Not yet - depends on how today goes.
If I was looking at straight P's I would be looking at the $1k Puts for the 23rd
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Wiki Selling TSLA Options - Be the House
- Thread starter adiggs
- Start date
If I was looking at straight P's I would be looking at the $1k Puts for the 23rd
jeewee3000
Active Member
I think chances are we'll close over $1.000. Maybe not by a lot, but hey.
TheTalkingMule
Distributed Energy Enthusiast
More 12/17 BPS $790/$890 @ $6.10
To me this is just about free money when the major Friday economic indicator(CPI this week) is already out and not above expectation. $610 on $10k of margin is a phenomenal return on a strike that should have nearly 0% chance of being in the money 7 weeks from now.
Please check my logic.....black swam scenario, I keep rolling them for more premium until 4Q numbers come out. Obviously this requires me to believe without a doubt that 4Q earnings has SP above $900 in a black swan, but even rolling 7 times for zero additional premium is more than .5% per week. Realistically, rolling it 7 times averages closer to 2-5% weekly return depending on the roll premium each week.
What's better, doing this or selling the safer strike at $690/$790 for 1%? I think clearly the first is the way to go if you have time to manage it.
To me this is just about free money when the major Friday economic indicator(CPI this week) is already out and not above expectation. $610 on $10k of margin is a phenomenal return on a strike that should have nearly 0% chance of being in the money 7 weeks from now.
Please check my logic.....black swam scenario, I keep rolling them for more premium until 4Q numbers come out. Obviously this requires me to believe without a doubt that 4Q earnings has SP above $900 in a black swan, but even rolling 7 times for zero additional premium is more than .5% per week. Realistically, rolling it 7 times averages closer to 2-5% weekly return depending on the roll premium each week.
What's better, doing this or selling the safer strike at $690/$790 for 1%? I think clearly the first is the way to go if you have time to manage it.
bkp_duke
Well-Known Member
Not advice, but isn't it "deadly" for the share price to close between 1000 and 950 in this situation? I believe someone called it "pinning" and that you are required to pay out the full amount on the 1000 Puts, but get no "insurance" from the 950 Puts, because they expire worthless.
Please, someone correct me if I'm wrong.
bkp_duke
Well-Known Member
The real risk is if you are using margin, and the SP goes ITM on those, you can have nasty and ever-increasing margin calls very quickly on them.
Only deadly if you let expire, but that was not one of the things he said he would do.
TheTalkingMule
Distributed Energy Enthusiast
Apologies, it's actually in an IRA so I have to hold the actual cash to back the spread.
scubastevo80
Member
Not advice from the experts - sitting on a 890/790 BPS that's down about 100%. We can roll it forward to 12/23 for a $5 credit. Is it worth doing this, or given we're still 10% from the sold put strike price, perhaps sit on it until next week? Said another way, do folks roll just to grab credit even if they feel their strikes aren't in danger of expiring ITM?
corduroy
Active Member
STO some 12/17 725/825s, and I have orders in to close out my 12/10 750/850s for pennies. I'm done now for the week.
I do if I think the SP will recover and I will get less credit next week for the same BPS.
bkp_duke
Well-Known Member
Not advice, but that far out I personally would be looking to see what happens next week. Let theta be your friend in this case.
scubastevo80
Member
Thanks BKP and BornToFly - I had limits in which didn't hit and it seems both our BPS recovered 50% of their losses when TSLA bounced back over $1000.
Used the dip this morning to close out CCs expiring today and open half of my next week’s BPS:
IRAs: -870/770
Reg: -850/650
Will look for an up day to open up some CCs.
Macro market has me a little worried so not being aggressive here.
IRAs: -870/770
Reg: -850/650
Will look for an up day to open up some CCs.
Macro market has me a little worried so not being aggressive here.
Not advice: I am sitting on some 950 puts that expire 12/17. If I roll them to 12/23, I will only get 50% of the original extra value extra (so $1.50 versus the $1 I have). Not worth it IMO. Today feels an awful lot like Elon selling again so I am just sitting on my hands and letting Theta do its thing.
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i never wait for 0 DTE before making decisions, especially on borderline strikes
- quick downhill means instant ITM (chance of early assignment, expensive to roll, may not have time or buyers to close, etc)
- SP may not go up again the rest of the day
- no extrinsic safe buffer
- position may still be good late afternoon, but a 3:59 steep pushdown will be a disaster
if 1 DTE (thursday) and i am still uncomfortable or position is 50-50, roll or close is guaranteed
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