Wiki Selling TSLA Options - Be the House

[Tslynk67]

I had never realized the amount of negative comments towards people selling options in the main investor threads before starting to sell options. I realized some people there think there is the good side « long stock holder » and the dark side « option traders ». I am starting to dislike more and more the main investor threads.

I wrote a long post on response, then realised I didn't want this place to become a mess like the main thread, to be brief, there's no "best approach" only what works for each individual and their circumstances, don't worry too much about the hodlier than thou crowd

 

[BornToFly]

I'm torn about rolling my 900/700 to next week. Premium is good enough for me @ $5. But 900 is 12% OTM, and I want to be closer to 20%. That being said, 900 should be close to the floor (I think 850 is the real floor)....

I decided to solve the dilemma by rolling half of them. Will wait and see on the other half for another day or two. Maybe by then 900 will be 20% out of the money....

 

[mickificki]

Hmm, have we reached the bottom? Up 3%. Doesn't make sense with Elon still selling 9-10mil more shares...

 

[MXWing]

I'm not at Fidelity, but I believe every broker will deal with this the same way: itm short option will be assigned, and your long option will expire if you don't specifically exercise it. After all, a long put option gives you the right to sell 100 shares at strike price, but no obligation.

Or they might liquidate the short options if you don't have enough margin to buy the shares put to you. That's what IBKR would do.

You be have to be careful of ITM long puts. If you have shares, long puts will sell them. If you don't have shares, long puts ITM will sell SHORT. LOL

Do you guys tend to BTC really far OTM puts the last day when they are +99% or you let them expire worthless in your account. My brockerage platform has glitches where the price of a 12/11 1250 Covered call goes from $0.01 to $8.55 after the option expired worthless and it is still impacting my margin. I’m thinking of BTC all my Puts and Covered calls on fridays at expiration to avoid these options floating in my account for couple days even the week after. Do you systematically BTC all your positions?

I don't leave options to chance. Buying early probably cost me $5000 over an entire year but I have to do it just for security and position management.

Is it the the side taking, or the sidebar conversations that aren't TSLA "investment" related that keep occurring? I like some of the content from the main investor thread (my source of immediate news), but I'm not learning much there. This thread is much more informative to me. I also think they're probably of the view that those of us trading options are not long-term believers in the company (which is probably incorrect). I hold 20x the long equity position vs the small size of cash for options trades I'm doing for my parents.

Some people in the main thread do not care about option traders. Nothing would make them happier than Elon going on a tweeting spree for a week and wipe out the accounts of everyone here.

Weird energy but whatever. Just play our game and key phrase is RISK MANAGEMENT.

Theta gang wins 90% of the time, but that 10% can really really hurt.

Stay safe out there.

 

[TDog]

I took yesterday as an opportunity to close out some covered calls that got DITM after the hertz announcement. I had to sell 8% of core shares (tax-deffered account) to do so and it hurt. But I think I can make it back more easily with either selling new CCs (going to wait for Elon's share selling to be over) or converting some shares to LEAPs instead of rolling the DITM CC for what looked like could be years.

 

[Right_Said_Fred]

Sold -1105/+1205 BCS for this friday for $5.
Premium was good and I believe price will be depressed for the rest of this week.

I hope this is going to age well for you, but with SP going from 1025 to 1055 in half an hour this position could be in some trouble. Since last week I've been short 5 c1250, 5 c1350 and 5 c1450 for 11/26, but I'm not 100% confident about the first one.

 

[st_lopes]

Hmm, have we reached the bottom? Up 3%. Doesn't make sense with Elon still selling 9-10mil more shares...

Beware of bull traps and dead cat bounces. Advice.

 

[BornToFly]

I hope this is going to age well for you, but with SP going from 1025 to 1055 in half an hour this position could be in some trouble. Since last week I've been short 5 c1250, 5 c1350 and 5 c1450 for 11/26, but I'm not 100% confident about the first one.

For next week I've started selling BCS to complete some ICs. 1300/1500 and 1350/1550 so far. If the SP keeps climbing my next set will be 1400/1600. Slow and steady doesn't win on the bike, but I think it wins here. Taking big losses every couple months, or having to roll with no income for a month, is probably worse in the end than a steady 1-2% ROI every single week by staying 20-30% OTM with wide spreads.

 

[OrthoSurg]

Interesting reversal. BTC all my put contracts I had opened yesterday for a 75% profit overall.
I don’t know if I should STO more call contracts. Is it going higher

 

[samppa]

Sold -1105/+1205 BCS for this friday for $5.
Premium was good and I believe price will be depressed for the rest of this week.

And were up to 1050 now.. getting a bit worried.
If the premium for this spread hits $10, I will probably buy it back at 100% loss.

 

[corduroy]

With this SP move, I'm now closed out of all my positions. I've had continuous options running for probably a year, so it's very strange to see my account bare!

I'll still be watching closely (but stress free) and waiting to get back in, either on another big drop or pop when Elon finishes selling. I'll also be looking to get back into ICs if we have a more stable trading channel.

 

[ammulder]

Hmm, have we reached the bottom? Up 3%. Doesn't make sense with Elon still selling 9-10mil more shares...

Thankfully this was enough to trigger one of my standing roll orders. 960-1060 just went out a week for $6. If we keep this up hopefully I’ll catch some more good rolls… though if selling holds us down the rest of the week I may need to use that cash on some debit rolls. Bottom line since I’m stuck with OTM put spreads but I believe the stock price is headed up again in the next month or two, I just want to roll opportunistically. This was a good one!

Sadly, I’ve learned that I don’t react well enough to big drops out of left field… the Evergrande one went well enough but this Elon sale didn‘t. Looking forward to recovering these positions and then restarting farther OTM.

 

[UltradoomY]

Closed out $940 P's this morning on the pop at 85% - STO Friday at $13, BTC today at $2.20
Not bad for 2 days, I am never stuck on a percentage of closing or getting everything out of them. Doing this as income replacement for my wife who retired recently and feel much safer with straight puts than a spread.
I am making more than she was as a Nurse Practitioner every week than she was making (gross + benefits) every 2 weeks.
Definitely can sit out for a week or 2 and have done so, but great prices on Puts makes it hard to stay away.

Will be looking to open next weeks Puts later today or tomorrow on a pushdown for hopefully the same credit ($13 ish per contract)

Also for those that are keeping tabs (mentally) on my $1200 puts from 2 weeks ago - I rolled them again for extra time and premium yesterday on the dip -
Out to 12/03 for an additional $40! Same strike at $1200.
My goal with these as an experiment was to keep rolling the same strike out and collecting as much premium as possible for a deep ITM position and so far I have collected just under $210 each contract in premium, effectively making my cost basis $990 if they get assigned (I have the cash).
Maybe with another roll I will just let them assign and keep the shares costed below $950 and wheel them aggressively with ITM CC's to see how that goes.

This has created a good learning situation for me having deep ITM contracts and still making money with them to allow for much more flexibility in my approach should things go against me.


Cheers!

 

[Cherry Wine]

Closed out $940 P's this morning on the pop at 85% - STO Friday at $13, BTC today at $2.20
Not bad for 2 days, I am never stuck on a percentage of closing or getting everything out of them. Doing this as income replacement for my wife who retired recently and feel much safer with straight puts than a spread.
I am making more than she was as a Nurse Practitioner every week than she was making (gross + benefits) every 2 weeks.
Definitely can sit out for a week or 2 and have done so, but great prices on Puts makes it hard to stay away.

Will be looking to open next weeks Puts later today or tomorrow on a pushdown for hopefully the same credit ($13 ish per contract)

Also for those that are keeping tabs (mentally) on my $1200 puts from 2 weeks ago - I rolled them again for extra time and premium yesterday on the dip -
Out to 12/03 for an additional $40! Same strike at $1200.
My goal with these as an experiment was to keep rolling the same strike out and collecting as much premium as possible for a deep ITM position and so far I have collected just under $210 each contract in premium, effectively making my cost basis $990 if they get assigned (I have the cash).
Maybe with another roll I will just let them assign and keep the shares costed below $950 and wheel them aggressively with ITM CC's to see how that goes.

This has created a good learning situation for me having deep ITM contracts and still making money with them to allow for much more flexibility in my approach should things go against me.


Cheers!

That's awesome on the $1200s.

 

[OrthoSurg]

With this SP move, I'm now closed out of all my positions. I've had continuous options running for probably a year, so it's very strange to see my account bare!

I'll still be watching closely (but stress free) and waiting to get back in, either on another big drop or pop when Elon finishes selling. I'll also be looking to get back into ICs if we have a more stable trading channel.

Never good for a beginner like me to read a message like yours. When I see a Veteran watching on the sidelines, I feel like I am running defenceless in the middle of the coliseum with hungry bears and wolves around.

I am looking forward to learn to manage my 19/11 1155 CC when it comes close ITM. It the stock gets to $1100, rolling out in 2 weeks seems like a very bad idea with the pop that will happens when Elon tweets he finished selling. I might just close it when it gets to a 100% loss.

 

[adiggs]

As others - closed out my 650/850 and 600/900 put spreads at ~80%. Mostly wanted to realize that profit and await what I think will be a good entry later today or tomorrow.

Taking this up day (so far) to sell some 1110 calls for this Friday around 5.30. I see a pretty significant call wall at 1100 (not a surprise) and I see this 1100ish share price as roughly the mid point of the recent "trading range". I put that in quotes as we haven't traded up and down the trading range nearly to call it a trading range, but its how I see it.


In both cases this is also consistent with my own approach to trading since roughly this summer - close into weakness and open into strength. The up day means this is weak for the puts (time to close) and strong for the calls (time to open).

 

[BornToFly]

With this SP move, I'm now closed out of all my positions. I've had continuous options running for probably a year, so it's very strange to see my account bare!

I'll still be watching closely (but stress free) and waiting to get back in, either on another big drop or pop when Elon finishes selling. I'll also be looking to get back into ICs if we have a more stable trading channel.

I don't see the point of sitting out completely. Just do a very wide, safe spread, like 800/600 for next week, and at least make some money.... Maybe wait to see if there is a drop tomorrow to maximize premium (but Theta is burning each day)....

 

[BornToFly]

I made $12,500 a little earlier selling 100X RIVN 125 Puts for this Friday. Total gamble since I don't know if it crashes hard the next three days. But just keeps going up for now....

 

[OrthoSurg]

I made $12,500 a little earlier selling 100X RIVN 125 Puts for this Friday. Total gamble since I don't know if it crashes hard the next three days. But just keeps going up for now....

I was just looking into buying Puts for that price for 3/12 expiration. However the premium was so high I thought at selling those and then realized it was tor all gamble and closed my platform and going to play tennis instead.

Have safe trades everyone!

 

[corduroy]

Never good for a beginner like me to read a message like yours. When I see a Veteran watching on the sidelines, I feel like I am running defenceless in the middle of the coliseum with hungry bears and wolves around.

I am looking forward to learn to manage my 19/11 1155 CC when it comes close ITM. It the stock gets to $1100, rolling out in 2 weeks seems like a very bad idea with the pop that will happens when Elon tweets he finished selling. I might just close it when it gets to a 100% loss.

I certainly don't feel like a veteran lately, I still consider myself a noob. I learned a lot these last couple weeks.

I had a string of 100% success every week for 6 straight months, but now I realized, I didn't learn much during the that time. These last 2 weeks and taking some losses taught me a lot more than the last 6 months combined.

Many lessons, but my biggest takeaway is probably this - I don't need to force trades anymore. I felt like I had to make trades every week no matter what, to keep that income flowing. This made me enter into trades that too were early, before I really knew what was going on with the SP trend. I plan to do things different going forward. I want to sit back and be more patient before entering new trades - wait for them to come to me. If there are no good setups for the day or the week, don't do anything. Focus on quality over quantity.

This is nothing new, people have discussed this before. @adiggs seems to be great at this. But it was one of those things that just never clicked by reading others talk about it. I had to experience the repercussions myself. Now I get it and am looking forward to a reset and coming back with a fresh approach.

I don't see the point of sitting out completely. Just do a very wide, safe spread, like 800/600 for next week, and at least make some money....

I think I just need a break from worrying about TSLA. I do have some ICs I opened yesterday on NVDA, so not totally out of the game.