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Wiki Selling TSLA Options - Be the House
- Thread starter adiggs
- Start date
So this lowly 960 SP has me thinking... I need 49 chairs to make my total holding a round number. Currently that'd cost me $47K plus change.
I could also buy 1x DITM Jan'24 640C for $480 - so either 49 chairs or double the chairs via a LEAP.
Chairs I'd want to hold, and the round number then lets me sell 1x more CC against them when the time comes - LEAP I'd play the LCC game with to see how that goes.
I figure it will be no issue to see the LEAP appreciate through Jan'24 - so assuming we hit $2000 by then, the LEAP will 2.8X in that time (all other factors assumed to be equal).
Just buying the chairs will "only" 2.1X.
Any not-advice here for what I should be looking out for in this scenario? What am I missing (other than the fact I'd have margin / capital tied up until Jan'24 if I went the LEAPs way.
Thanks.
I could also buy 1x DITM Jan'24 640C for $480 - so either 49 chairs or double the chairs via a LEAP.
Chairs I'd want to hold, and the round number then lets me sell 1x more CC against them when the time comes - LEAP I'd play the LCC game with to see how that goes.
I figure it will be no issue to see the LEAP appreciate through Jan'24 - so assuming we hit $2000 by then, the LEAP will 2.8X in that time (all other factors assumed to be equal).
Just buying the chairs will "only" 2.1X.
Any not-advice here for what I should be looking out for in this scenario? What am I missing (other than the fact I'd have margin / capital tied up until Jan'24 if I went the LEAPs way.
Thanks.
bballshinobi
Member
If the price gets low enough ($750-850), I am going to sell a $1,000 or $1,250 CCP and use the premium to buy shares (basically a bet on top of a bet lol...).
AquaY
Member
Etrade is weird. Much of their math is simply wrong. I pointed this out a few times and they admitted it. They didn't change anything. But theyfinally admitted it after trying to BS their way around it
The fact is you are stuck with how they do it.
Only option is to go to another broker
bkp_duke
Well-Known Member
By technicals, $960 is a medium-term support level. If we breach that the next one is $910.
Hoping you are right and we see a big turn-around today and this was all just Elon selling or a bear raid. I'm 6-figures negative for the day and really would like to see that turn around.
I wake up and I'm glad I closed out BPS on Friday for a modest loss. With the drop today that lets me reenter with 650/850 put spreads galore. This week were worth around $2 each while next week were going for $7ish - I went with next week. I also cut my spread width down to $200 from $300 for this position - I figure I'm below the previous ATH and the midpoint is really close to really strong support in the 700 to 730ish range.
Of course I felt good about the 1050 put spreads I had last week and see where that got me
Of course I felt good about the 1050 put spreads I had last week and see where that got me
Lower BB is 965. Price action is making me believe probability of visiting 910 this week is increasing. Likely as a ride down of the Lower BB. From there, only real question is do we grind lower to 840, or is that the end of this bear trend.
I'm thinking that either way, this week is likely the end of a 6 week bear cycle on TSLA, with Nov 4 being the starting point. Institutions will start window dressing and positioning for Q4 P&D through second half of December, which should carry-us for the next 4-6 week cycle, which hopefully runs straight into the catalyst that will be Q4 results.
How it's influencing my thinking around trades this week:
- Orders in to close my 1170/1220 12/17 BCS at 80%, likely will fill today, not bad for one day of price action;
- Not rolling my 920 / 900 / 830 12/17 BPS just yet, though I may need to act on those later this week;
- My 1050 LCCs are set to expire worthless - end of that saga - will sell weekly LCCs at much higher strikes (1250 or 1300 for next week);
- I will let my 805 12/17 CCs assign this week and reposition that account (will be all cash after that assignment) in to leaps and shares;
- I will let my 800 12/23 CCs ride for up to another week, but will flip roll them to 03/2022 or 04/2022 BPS once I believe we're hitting a bottom or near bottom;
well, looking at max pain, and the walls and charts, I'm fairly confident that we will be around 1000 towards the end of the week.. then I should be able to roll for credit/strike improvement.
If that proves hard, I have a decent amount of unutilized margin, so I can make the spread wider, increasing my rolling possibilities. I know it's digging a deeper hole, but I really don't see us spending much time at these levels..
Just need some help better understanding when the price is close enough. In the above example, at what point would you consider rolling the 920/900 ? When at 920 , below , or close to it? I have 950/820; should I be looking now to roll or still have time even after we breach 950? I see some rolling or closing with the price well below the strike. In other words, what drives assignment? Obviously, I want to avoid assignment.
Looks like we are primed to break our 950 support, volume is not insignificant. If it breaks 950 I think we will see a mini flash crash, seems to be also aligned with NASDAQ support.
No trades for me today, just going to watch. Have some -900/+800 BPS in play for this week. If not today I think we will see lower 900s this week and maybe fill the last gap at 910. If it does get there my plan is to buy some LEAPS in my trading account.
No trades for me today, just going to watch. Have some -900/+800 BPS in play for this week. If not today I think we will see lower 900s this week and maybe fill the last gap at 910. If it does get there my plan is to buy some LEAPS in my trading account.
corduroy
Active Member
I believe someone here called that a Texas hedge.
TheTalkingMule
Distributed Energy Enthusiast
I don't know if it's the window we're in between massive run-up, Elon selling, and 4Q earnings.....but this quick close strategy is starting to look like it should be law. For folks constrained on BPS by margin limits it's an absolute must. I'm sitting on $940/$840 BPS I could have sold Friday for 50-70% profit, now they're......a hot mess. No worries, just lost opportunity to reopen a similar position a killing.
Again, this could be a unique period of time where extreme volatility is somehow coupled with strong support, but ALL my regrets the last month are rooted in not closing positions for "dry margin powder".
This whole exercise has been so great for changing my mindset. Hell, I just wrote a post in the main thread about how we shouldn't be levering up with calls right now. ME! Not buying calls NOW! The world is truly upside down.
Doing nothing, watching theta erode.
OT
a question, i read a lot of posts here and know enough to know i should not do options and my spouse has forbidden it
does the statement
“ i write OTM puts against my short and which regularly expire worthless i ring the register almost every friday”
make sense?
(this came from a confirmed long term short)
(i have no need to realize any gains so far as other revenue streams are quite sufficient)
a question, i read a lot of posts here and know enough to know i should not do options and my spouse has forbidden it
does the statement
“ i write OTM puts against my short and which regularly expire worthless i ring the register almost every friday”
make sense?
(this came from a confirmed long term short)
(i have no need to realize any gains so far as other revenue streams are quite sufficient)
I just bought shares and some calls lol
Not really
At least around here - we're using cash and/or margin to back the OTM puts we're selling. The rest though - regularly expire worthless and ring the register almost every Friday is directionally accurate while being not strictly correct. Mostly people are closing their positionss prior to expiration - there are some end of the expiration day trading dynamics that provides some value to taking action to close the position rather than sitting back and letting it expire. Not for all of us - but its a pattern.
That being said - I think that there might be a trade that is the opposite of a covered call. In a covered call we buy shares and then sell OTM calls using those shares as backing.
So maybe one can sell 100 shares and use those as backing to sell short OTM puts. The idea is that if those puts get assigned then the 100 shares you've got sold short would offset the 100 shares you need to buy from the OTM put being assigned. Yeah - I think that could work. Of course you'd need to have sold shares short and looking for the share price to go down.
Which also implies that one could purchase a high strike put and use that to back the sale of OTM puts.
You're making my brain hurt. And I don't like shorting TSLA anyway, but I guess that yeah - now that I think it through, then yes, that does make sense.
Makes sense. And a crazy way to live and die. Essentially this is a naked short call position that's continuously rolled.
Can make money, but your face could be ripped off anytime.
Edit: this serves as a tldr to the essayist's post above.
I will start looking to roll the 920 if we breach 920. You have time to flat roll right up until the mid-point of your spread and usually can roll for strike improvement and a credit in the upper half of your spread. I also have more willingness to roll while in spread as I can widen the spread if needed to get strike improvement for a credit. If I felt like 910 wasn't going to be a strong floor, then I would consider rolling earlier (or split-flip rolling), but I think it is likely to hold up in the near term.
Technically that's a covered put. It's like a covered call, but instead of owning stock and selling calls, you would sell short 100 shares and sell a put. If that put ends up ITM, you exercise it against those short shares.
Guess it might make sense, if in the long run you believe shorting tsla is a good bet.. I would disagree, as I think most here would.
In fact, many here sell naked puts, without having a short position on the stock.
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