (credit and 10% away)
- opened more 11/5 +p800/-p850 (credit and 20% away)
- opened 11/5 -c1300/+c1350 (credit and 30% away)
- closed 11/5 -c1020/+c1070 (zero out)
notes
- everything is Market Order; now is not the time to be cheap
- this rescue is all hands on deck, with all positions helping out to prevent portfolio blowing up
- although there is no actual $$$ lost, the real loss is zero income for this week; there's 3 days to catch up (or just do nothing while recovering from trauma
)I had rolled up BPS to 900/850 for Friday that I'm worried about. I don't want you to panic sell, but I would not bank on being over $1000 for Friday.Also, kind of funny @BornToFly warned of a 20% drop, and what was it, an hour later? $50 disappeared off the stock price just like that. I've closed all my put spreads for this week, and sold some but not a ton for next week; $100 spreads with good premiums and short legs $930-970. Needless to say I'm not really expecting a drop back under $1000 -- Hertz isn't going to cancel the deal -- but that kind of drop is certainly plausible. I don't mind handling the put spreads if needed, and I am still enough on the sidelines to take advantage of further drops. I guess we'll see.
corduroy
Active Member
I read through that 3x and still have no idea what you did. But congrats on $0 loss!hertz BCS problem fixed with net zero $ loss
history and sequence
- opened IC x370 10/29 +p750/-p800/-c1000/+c1050
- hertz drama started
- rolled 10/29 +p750/-p800 to +p800/-p850 (credit to maximize the winning side)
- rolled 10/29 -c1000/+c1050 to 11/5 -c1020/+c1070 (zero credit but strike improved)
- opened 10/29 -c1100/+c1150 (credit)
- start of day 2; decided to shut down and remove all 10/29
- rolled 10/29 +p800/-p850 to 11/5 (credit and 20% away)
- rolled 10/29 -c1100/+c1150 to 11/5 (credit and 10% away)
- opened more 11/5 +p800/-p850 (credit and 20% away)
- opened 11/5 -c1300/+c1350 (credit and 30% away)
- closed 11/5 -c1020/+c1070 (zero out)
notes
- everything is Market Order; now is not the time to be cheap
- this rescue is all hands on deck, with all positions helping out to prevent portfolio blowing up
- although there is no actual $$$ lost, the real loss is zero income for this week; there's 3 days to catch up (or just do nothing while recovering from trauma
That is really impressive. I name thee - "Master Yoda!!!" You have taken on more risk than I did (and aren't out of the woods yet - but looking good), but my panic closing has cost me over $2M. However, potential losses were $12M, so the "black swan" we had could have been much worse for me.hertz BCS problem fixed with net zero $ loss
history and sequence
- opened IC x370 10/29 +p750/-p800/-c1000/+c1050
- hertz drama started
- rolled 10/29 +p750/-p800 to +p800/-p850 (credit to maximize the winning side)
- rolled 10/29 -c1000/+c1050 to 11/5 -c1020/+c1070 (zero credit but strike improved)
- opened 10/29 -c1100/+c1150 (credit)
- start of day 2; decided to shut down and remove all 10/29
- rolled 10/29 +p800/-p850 to 11/5 (credit and 20% away)
- rolled 10/29 -c1100/+c1150 to 11/5 (credit and 10% away)
- opened more 11/5 +p800/-p850 (credit and 20% away)
- opened 11/5 -c1300/+c1350 (credit and 30% away)
- closed 11/5 -c1020/+c1070 (zero out)
notes
- everything is Market Order; now is not the time to be cheap
- this rescue is all hands on deck, with all positions helping out to prevent portfolio blowing up
- although there is no actual $$$ lost, the real loss is zero income for this week; there's 3 days to catch up (or just do nothing while recovering from trauma
dc_h
Active Member
Looking back on prior spikes, it does seem that on the 3rd day, there shall be a red candle, but who knows. Maybe we'll see a big drop back to "normal" today or just keep going. Personally I'd like to see us close at 1024 for the week, kind of goes with living in a simulation and would leave me ahead for the week.
After these sprints up, there is consolidation or reversal before resuming the upward trajectory, so indeed be ready for a big reversal to hit BPS positions. My straddles will work out pretty well anywhere from 950 to 1030 and really well from 990-1010. With IV up, looks like Thursday is a good day to roll or hang on til Friday to close.
Last week I opened 750/800 BPS for 10/29 which I still have
Yesterday opened 1100/1150 BCS for 10/29, these got too scary so I closed for a loss this morning, but I waited longer than I should
Near the peak today I sold a bunch of 10/29 1500 CC against all my shares and leaps and sold 1300/1350 BCS for 10/29 as well
Should I do nothing more I will have have recouped just over 50% of my loss which brings it to less than a typical week's income.
I've done some backtesting of various spread strategies and one thing that I think I've determined based on that and this experience is that it's better to just take early losses than to play the rolling game. Naked puts / covered calls, sure... roll away. But I think I will just close any spreads which hit 80-100% loss (relative to premium gained initially). Obviously you can get dinged by that in an annoying way if things dip briefly against you, but you can always re-open new positions to get it back. In the Evergrande debacle I ended up positive for that week doing exactly that. Had I done so this week I would be positive now as well.
Yesterday opened 1100/1150 BCS for 10/29, these got too scary so I closed for a loss this morning, but I waited longer than I should
Near the peak today I sold a bunch of 10/29 1500 CC against all my shares and leaps and sold 1300/1350 BCS for 10/29 as well
Should I do nothing more I will have have recouped just over 50% of my loss which brings it to less than a typical week's income.
I've done some backtesting of various spread strategies and one thing that I think I've determined based on that and this experience is that it's better to just take early losses than to play the rolling game. Naked puts / covered calls, sure... roll away. But I think I will just close any spreads which hit 80-100% loss (relative to premium gained initially). Obviously you can get dinged by that in an annoying way if things dip briefly against you, but you can always re-open new positions to get it back. In the Evergrande debacle I ended up positive for that week doing exactly that. Had I done so this week I would be positive now as well.
This is some of the best not advice! I really need to heed that. For most of the year I have been selling CCs in all my accounts for all my shares (except some cash was used for CSPs to form straddles in about 2:1 ratios). I felt that I could be that aggressive because it is in retirement accounts and I’ve got a long time before I need the money. Well, as they say, it works until it doesn’t (about 3 weeks ago). So now I must deal with the consequences, no options money “lost”, just real money lost because of selling shares before this unprecedented rocket rise. ROTH account is now all cash, and just rolled Monday’s -p950s (75% profit realized) to -p1010s & -p1040s (still this week) for ANOTHER 1.5-2%. Kind of “I dare you” puts to get back the shares. Similar roll in the regular IRA, but I still have some-c800s for 10/29 & 11/2 that I haven’t bought back or rolled (2:1 c
ratio in that account). I may eventually roll the calls again, but I really like selling ATM puts for 2%. FYI, the SP has already exceeded my $1000 target for when I was planning to buy a new MY for some family members and a new MS for myself (return those profits to Tesla). I just didn’t expect it until next year.As we were blasting up yesterday, I did not want to roll out a week and keep the same strikes. That is the problem with spreads vs straight call or puts. The increase price difference between the short and long legs compared to what the difference was when you opened the position is killer (and very different during a move on a Monday vs near market close on a Friday - which is where I had always looked when I was learning and planning - Oops).
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