Knightshade
Well-Known Member
I wouldn't be remotely worried about those #s for 1/7.
Elon sales will be over, and Q4 and EOY P&D will be out by then, and it's 15-20% OTM right now.
-
Want to remove ads? Register an account and login to see fewer ads, and become a Supporting Member to remove almost all ads.
Wiki Selling TSLA Options - Be the House
- Thread starter adiggs
- Start date
I wouldn't be remotely worried about those #s for 1/7.
Elon sales will be over, and Q4 and EOY P&D will be out by then, and it's 15-20% OTM right now.
What are talking about? Elon said yesterday in BabylonBee interview he’s done with 10%, plus his $11b+ in taxes tweet is matching his tax bill after yesterday, so pretty sure no more sales this year.
Ouch. Hard to stay up-to-date.
Still, with few more tranches he’ll have like $14B+ of taxes, 11b tweet does not make sense. Maybe he moved those 3 tranches to after 1/26/22 by canceling and replacing his 10b5-1 plan as Gary suggested.
This would cause 11b+ of taxes this year and 10% sold by next year, so no contradictions. That’s my reading anyway.
This is a Christmas week and HODLers are whining loudly, so he could have decided to give them a break.
Last edited:
TheTalkingMule
Distributed Energy Enthusiast
All these tax/selling/not selling discussions could be in the main thread. Not sure they even belong there.
yes. But this is for another "addon"-position prior to the rise i expect - i still have my LEAPS (as you have shares) to do the regular CC on. I added & track this calendar call completely seperately.
Also if the CC ends up ITM & i close it befor expiry it has nearly no tax-implications (as opposed to letting shares go).
I opened it up with 10x that contract. So it was "only" 20k upfront (20$ cost basis), down to 1181$ cost-basis now (with current value at 31k at close). And this assumes worst-case of SP tanking & never recovering until end of jan after earnings. Theoretical there is a "unlimited" loss if SP rises too fast for me to react & not roll the short call up & out fast enough (i.e. jumping from 1000 to 1400 over night & never going back until after earnings).
If you are near a border to another country i MAY be good to set up a company in the neighboring country ..
For example i know that Liechtenstein taxes gains only at 12.5% and allows LIFO & FIFO. But if you take money out of the company you have to pay your taxman on the gains as well (25% here in germany) - but only IF you take $$$ out
Why be "near" a country? Because all countries have provisions that you have to do the actual trading in the country you want to be taxed at - and driving 50-80km each day is reasonable, driving from norway to liechtenstein every day not so much ..
bballshinobi
Member
Same for me.
Worst things done this year (so far):
1. started with ~1m. totally f'ed up the rally to 550 -> low of 78k (while moving money out of stocks into real estate for my wife) => 90% down
2. rebounded HARD with the rally to 1240. topped at 2.4m. Down to 650k at the lows yesterday. EVEN THOUGH 500k are in various ARK ETFs introduced as a security measure against (1)! => 75% down
3. rebounded today to 1.15m in the high side.
I promise next year i will be smarter and not that degenerate to gamble my future away .. -.-
I think i am not that good at trading.. i mean .. i win big & then lose big. OTOH the downsides seem to increase as well..
Do you day trade a lot and hold mostly options? Or do you keep drawing money out of your portfolio? Just curious because the math doesn't compute lol
Gotta say, you guys on this thread live in a different world. Many of your posts fly right over this noob's head. But I really want to learn some of these strategies in advance of retiring and focusing on income-generation with my TSLA shares.
I understand covered calls and have used that tactic effectively in the past.
I understand selling cash covered puts. I like this idea much better than CCs as I am a long time bull and expect SP to increase. However, most of my funds are in an IRA which does not allow margin. And as I run numbers, it seems to me that I am better off long TSLA shares rather than having idle cash set aside to cover short puts.
Would love to hear the experts' opinions on this.
I understand covered calls and have used that tactic effectively in the past.
I understand selling cash covered puts. I like this idea much better than CCs as I am a long time bull and expect SP to increase. However, most of my funds are in an IRA which does not allow margin. And as I run numbers, it seems to me that I am better off long TSLA shares rather than having idle cash set aside to cover short puts.
Would love to hear the experts' opinions on this.
daytrading a lot & nearly only options.
The low of the year was on 17.08.2021 with ~78k intraday. In the weeks following that up to 08.11.2021 i had a TWR of 1825% gaining back everything i lost. So, 90% down, ~2000% up. From the highs with SP @1240 down to the lows yesterday was ~ -75% (around 650k intraday as mentioned). Today i closed at ~1150k (+40% in one account, +30% in another today alone without the rebound from lows yesterday).
I just draw out ~4k each month for living expenses & will draw out ~200k in march due to taxes for 2020 (filing deadline for 2020 is end of feb 2022).
All in all YTD i turned 993k into around 1100k. With the afromentioned intraday-highs of 2400k & intraday-lows of 78k... So i really need to gamble way less & never overleverage that hard again. The rally today saved my account before xmas & i took advantage and closed A LOT & deleveraged very hard. Still have a delta of ~3000-4000 nonetheless.
Just ask questions. We are glad to help
I heard that there are IRAs that allow Spreads. Even with something like a 1000/500 spread you get nearly the identical behaviour as a 1000 put - but only half the cash required. Managing the spread (with respect to rolling etc.) is identical to a simple put - but only down to ~750 (halfway) instead of 500.
Width is chosen so extreme to get the "normal short put"-behaviour.
Another possibility is to sell REALLY aggressive puts (like 1% OTM) each week and risk assignment. Use those to sell calls above that strike & get exercised. => calld "The Wheel". Why should you do that? you basically harverst IV every week and don't care about the shares. Currently this yields ~2k income every week for each contract ($ 100k backing) - so a weekly yield of 2%.
Downside risks: You get assigned, SP drops, you have to sell calls for less every week until SP recoveres (imagine getting assigned @900 in jan/feb, then have to hold all the way down to 550 & up to 900 again - just to miss out on the breakout to the upside.. and you would now be still hodling shares with 1240 cost-basis & selling 1250 CC for pennies every week until
"The wheel" can be programmed & done automatically with several brokers offering an API. If i have to guesstimate i think you would have made around 30-40% in 2021 with this strategy (ignoring the paper-loss on the assigned shares).
I’m consistently low on cash, now 2-5% in each IRA account. This was way TOO little back when I was essentially 95%+ in TSLA and selling CCs. Unfortunately, lost most of my shares since I was unable to buyback and roll fast enough (Hertz donut). Now I’m mostly selling cash-secured puts, but still having trouble keeping enough free cash, because I keep rage buying shares when the SP drops. Fortunately, it’s easier with puts because rolling down and out for credit reduces the CSP backing, and frees up additional cash. I still have some shares and sell calls as well, which helps balance the puts (kinda like an iron condor, but fully secured without the spread). I would rather have 5-10% cash and selling 1:1 p:c. Still working towards that goal, ~1:1 in one, 0:1 in another, and ~5:1 in another.
Consider transferring your IRA to a brokerage that allows for options trading, spreads, and limited margin. You may not end up utilizing these strategies, but at least you’ll have the option (get it? Hah) in the future should you so desire. Our Roth IRAs are at Fidelity.
Not financial advice, know your risk tolerance, etc.
Cheers!
Agree, after today I am in chill mode for my 1/7 -p900/+p700's... but not ignore mode...
I started with covered calls, not much premium and eventually were assigned. With that $ I sold cash covered puts, hoping to get assigned and own those precious TSLA stocks again. But I realized there is much more premium to be made selling puts and given a stock I know will rise, puts can be rolled. I then learned credit put spreads, bull put spreads, BPS, can create more premium and better rolling, but only if you watch them closely...I might be going to puts eventually, but I barely understand options right now even though I'm a fairly fast learner, so I'll get started with covered calls and get some experience and then branch out
Not advice.
why, hello there, cute-as-a-button-puppy-i-WANT-to-adopt-you
my not-advice is to trade at your own comfort level and risk tolerance; the important thing is the willingness to learn and not to gamble
i was daytrading TSLA and then the 5-1 split happened; suddenly i have more than enough to try "options"
my first trade was CC, then i learned BPS, then IC, then Short Strangle, then Iron Butterfly, then Short Straddle
along the way, i learned in this thread some tools of the trade - flip roll, roll split, flip split, wider spreads, IV, theta, margin, etc
that's it, that's everything in my bag but it's way more than enough for my needs
when this side gig started earning more than our combined household income, my significant other and i both quit our dayjobs and never looked back - no regrets!
my New Year's Resolution is
- to cut down on risk (ie absolutely 20% OTM regardless of premium and use wider spreads); all i need to wipe me out is a weekend black swan event and i'm your dollar store cashier
- focus on capital preservation instead of income generation (ie if my grand total income is 5k/week instead of 100k, that's still honestly amazing income for a retiree not drawing down nest egg principal)
- reduce trading income tax (this is in progress; paperwork is ongoing to "incorporate and produce dividends"); this is another way to slowly distribute wealth to kids now and reduce probate fees later
good luck!
I'm curious to know more - is this something you've got a website to point to for more reading? I think that the way I understand this - you start with a vertical spread. At some point you roll the short leg out while leaving the long leg the same. At that point you would have (for example) an insurance put expiring on 12/31 and a short put expiring Jan 7. Does that keep the margin / spread reserve calculations happy?no. The short 1050 for dec 31 got moved to jan 7 1100 for a small credit. It is now a diagonal spread instead of a calendar/horizontal spread
Idea is to start horizontal and then stay horizontal for as long as sensible. If SP rises, then diagonalize up until the short either expire or you end up with a vertical that you then handle like a "normal" spread and take profits at the end.
The horizontal -> diagonal -> vertical route on the short call captures way more premium on the way if SP stays level or rises, but loses more, if SP goes below the chosen strike at the further expiration.
As you approach 12/31 then you'd be rolling that insurance put out to the short put strike, and hoping for a reversal before that comes along so you don't need to buy the extra week of insurance. Is that the idea?
Read the first page of the thread if you haven't already. Lots of the original background there.
Others have responded with lots of good info. We're assuming that you're through the Options Alpha beginner education or equivalent about options.
When I started it was with cash secured puts. I think they're a great place to start.
And think about what your objective is. For me - I'm all about income, even when that means giving up growth. Giving up on some of the growth is part of the risk I take in pursuit of a more stable income stream each month.
Yoona had a good insight above. Priorities are capital preservation, then income, then growth (putting it into my words and my own context). I also have a couple of numbers in mind for monthly results I would like to achieve. The target and then 1/2 of that where life is still (very) comfortable. That's helpful because if I find myself beating the target by too much, that's probably a good indicator that I'm getting too aggressive.
Not advice (yet kind of advice
) - you might find that a good starting objective isn't so much an actual income as it is an education via skin in the game / experience. Start with small positions - big enough to get your attention - and ideally small enough that if you lose the whole position then its not a problem. Lots of stuff to learn here - mechanics of entering orders, mechanics on doing a roll when you decide that a position needs it, and on.As I mentioned I like cash secured puts as a starting point. You can trade these in a brokerage or a retirement account.
An important idea to keep central in mind - many of us have been doing this for more than a year. If it sounds like we are sometimes speaking in a foreign language its because we've got a year+ of education and experience, mostly with weekly trades. I'd say by now that we've all suffered a big loss, big wins, and some close calls. All of which contributes to that experience.
An important component of this thread is our mutual ability to learn from each others experience. It accelerates our learning dramatically. My own experience - my results really took off over the summer about the time that the thread activity picked up a lot. Lots of new faces, lots of new trading ideas and techniques, and lots of learning for me. Its not like my results were bad before - I nearly doubled my paycheck salary last year as part of my education (being paid to learn - sweet). I had a month over the summer that was just about as good as all of last year, and its the mutual learning going on here that was necessary to that result.
So dive in, ask questions, read lots. And also let us know what you're doing, and more important why you make the decisions that you do. Its not the trades being executed that are interesting to me - its the thinking behind them that helps expand my view of things.
Oh - and make sure that you're staying up with Tesla the company. As mentioned back on page 1 - knowing this company as well as I do I believe provides me with an information edge over Wall Street. I know that many others here do as well. If you don't have that company background then ... I dunno
I think he is doing it with calls, and you have it backwards. He buys a 1/22 insurance call, and then sells aggressive calls against it every week leading up to that expiration hoping that they all expire worthless.
As far as my trades, I had been a "little" too aggressive with my BPSs lately and was sweating bullets trying to figure out how to save everything besides just bull-dozing them forward, and was contemplating a huge, at least for me, loss but this ended up being my most profitable week/month so far by ~2x. I did lose some in an IRA last week because I didn't have the cash to roll them because I let them get too far ITM. (I guess I could have sold something else to get the cash, but I decided to just let it go and concentrate on my other accounts/positions.) I ended up rolling everything else forward on 12/17 just hoping that nothing got executed early.
Today I rolled a bunch of BPS out and down on the rise early in the day, but held on to one position, 12/23 910/975 BPS, until the end of the day and closed it out with a 90% return. Now I still have some 12/31 940/985 BPSs to deal with, and am hoping that since it looks like Elon is essentially done selling that those are now safe and can be closed out early next week for a tidy profit.
One thing I learned is that it gets really stressful when you have a bunch of different positions open in a number of accounts, and have to deal with all of them at the same time. Of course this happened because I kept "rage" selling more BPSs as things dropped thinking that it would be really short term. It didn't help that I took a bunch of that premium and "rage" bought more shares at the same time.
In the end I caught that knife, and now my hands are nicely bandaged up and healing.So best to open bigger positions, as big as you are comfortable with, initially and then just deal with them instead of creating more little positions.
Going forward I need to be much less greedy, and figure out how much I want to earn a week/month. (It would probably help if I didn't have a full+ time job to deal with too, but at least since I work from home, and have flexible hours, I am able to schedule some free time during trading hours.)
Last edited:
Thank you all for the warm welcome! I can tell I'm going to like it here.
Similar threads
