We'll live, as long as people in the main thread don't get wind of this debacle.
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Wiki Selling TSLA Options - Be the House
- Thread starter adiggs
- Start date
Slightly OT.
I have FSD beta 10.3.1 and it is already really good. Drives with clear lane markings and signs are usually fine with literally zero disengagements.
The future is here imo. It is obviously not very polished yet for unprotected turns, stop signs and yield signs but this will get better over time, no doubt in my mind.
Happy trading!
I have FSD beta 10.3.1 and it is already really good. Drives with clear lane markings and signs are usually fine with literally zero disengagements.
The future is here imo. It is obviously not very polished yet for unprotected turns, stop signs and yield signs but this will get better over time, no doubt in my mind.
Happy trading!
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I was thinking we had to be the butt of some jokes over there this morning. Haven't dipped in to see.
I rolled a batch of 1000/1050 BCS to 1000/1060 for a $4.1 credit. Realize not the usual roll for a strike improvement, and I may getting a little greedy/opportunistic on calling this a top.
The daily chart really looks like the blow off has formed and the hourly charts were firing a lot of trend reversals today.
Grateful I had enough margin capacity to do that. A younger self would have been playing full tilt margin and would have been royally up the creek this week.
Still have 1100/1150 BCS and 820/770 BPS riding out this week. All CCs are in to next week and DITM. We shall see how much of a pull back we get if any!
Definitely learning that I don’t enjoy managing BCS at all, whereas I seem unphased by the prospect of indefinitely rolling CCs. Human brains are a weird thing.
The daily chart really looks like the blow off has formed and the hourly charts were firing a lot of trend reversals today.
Grateful I had enough margin capacity to do that. A younger self would have been playing full tilt margin and would have been royally up the creek this week.
Still have 1100/1150 BCS and 820/770 BPS riding out this week. All CCs are in to next week and DITM. We shall see how much of a pull back we get if any!
Definitely learning that I don’t enjoy managing BCS at all, whereas I seem unphased by the prospect of indefinitely rolling CCs. Human brains are a weird thing.
AquaY
Member
Less of a hit then if he put in a limit order to buy because of the premium.
Using your scenario if he sells a put for 11/26 with strike of 850 at closing prices today he'd get a premium of about $13.50
So his cost would be 837.50 . That means he would be under water by $$37.50 instead of under water $50.
Now, how likely is your scenario?
Going by IV today the probability of the stock dropping to 800 by 11/26 is 9.76%.
So your scenario has less of a 10% probability of occurring and if it does his loss is less than buying via a limit order.
Now, what's the probability of the stock dropping to the strike of $850 by that time? About 17%. So he has an 83% chance of making the premium of $13.50. That's a much greater strategy than waiting at the sidelines to buy the stock at $850
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Out of curiosity I priced out 100x 10/29 BPS -880/+820 and it said I could get $6400.
I mean I hope it doesn't drop below 880 by Friday but who knows. I'll take $6400 for 3 days work.
I mean I hope it doesn't drop below 880 by Friday but who knows. I'll take $6400 for 3 days work.
AquaY
Member
I'm up over $ ( lets say enough to buy 1 of each tesla vehicle model and then some) since I started trading TSLA options in March.
They can laugh at me all the way to the bank
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Conversely I have it as well and it doesn’t do much well at all apart from driving in a straight line. But I agree it will get there
Update for today:
Rolled half my 1100/1150 bcs as we were climbing past 1090. When I don't have full confidence to go all in, sometimes I'll go halfsies. Rolled to 1250/1300 for 11/5 for small but decent credit. Got caught up with work and I saw we spiked down bigly. the 1250/1300 bps were nicely green and the 1100/1150 were less red. I waited through the rest of day, wondering how much to test my luck. With five minutes before close, I decided to close out both sets of BCS, essentially net even on my BCS plays from yesterday. I was weighing the pros/cons of my desire to "win" for the week from my losing BCS positions, and in the end, decided that breaking even was a "win" enough for me.
Kept the 845/895 and 810/860 bps going. Will give those another day or so. Premium just won't die on those. Closed the 745/795. Trying to free up some cash for the rest of the week, if the opportunity presents.
A number of my ITM leaps in 401k "luckily" sold to close at the peak, with limit sell orders I had set as "reach" numbers from months ago. With the spike up to 1090 today, I now have extra cash in the account to allow for more rolls of the 900cc. Although, now I wonder if I should buy more leaps.
All in all, so far I'm looking at 1-2% profit this week from the capital I have at risk (I'm not using margin). The 1100/1150 BCSs probably would've worked out, but my crystal ball definitely wasn't working well this week. Work has been busy and not sure I can baby them this week.
Again, thanks to all for sharing how they manage their ups and downs. I hope my experiences are helpful to the community.
If you ever decide to become a Youtuber/Twitch and livestream trades like these, I'll subscribe. This was so much fun to read. Lol.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'm with you. I've done the math on buy and hold vs. options trading for myself. Here's how it shakes out as of today:
Returns if I had bought and hold: ~17x
Returns with options trading: 135x (and that's taking some serious lumps along the way!)
I now make, in income from options trading, approximately the size of my initial investment in TSLA - every week! (Except for weeks like this week, when I lose the size of my initial investment in TSLA!)
AquaY
Member
Shhhh. I made them up
J/k
Simply using the IV probability of selling puts at 850 and 800 using the current pricing in my E*TRADE options screens and taking the reciprocal of that probability.
At the time there was an IV probability of max profit of selling an 800 put of 90.24 %. and a max profit probability of selling an 850 put of about 83% for that expiration date. That would indicate the probabilities of the SP being below those strikes at expiration were the numbers I posted since max profit is the premiums received if the options expire worthless.
I just ran it again and it's changed by .03% to 90.27% from 90.24% for the 800 strike
Attachments
and that's why this week's ruinvesting is nothing - we have some money, we have good looks, and we eat losses for breakfast
At this point you can replace the word NEWBIE by EXPERT under your avatar.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
Amazing
Tell me if what I am thinking of doing makes sense
I had 75 BCS -c1100/+c1200 for 10/29 this am which were in trouble as the stock spiked. I panicked a little, and rolled them out to -C1150/+c1200 for 11/12 at the worst possible time when the stock was at its peak at a debit. I realized later that I should have been rolling up the +c1200 to 1250 or higher, but didnt think it through at that time.
Anyways, later when the stock dropped, I closed out the -C1150 for a small loss.
Now I still have 75 +c1200 for 11/12 which are showing a big loss as the stock dropped further after that. If I simply close them out tomorrow, I will probably have a large loss enough to wipe out last few weeks of gains.
So I am thinking to converting this to a call debit spread. I have already spent the money on purchasing the +c1200, why not add short calls at -c1250 or so? I entered the numbers in Fidelity margin calculator and it does not seem to affect my margin as I already have the long calls.
Is there a better strategy to try? I am only trying to minimize my losses on the long calls at this point.
I had 75 BCS -c1100/+c1200 for 10/29 this am which were in trouble as the stock spiked. I panicked a little, and rolled them out to -C1150/+c1200 for 11/12 at the worst possible time when the stock was at its peak at a debit. I realized later that I should have been rolling up the +c1200 to 1250 or higher, but didnt think it through at that time.
Anyways, later when the stock dropped, I closed out the -C1150 for a small loss.
Now I still have 75 +c1200 for 11/12 which are showing a big loss as the stock dropped further after that. If I simply close them out tomorrow, I will probably have a large loss enough to wipe out last few weeks of gains.
So I am thinking to converting this to a call debit spread. I have already spent the money on purchasing the +c1200, why not add short calls at -c1250 or so? I entered the numbers in Fidelity margin calculator and it does not seem to affect my margin as I already have the long calls.
Is there a better strategy to try? I am only trying to minimize my losses on the long calls at this point.
I am trying to figure out a recovery plan and how to improve my strategy. So far I am thinking about selling aggressive CC since I am ok with losing my shares above $1000 and I can just do the wheel in my pretax accounts until I feel the stock is about to take off again. I am planning on reducing the amount of cash that I use for spread and do not increase it after profitable weeks since I am just trying to generate income and I am not in the accumulation phase anymore. Will the stock get more volatile? 10% OTM was working fine for a while but I wonder if should go 15% OTM until the stock settles. I am also going to split my trades in at least two days and reduce the number of accounts in which I trade spreads because it makes it difficult; what to do with unused cash on other accounts? I am also going to try to not let losses go to more than two weeks of the typical premium collected and close the trade when that happens..... this depends on how many days I have to expiration. Any thoughts?
InTheShadows
Active Member
This is actually the best way to start out. However starting out doing this on tsla is tough because now you need $100k just to do one. Well maybe $90k if you want to sell 100 OTM.
Saw this opinion article on how the spike was caused by gamma squeeze, which I understand. I don't understand what they are trying to say about Friday though. Are they saying that market makers can start selling some of the shares they had to buy Monday? If so, I see that as downward pressure the rest of the week. Here is the confusing part:
To Kochuba at SpotGamma, while Monday’s options activity helped push the stock higher, the boost is getting shaky. For one, the cost of options has become more expensive. Plus, more than 30% of dealers’ gamma exposure is expected to drop off upon Friday’s expiration, meaning hedges will be forced to adjust quickly in coming days.
“I believe that creates a vacuum for higher but unstable stock prices,” he said.
To Kochuba at SpotGamma, while Monday’s options activity helped push the stock higher, the boost is getting shaky. For one, the cost of options has become more expensive. Plus, more than 30% of dealers’ gamma exposure is expected to drop off upon Friday’s expiration, meaning hedges will be forced to adjust quickly in coming days.
“I believe that creates a vacuum for higher but unstable stock prices,” he said.
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