Closed all my BPS for this week and opened 1050/850 for next week. Rolled my underwater 1090c to 1115c for next week. If not for my ccs I would not be as aggressive with my BPS as I see it as one side wins.
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Wiki Selling TSLA Options - Be the House
- Thread starter adiggs
- Start date
I'm not quite as brave. Now that we know the Tuesday drop was a head fake, I rolled to 11/12. 700/900 and 1725/1925
I am not sure when I can be less conservative, I only do BPS -780/+680 & -750/+650 for around $1-$1.5 premium.
I also put a Buy to Close Stop Loss on my 1725 @3 for a single contract, just so I get an alert on my Phone that those Calls are around 100% loss. Then I can log in and decide what to do with the rest. They might jump up to $3 if the SP jumps just a few percent and my contracts are still WAY OTM, so this is just an experiment (I don't want to buy them all back at a loss if I'm still feeling safe).
It sure can't keep SHOOTING up. It can definitely keep going up given the demand for shares by institutions. If you look back at Q4 2019, the stock hardly took any breather except the sell off post Cybertruck reveal. I do think we are going to go sideway and up from here, given today's action but I've been wrong before (thrice within this last week actually). I'm going to sell super OTM puts and calls and wait for the stock to give a clearer signal. Trying to time it is dangerous at this point.
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People don't call us degenerate gamblers for nothing, you know?
IV must have jumped. I’m still learning when to roll puts, and did some yesterday, which I definitely now know was too early and ended up paying too much for the BTC. The closed puts (1040s-1100s) lost a couple $ more overnight while the STO puts for next week actually gained (or lost less $ value that the BTC puts). I suppose that’s why patience is a virtue or maybe why it’s called “roll Thursday.”
The reason for the early put rolling was that I needed to temporarily release the cash covering so that I could roll out my remaining 11/12 -c805s to 11/19 -c810s. These CCs are so dITM that they risk early exercise, so I’m trying to keep rolling a week early. This is one of those “learning” experiences that @adiggs has expounded on in the past and others have even modeled. Unfortunately, this time it’s different and I don’t think rolling will work as well because these are so far dITM that only $5/wk rolling credit (or strike improvement) is available. Unfortunately, I just checked MaxPain and rolling $805 puts will actually bring in LESS premium.
I continue to do the CC rolling because it’s really just an experiment to see if rolling indefinitely is actually possible. Given the Tesla’s continued future growth and profitability, I doubt they will ever expire worthless. As a thought experiment, $5/wk x 50 wk = $250/yr strike improvement. Ok, so then by Dec 2022, I somehow manage to reach $1060-$1100 strike. By Dec 2023 I reach $1300-$1400. You see the problem here, this is not “falling off the wheel,” it’s running on top of it, while it’s going downhill.
So, more confirmation that options traders must stay in contact (near) ATM otherwise risk falling off the wheel. After losing CC shares on the run up, I have managed to sell N-1 puts at close to ATM, but I’m still making much less than the week SP rise ($20-$30 vs $100). If I was to sell N puts, the premium would be even lower. Unfortunately, my losses in just a few weeks have likely wiped out all of my yearly options gains.
I am thinking something similar, in general, would it be better to sell super OTM BPS / BCS (eg. around 30-40% OTM from each side) and tighten the range next week after we see a better direction?
If you open now, with the share price at $1235ish, you can get a higher premium than waiting until Monday if you think the stock price will be higher. It certainly feels like $1,500 is in play for next Friday 11/12. If this is the case, better to sell now than wait as the stock price keeps marching higher.
JusRelax
Active Member
Considering IV is pretty high right now, what do you guys think about creating some long-term put-spreads with about 20-30% of your margin (let's say 100 point spread, so like 900-1000)?
Also, is it possible to write weekly call spreads against those put spreads, making them like mini weekly iron condors?
Also, is it possible to write weekly call spreads against those put spreads, making them like mini weekly iron condors?
Just sayin' that I got $4.5 for the 800/900's on Tuesday
When you are more willing to lose a lot money....
In my mom's IRA, where I really don't want to lose money, I have 850/600 for next week now. I figure that even if the SP drops to 800, I can manage/roll that no problem.
BrownOuttaSpec
Active Member
That free Theta (time) decay over the weekend. Yes, big news could break over the weekend but time (Theta) is 100% guaranteed going to happen.
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You look smart now, but if the SP had kept dropping yesterday and today instead of rebounding, we would have looked like geniuses.Just sayin' that I got $4.5 for the 800/900's on Tuesday
I'm fully transitioned from this week to next week's BPS. Kept all of the short legs below 1000 for next week - felt safe enough for me and there was plenty of premium for me without going higher. Still not dipping much into the call side - have a few cc'd still to close out this week that are being stubborn. Might re-open that play for next week once i get these closed out (1425s)
I understand the BPS part since likely the price next monday will be higher, but why BCS now? If we assume next Monday SP will be higher (eg. 1300), then it would get a higher premium to open next week (assuming IV is same as today)
jeewee3000
Active Member
Will be interesting to see if we bounce of the $1240 level for a second time today. If so I'm quite confident tomorrow's close will be within $1150-1250 range.
To add to previous posts: I really don't see $1500 in play for next Friday. That's +20% from here. Spiking maybe, but not settling there.
(Not advice of course, I'm positioned for swings in either direction)
To add to previous posts: I really don't see $1500 in play for next Friday. That's +20% from here. Spiking maybe, but not settling there.
(Not advice of course, I'm positioned for swings in either direction)
Some institutions will start to trim before we hit $1500. I think we're running out of steam.
Don't know very many who are selling Calls now. If you sell Calls high enough (Like $1700s) then the Theta Decay can offset any Monday spike since you have those four extra days of decay. Though, I'm not selling any Calls until next Wednesday at the earliest.
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