Wiki Selling TSLA Options - Be the House

[adiggs]

Meanwhile my put spreads are so new that I'm not planning to do anything. But wait - maybe the are SO far OTM that I could roll a bit closer, keep the same expiration, and pick up some worthwhile incremental premium (and incremental risk). I'll put a little time into gaming out that idea to see if its worthwhile (I might do it for an incremental $1.50, but not .50).

Turns out I can take my 750/900s and roll into 850/1000s for nearly as large of a credit as my original position - about 3.50 added to the position net. See now I went and looked - I don't need that incremental credit, but I do think the 1000s are safe.

My current positions are ahead about 20%. I decided to enter an order for tomorrow looking for a ~40% profit and early close. My hypothesis is that trading tomorrow will look a lot like trading today. A massive opening spike (volume and high $ amount), a big drop, maybe (hopefully) even into the red and then the comeback. If it does go like this then I'll have a lovely re-entry by the time I wake up and I'll use the 850/1000s to reenter. I don't see myself growing more adventurous than that.

Of course it can take off and just keep going in which case I'll have exited much too soon, but there's always risks. I came up with the 40%, or $3 option premium, by way of thumb to the wind, the roundedness of doubling my current profit, and guesswork.


EDIT: Upon further review, and reading in the main thread just how far ahead Tesla is pre-market I decided to go for a 2.50 close instead . Now its time to get back to bed.

 

[elasalle]

Got a bit of margin mostly unused - almost half of value of stock
Any thoughts on using margin to buy more of underlying and negate some CCs rather than closing the CCs themselves?

 

[mongo]

Got a bit of margin mostly unused - almost half of value of stock
Any thoughts on using margin to buy more of underlying and negate some CCs rather than closing the CCs themselves?

What's the long term outlook ?
Buying back exposes you to further price change for (I assume) less cost, and is comparable to adding long versions of your CCs. If you didn't already have them outstanding, which would you do?

 

[OrthoSurg]

Back when I was operating, trying to trade was a real problem. I remember rushing into trades ten minutes after the market opened because I had to go scrub into a multi-hour surgery. Lost a fair amount of money because of that. I would definitely stick with positions that don't need to be managed very much, and don't rush into trades because you have to go operate.

I may not be the best advice right now for CCs, but I would not buy back your Nov call at this point (for a big loss). It is still OTM, and if it goes ITM, in won't be in so deep, so it will be easy to roll. The problem with the CCs I sold, is that they are two years out, so right now there is no possibility to roll them further out.

Already 2% up pre-market, as usual I would say.
so let’s say it gets ITM 2 weeks from expiration, what would be the best strategy to roll them away?
buy back the 1325 26/11 Put and sell the same strike price 1325 with 24/12 expiration wishing me a Christmas gift? or extend even further to wish for a pullback in the 1100$ some day like you are currently betting on?



just ready my previous post, I apologize for the many typos my french keyboard is correcting many words in French and some sentences are barely readable. Sometimes I proofread sometimes I don’t, depending on the day I had.

 

[MrMoo]

Where are you getting 1 day? I sold them 8 days ago, and I am not happy about going almost 100% negative in a week. It was definitely a mistake selling them in the first place. I was in a bad place after big losses on BCS on Oct 25th and wanted to immediately replace the money lost. Definitely need to be less emotional in the future.

Sorry my mistake. I somehow misread "last week" as yesterday.

As for what you did. Yes I think you did let emotion get the best of you. It can be very tempting to sell an option or roll an option further out just because the premium you get "Covers" what you lost instantly. The only problem is now you have this option lying around which you need to sort out.

What I found is best is keep a level head. Think logically about what you can do to fix this. Even buying them back and then selling far OTM weeklies and collecting pennies can slowly recover your position. It'll be slow and painful but may put you at ease.

 

[elasalle]

What's the long term outlook ?
Buying back exposes you to further price change for (I assume) less cost, and is comparable to adding long versions of your CCs. If you didn't already have them outstanding, which would you do?

Interesting question - thought about it

Outlook long term was Tesla will keep growing at 50% clip and EV tipping point is in just getting started - so 2.5K plus by 2025

Short term prices staring to look frothy

1. I want to close the CC along with underlying call after 11/12 so I get long term cap gains
2. 2 weeks and lot can happen

I am thinking rather than close what other options I have - rather than lose money in a lousy way with losses, maybe I can lose it in a way where I can try to de risk without closing

Thinking best might be to buy some short term far OTMs - and see what happens - thinking here being to fight fire with fire

 

[corduroy]

I never thought I would be here, but after a series of wrong moves, my IRA is in trouble. My mindset of "it can't possibly keep going up from here" has proven quite wrong.

My BCS, converted to LCCs now have problem 1070 short calls. The net difference between the LEAPs and short calls is +7 deltas. I don't have enough cash in the IRA to close for the loss. So I am considering:

1. Indefinitely roll out weekly for $5 credit or strike improvement. Hope that someday in the future the SP pulls back enough to close.
2. Sell shares to cover loss on buying back. This would reduce overall account deltas and future profits on SP rise.
3. Roll DITM LEAPs up and out to generate enough cash to buy back short calls and cover loss. For example, roll Jan 2023 $400s to Mar 2023 $600 would net enough to close short calls. This would reduce overall deltas about the same as selling shares.

Any opinions on these choices? Thanks for any input.

 

[Drezil]

I never thought I would be here, but after a series of wrong moves, my IRA is in trouble. My mindset of "it can't possibly keep going up from here" has proven quite wrong.

My BCS, converted to LCCs now have problem 1070 short calls. The net difference between the LEAPs and short calls is +7 deltas. I don't have enough cash in the IRA to close for the loss. So I am considering:

1. Indefinitely roll out weekly for $5 credit or strike improvement. Hope that someday in the future the SP pulls back enough to close.
2. Sell shares to cover loss on buying back. This would reduce overall account deltas and future profits on SP rise.
3. Roll DITM LEAPs up and out to generate enough cash to buy back short calls and cover loss. For example, roll Jan 2023 $400s to Mar 2023 $600 would net enough to close short calls. This would reduce overall deltas about the same as selling shares.

Any opinions on these choices? Thanks for any input.

I would do 3 and fast.

 

[Davidzhao365]

Any idea why there is no options expiring in Sep 23 and Dec 23?

 

[PastorDave]

Got a bit of margin mostly unused - almost half of value of stock
Any thoughts on using margin to buy more of underlying and negate some CCs rather than closing the CCs themselves?

You can use the margin to flip roll to a BPS one contract at a time. I started that process yesterday (I've got about 15 CC that I decided to roll instead of take a loss on from the run up), and it's working so far. Sold 5 x 11/5 1145p to cover 1 x 11/19 1180cc.

 

[MaxPain]

I never thought I would be here, but after a series of wrong moves, my IRA is in trouble. My mindset of "it can't possibly keep going up from here" has proven quite wrong.

My BCS, converted to LCCs now have problem 1070 short calls. The net difference between the LEAPs and short calls is +7 deltas. I don't have enough cash in the IRA to close for the loss. So I am considering:

1. Indefinitely roll out weekly for $5 credit or strike improvement. Hope that someday in the future the SP pulls back enough to close.
2. Sell shares to cover loss on buying back. This would reduce overall account deltas and future profits on SP rise.
3. Roll DITM LEAPs up and out to generate enough cash to buy back short calls and cover loss. For example, roll Jan 2023 $400s to Mar 2023 $600 would net enough to close short calls. This would reduce overall deltas about the same as selling shares.

Any opinions on these choices? Thanks for any input.

I'm in a similar situation in my Roth. I have 1050 and 1080 short calls and not enough cash to buy them back. I'm considering selling some shares to buy them back and then buying LEAPs to try to get back to the same delta.

 

[CHGolferJim]

I never thought I would be here, but after a series of wrong moves, my IRA is in trouble. My mindset of "it can't possibly keep going up from here" has proven quite wrong.

My BCS, converted to LCCs now have problem 1070 short calls. The net difference between the LEAPs and short calls is +7 deltas. I don't have enough cash in the IRA to close for the loss. So I am considering:

1. Indefinitely roll out weekly for $5 credit or strike improvement. Hope that someday in the future the SP pulls back enough to close.
2. Sell shares to cover loss on buying back. This would reduce overall account deltas and future profits on SP rise.
3. Roll DITM LEAPs up and out to generate enough cash to buy back short calls and cover loss. For example, roll Jan 2023 $400s to Mar 2023 $600 would net enough to close short calls. This would reduce overall deltas about the same as selling shares.

Any opinions on these choices? Thanks for any input.

If my October tracking of daily values of a variety of long-term calls is representative, and it is my conclusion that it is, then #3 also contains the advantage of shifting into LEAPs that will have higher returns going forwards than what you are in now. Do your own due diligence. I’m close to pulling the trigger on a ladder of 1/3 15%-20% ITM, 1/3 ATM and 1/3 15%-20% OTM — I’m just trying to decide whether to proceed or try to time things a bit by closing what I have now and opening the new items on a possible dip. There is a fair amount of discussion about shares/LEAPs in recent weeks in the two main investment threads.

See PastorDave’s response below which summarizes most of the underlying rationale.

 

[AquaY]

I never thought I would be here, but after a series of wrong moves, my IRA is in trouble. My mindset of "it can't possibly keep going up from here" has proven quite wrong.

My BCS, converted to LCCs now have problem 1070 short calls. The net difference between the LEAPs and short calls is +7 deltas. I don't have enough cash in the IRA to close for the loss. So I am considering:

1. Indefinitely roll out weekly for $5 credit or strike improvement. Hope that someday in the future the SP pulls back enough to close.
2. Sell shares to cover loss on buying back. This would reduce overall account deltas and future profits on SP rise.
3. Roll DITM LEAPs up and out to generate enough cash to buy back short calls and cover loss. For example, roll Jan 2023 $400s to Mar 2023 $600 would net enough to close short calls. This would reduce overall deltas about the same as selling shares.

Any opinions on these choices? Thanks for any input.

I would do #3

 

[elasalle]

You can use the margin to flip roll to a BPS one contract at a time. I started that process yesterday (I've got about 15 CC that I decided to roll instead of take a loss on from the run up), and it's working so far. Sold 5 x 11/5 1145p to cover 1 x 11/19 1180cc.

thanks.
If there is a price reversal, will the losses on the BPS be the same as the gain back on the CC?

 

[PastorDave]

I never thought I would be here, but after a series of wrong moves, my IRA is in trouble. My mindset of "it can't possibly keep going up from here" has proven quite wrong.

My BCS, converted to LCCs now have problem 1070 short calls. The net difference between the LEAPs and short calls is +7 deltas. I don't have enough cash in the IRA to close for the loss. So I am considering:

1. Indefinitely roll out weekly for $5 credit or strike improvement. Hope that someday in the future the SP pulls back enough to close.
2. Sell shares to cover loss on buying back. This would reduce overall account deltas and future profits on SP rise.
3. Roll DITM LEAPs up and out to generate enough cash to buy back short calls and cover loss. For example, roll Jan 2023 $400s to Mar 2023 $600 would net enough to close short calls. This would reduce overall deltas about the same as selling shares.

Any opinions on these choices? Thanks for any input.

There is zero reason not to roll your DITM LEAPs up, as they're already 1 delta. I'd roll them up to about .9 delta (same date is fine) and use some of the proceeds to increase your # of LEAPs so that you maintain the same delta, and use the rest to do whatever you think would best recover your position. IMO, you're wasting capital at 400, and your delta exposure won't grow as the the SP rises. Not-advice.

 

[vwman111]

You can use the margin to flip roll to a BPS one contract at a time. I started that process yesterday (I've got about 15 CC that I decided to roll instead of take a loss on from the run up), and it's working so far. Sold 5 x 11/5 1145p to cover 1 x 11/19 1180cc.

That would consume a large amount of margin? which may not be possible for all. Or am i missing something?

 

[PastorDave]

thanks.
If there is a price reversal, will the losses on the BPS be the same as the gain back on the CC?

It's a naked put position, so I'd just roll it if the price reversed. And then my other short calls would be in better shape at least. I'm planning to close it this morning for almost full value (I hope).

 

[traxila]

I have a 1700/1800 DEC 3 Bear Call Spread I opened during the first surge to 1200 this week.

Am closing it first thing and AM and taking my lumps, which should be about 50% of intended profit. Maybe .

I think any bearish trades at all are not wise until SP hits obvious wall. This may well be 2000 and coming up before the EOY. Action is absolutely nuts. I got 1400, 1500, 1600 and 1700 CCs expiring in friggin 13 trading hours (NOV 5) and I am underwater on all of them as if the market is telling me they will all be ITM. Has Elon already released the robots?

Hopefully my posting this means imminent reversal to help out all the peeps here experiencing difficulties.

 

[Right_Said_Fred]

Any idea why there is no options expiring in Sep 23 and Dec 23?

Those dates are still too far out. They will appear next year.

 

[CHGolferJim]

I have a 1700/1800 DEC 3 Bear Call Spread I opened during the first surge to 1200 this week.

Am closing it first thing and AM and taking my lumps, which should be about 50% of intended profit. Maybe .

I think any bearish trades at all are not wise until SP hits obvious wall. This may well be 2000 and coming up before the EOY. Action is absolutely nuts. I got 1400, 1500, 1600 and 1700 CCs expiring in friggin 13 trading hours (NOV 5) and I am underwater on all of them as if the market is telling me they will all be ITM. Has Elon already released the robots?

Hopefully my posting this means imminent reversal to help out all the peeps here experiencing difficulties.

Be patient with those CCs………not advise.