Hypothetically, I would be patient, hope for a dip, sell safe BPS to hoard cash and manage the LEAPS as and when you can. So, 3.
Easy for me to write, since my account size is probably an order of magnitude smaller than yours.... Good luck!
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Wiki Selling TSLA Options - Be the House
- Thread starter adiggs
- Start date
Hypothetically, I would be patient, hope for a dip, sell safe BPS to hoard cash and manage the LEAPS as and when you can. So, 3.
Easy for me to write, since my account size is probably an order of magnitude smaller than yours.... Good luck!
Knightshade
Well-Known Member
same not-advice... there's always SOME pullback somewhere... and time decay will be happening while you wait to help (though only a tiny bit on '24s right now)
⚡️ELECTROMAN⚡️
Village Idiot
So if I sell a covered call right now for a 1200 strike, 11/05 exp, they give me $1,170? Is that right? That just seems like too easy of money to me.
BrownOuttaSpec
Active Member
Did you not see the stock price this week?
Unless it goes above 1211.70 next week...
bkp_duke
Well-Known Member
Time is on your side right now. Both the SP and IV are up this week. A pull back on either could really help the price of those calls. My "not advice" is #3, and look for an opportunity to close the position when it is profitable. I was in a similar position with AMD earlier this year and had to wait 5 months for a favorable SP move for my position to go positive. You sound like me, a "fix it" person, and sometimes the hardest thing is to do nothing.
The call buyers (hedge funds, high rollers and WSB crowd) are trying to force a gamma squeeze.
Still too risky for me, stock could shoot up quick as demonstrated this week
mickificki
Member
Exited my CC1300 strike 11/5 for a slight gain at opening. I feel like I left $ on the table but just couldn’t bear the thought of the stock running away next week. Waiting for it to settle…
⚡️ELECTROMAN⚡️
Village Idiot
That seems highly unlikely. But if it starts getting close to the strike price, can I buy to close? Will it just cost me significantly more than the premium I just received? Or is there a better strategy to minimize losses?
It would be great if this could be put into a poll. I think almost all of us are dealing with the same fundamental question. Will the stock ever come back down below 1000? The unrelenting stock price movement hasn't given many of us a chance to catch our breath and reposition. The thought of the stock never going below 1000 again is not rational. Stocks don't go up forever in a straight line. However the fear of the stock never going below 1000 is a real fear that many of us share as we count out potential losses, whether they be real or missed opportunity on the continued climb.
jeewee3000
Active Member
Definitely not option 1. Just how you are wording it shows that you are (too) emotional about this trade, which drives the rationality out of your system.
The old "the SP is never coming back down..." has been stated so many times and rarely is it true. As a matter of fact, only two times in TSLA's history we had such events -> the 2013 rally and the 2020 rally.
The chances of revisiting the previous ATH ($900) before shooting back up to the moon is much greater than us never going back below $1000 again.
I could of course be wrong, but since the 2020 rally is quite fresh I don't think there are enough catalysts right now to reach $2000 as I've read here and there. If we were to reach $2000 this would only be possible in the short term as part of a squeeze, implying the stock price would crash back down again afterwards.
I understand your sentiment, I truly do (holding sold $1150 calls for Nov/26 and they make me uneasy), but my rational side tells me the stock will cool off before we go +$1200. I plan to convert my sold $1150's into a BPS upon the first dip back to around $1000.
Time is your friend. Relax. Breathe. And think about this before acting rash (cough option 1 cough).
IV must be going up. I had orders placed for BPS 900/700 Nov 5 for $5 this morning. Thought I missed the boat when the price shot up. Took the dog out, and got back home tk see it just filled even though the sp is way up.
Yes. I feel the pain as well. I sold 20 950cc last Friday thinking that the worst case we'd have a wall at 1000.
At this point I've just rolled them to next Friday at the same 950 strike and waiting for that one down day to roll to a better strike. But at this point in time it looks like we'll never catch our breath. It's hard to just wait sometimes.
Certainly learned a lot this past week.
DurandalAI
Member
I used to have 700 shares of Tesla pre-split. That's 3,500 post split. I sold covered calls to make extra income, and buy extra shares... Eventually I couldn't roll my covered calls far enough out into the future to cover them all, and lost shares. I never lost money. I've made $250,000 on an initial $60,000 investment. Yep, I've been the house, making that consistent income...
What did I lose? Let's see.. 3,500 * $1,088 = $3,808,00 - $250,000 = $3,558,000 in potential gains lost.
I played it safe, I played the house as it were, and as a result I missed out on $3.5 MILLION!
I'm back on dice.com and linkedin looking for jobs in the IT field where I was working previously. I seriously messed up, I could have a larger home that fits all my things and a Plaid Model S to boot, doing a bunch of nothing but fun, and instead I'm job hunting with a big gap in my employment that it seems is holding me back from being employed...
Too smart for my own good, and I should have just HODL? I'll go crawl back into my hole, and try not to vomit when I think about what I could have had.
What did I lose? Let's see.. 3,500 * $1,088 = $3,808,00 - $250,000 = $3,558,000 in potential gains lost.
I played it safe, I played the house as it were, and as a result I missed out on $3.5 MILLION!
I'm back on dice.com and linkedin looking for jobs in the IT field where I was working previously. I seriously messed up, I could have a larger home that fits all my things and a Plaid Model S to boot, doing a bunch of nothing but fun, and instead I'm job hunting with a big gap in my employment that it seems is holding me back from being employed...
Too smart for my own good, and I should have just HODL? I'll go crawl back into my hole, and try not to vomit when I think about what I could have had.
I'd pick 3 and think of it as a hedge against the market crashing (which it probably will before 2024, right?). Also, you can always roll those out and up once we get closer to 2024. If one bad trade wiped out of my cash, I'd say that I'm not leaving enough cushion in my account for repair and rebuild. I'm typically only trading with 25%-30% of my total account value and plenty of cash in reserve. Then again, I'm trading with riskier positions that don't hurt very badly if they go against me.
I've closed out my BPS for this week at 98% profit and opened BPS for next week. I slightly laddered the positions at 960/990, 980/960, 960/930. IV rose after I'd opened them so some are a little under water but should come good into next week with the amount of buying pressure we're seeing. I'll look to add BCS to turn these into IC's once the range for next week is clearer.
If you have the cash, you can buy it back at a potential loss (time vs SP rise). Initally, its time value grows, if it goes ITM, you start missing out on the SP rise too. I had 885s for this week I bought back later than I (retrospectively) should have.
Options profit calculator is great for running senarios.
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