Wiki Selling TSLA Options - Be the House

[Towly420]

Hey all,
just wanted to share something with you about a risk management tool I found. I‘m not sure if I‘m allowed to post the link here, so I‘ll describe where to find it, if the link has to be removed later: It‘s a tool from RadioActiveTrading and it is called the Trade Simulator Tool.

Link: RadioActiveTrading

You can enter there the target return, loss limit, probability of loss, starting amount and % invested per trade. The output is the result after 100 trades and you can repeat it to see several outcomes since there is never only one result when probability comes into play.

Imo it is a very useful tool to check your strategy if it is profitable in the long run or if you are fighting the math with your strategy.

 

[strago13]

Does anyone here have a good grasp on the formula's used for calculating margin usage? I recognize this probably depends on the broker and what you are selling (in my case it happens to be puts)...but I am not happy with eTrade's calculator, it doesn't really give me everything I need to make informed decisions, especially on the fly, so I am trying to add this to my spreadsheet.

I found this for formula's Options Margin Requirements | TradeStation but I cant seem to make any of those formula's match the output of eTrade's calculator.

Thanks,

 

[mickle]

Back from a week vacation, up early, want to trade but nothing looks too good.

No one is posting any trades. Should I go away for another week?

 

[vwman111]

to celebrate my winnings (thank you very much for the predictable 10am dips, market manipulators), i spent the day wrapping up holiday giftsfor people that i care about - Mac, MacBook, iPhone, diecast cars and assorted stuff from the Tesla store, cash envelopes, vacuum cleaners, appliances, frozen steaks and ribs, etc etc etc

i challenge everyone here to please do better than me... withdraw some of your good BPS fortunes and spread around some cheers this season... it's not too late and there is no excuse for not sharing!

you have no money, you insist? STO 12/17 BPS x1 -p900/+p800 is $200 credit for a nice gift card, no?

For Us?

 

[EVCollies]

Grabbed a few more 12/23 BPS -p910/+p710 @ 10.4 at the MMD, looks like I'm on Santa's nice list this year!

 

[bkp_duke]

Late start today. What's driving the price action?

My BPS have me nervous right now.

 

[TheTalkingMule]

Can't believe I didn't close most of my 12/17 BPS on Friday. Could be safely reopening the very same positions today and doubling my weekly take. Lesson learned I guess.

 

[UltradoomY]

Still holding my 12/17 BPS for 980/780 and not sweating it much since IV was higher last week and some theta burned off - I am still up 55% with the SP at $983
Will probably look for a rebound / close out tomorrow or Wednesday unless we dip down to around $950 - and then I would look for a good roll.

With 12/23 a short trading week I would be looking for max improvement instead of credit and hopefully an early close if we pop up around $1050.
Hope everyone is fairing better today!

 

[mickificki]

Late start today. What's driving the price action?

My BPS have me nervous right now.

This sorta feels like an Elon selling kind of day. Sorry, don't have anything concrete.

 

[jeewee3000]

In the next couple of weeks I won't have a lot of time for trading/following TSLA/TMC.

The open today provided me with uncertainty regarding my 12/17 BPS:
-1000/+900
-1000/+940
-1000/+960
-1000/+980

Therefore I rolled them all to 01/07 like so:
The -1000/+900's stayed -1000/+900's
The other BPSes all became -1000/+940, derisking these trades somewhat with more margin usage. Thinking the probability of rolling these profitably increases - should the need arise in the final week to expiration (i.e. first week of January).

Why 01/07? Because it gave me the same credit as 2.5x the credit if I rolled to 12/24. So a three week roll for a "loss" of only 1/2 week of theta seems fine by me, giving the SP enough time to recover above $1000.

Now I'm planning to sit on my hands at least for 2 weeks, with the exception of a giant TSLA rally. In that case:
- I'll see if I can roll some of these BPSes forward in time at $0 credit/debit or up in strike price for a credit. (All depending on reason of rally of course)
- I'll sell some CC's for gravy.

Until then, I'm signing off for now. Good luck to you all in the final weeks of the year and happy holidays (I know, I'm a tad early).

 

[BornToFly]

Can't believe I didn't close most of my 12/17 BPS on Friday. Could be safely reopening the very same positions today and doubling my weekly take. Lesson learned I guess.

No way to know. We could have opened up 2% and climbing. Then the same positions would have been worth nothing. We are getting closer to Q4 numbers everyday. At some point this game of chicken will end and everyone will buy. Right now it looks like MM are still trying to scare weak holders and get cheaper shares.

 

[FS_FRA]

Holding on to my 12/17 -900/700 BPS - even with another two ESDs (Elon Selling Day) this week, I don't think we'll make it all the way down to a SP of 900 for this week. Of course, this is a correct assumption until I'm spectacularly proven wrong....

 

[elasalle]

Took the opportunity to roll Jan,Feb calls to June
Overall losses but since a lot were verticals , the blow was a bit softer
Now will wait patiently for the reversal

TOS news feed says whale short option activity detected

 

[mickificki]

Holding on to my 12/17 -900/700 BPS - even with another two ESDs (Elon Selling Day) this week, I don't think we'll make it all the way down to a SP of 900 for this week. Of course, this is a correct assumption until I'm spectacularly proven wrong....

I have 12/23 870/770 BPS, rolled it to 12/31, same 870/770 for $4.20 (hehe). Now it's probably more. Ugh

One of the things I appreciate about professional atheletes is their ability to forget the mistake they made and move on instantly to the next play. And then afterwards they review film to see what they could've done to avoid future mistakes. I've been trying to have that mindset but hot dang its difficult!

 

[Yoona]

reminder for the rest of 2021 even if upside feels like a sure thing: don't chase prems and go at least 20% OTM; slow and steady weekly income is the key to survival

 

[corduroy]

Sold some 12/23 BPS 800/700s @$2.50 I'm comfortable with those strikes.

 

[samppa]

uhh.. my biggest bps for this week is -p1050/+p950..

 

[JustMe]

uhh.. my biggest bps for this week is -p1050/+p950..

Welp, good luck with that

 

[DGates]

Whats your opinion @st_lopes on the risk of frequent trading being classified as business income as opposed to capital gains for purpose of Canadian tax? This is an issue particularly for tax free (TFSA) accounts but may arise in taxable account as well, resulting in doubling of tax due.

There are few articles online discussing the risk in the context of TFSA but here is the more generic interpretation from KPMG:

https://www.m-x.ca/f_publications_en/brochure_fiscalite_kpmg_en.pdf

The CRA generally recognizes that individual investors displaying one of the following characteristics will have to report their option-related gains or losses as business income:

1. The transactions are that of a taxpayer who holds himself out to the public as a trader or dealer in securities;
2. The transactions are made by a taxpayer using special information not available to the public to realize a quick profit;
3. The transactions are part of the “whole course of conduct” of the taxpayer and are carried on in the same way as those of a trader or dealer in securities. Some of the factors to be considered in establishing whether the taxpayer’s course of conduct indicates the carrying on of a business are as follows:
   
   1. extensive buying and selling of securities;
   2. securities usually owned only for a short period of time;
   3. knowledge or experience of securities markets;
   4. security transactions form a part of a taxpayer’s ordinary business;
   5. a substantial part of the taxpayer’s time is spent studying the securities markets and investigating potential purchases;
   6. security purchases are financed primarily on margin or by some other form of debt; and
   7. the taxpayer has advertised or otherwise made it known that he is willing to purchase securities.

Here are couple tax free account specific sources, in this case re-assessment is particularly painful ... from 0% tax to 50%:

Day trading in a TFSA or RRSP | Investment Executive

There are several factors that must be taken into account when determining whether a taxpayer’s gains from securities constitute carrying on a business

www.investmentexecutive.com

Frequently trading stocks in your TFSA? The CRA may have questions - National | Globalnews.ca

Many young Canadians have started investing during the pandemic, often opening self-directed TFSAs. But too much trading inside a TFSA could trigger tax consequences.

globalnews.ca

As a precaution I have restricted myself to monthly or longer durations, I also spread my transactions across multiple entities (persons and corp) which lowers trading frequency.

This is an interesting topic, and would appreciate you sending me the PM also.

Thanks in advance, @st_lopes !

I'm in a similar situation, having multiple accounts, including Margin / RSP / TFSA and joint accounts all of which have TSLA in one form or another. Shares and LEAPs in the TFSA which has done very well. I've sold small numbers of puts for the last couple years in my margin accounts but this thread has really helped me get started with selling put spreads this past year. Not looking forward to tax time as in the past I've always done it myself, but thinking it may be getting too complex for me to do a decent job anymore.

I'd love any advice on Canadian taxes and how it relates directly to selling spreads and how people in this thread may be handling it. Open to advice on tax accountants that understand this stuff in the BC Lower Mainland area too.

Thanks!

 

[intelligator]

Took the opportunity to roll Jan,Feb calls to June
Overall losses but since a lot were verticals , the blow was a bit softer
Now will wait patiently for the reversal

TOS news feed says whale short option activity detected

Nervous about all the BPS I have short position between 930 and 950... a few are for this week , bring on that reversal , might be only opportunity to roll out some, improve strike is the aim. yikes!