Wiki Selling TSLA Options - Be the House

[Chenkers]

I have plenty of BPS rolled or opened last week that are doing really well, so no need to add too much more. I particularly won't be looking to open any BCS at this point. We could see some choppy trading early in the week followed by a larger rise once institutions have had time to digest the news and start buying in earnest. This could put any BCS opened too early into very dangerous territory.

 

[Yoona]

1138!

waiting to STO 1/14 -p950...

i will be cautiously optimistic for now and stay weekly. Why? It's because i still clearly remember the 1st 3(?) weeks of 2021 where SP spiked from 720+ to 900. I was "earning" my annual salary on a daily basis. Then, SP crashed and it took 9 months to recover. I lost $550k that Jan due to not understanding the mechanics of rolling when under duress. Traumatized rookie!

 

[Drezil]

1138!

waiting to STO 1/14 -p950...

i will be cautiously optimistic for now and stay weekly. Why? It's because i still clearly remember the 1st 3(?) weeks of 2021 where SP spiked from 720+ to 900. I was "earning" my annual salary on a daily basis. Then, SP crashed and it took 9 months to recover. I lost $550k that Jan due to not understanding the mechanics of rolling when under duress. Traumatized rookie!

Sounds like my story

 

[OrthoSurg]

1138!

waiting to STO 1/14 -p950...

i will be cautiously optimistic for now and stay weekly. Why? It's because i still clearly remember the 1st 3(?) weeks of 2021 where SP spiked from 720+ to 900. I was "earning" my annual salary on a daily basis. Then, SP crashed and it took 9 months to recover. I lost $550k that Jan due to not understanding the mechanics of rolling when under duress. Traumatized rookie!

My only trauma are my AAPL 155 covered calls I am currently rolling till the end of times.

Props to the guy on Twitter who bought 300k of $1150 TSLA calls for 7/1. What an incredible gamble. I am loaded with Puts I sold with strikes in the 800s. I think I will BTC all of them today.

+7% pre market is savage

 

[charlesgres]

If I opened an almost ITM put spread, I would use a wider spread. $200 or even $300 wide. Then the long leg becomes so cheap, that even if stock moves against you, you have a lot of room for rolling.

But widening a spread (rolling the short leg up or the long leg down) always nets you credit.. So if your spread is too narrow, you can widen it with a profit, either same expiry or the next, separate action or as part of the rolldown of the spread..

Unless you no longer have the freedom to increase your margin requirements..

And then again if you roll down only the upper part of your spread, and have the lower part safely expire, you can get to a better position while increasing margin only temporarily..

Or am i missing something?

 

[juanmedina]

Now I'm really considering buying some lottery tickets.. say 1100 calls for february 4th.

Don't usually buy options, but earnings will be awesome.

Amazing numbers! Go Tesla!

I am thinking the same but maybe for Feb 18th and a little OTM. Any thoughts @adiggs ? I value your opinion. Thanks.

 

[OrthoSurg]

I am thinking the same but maybe for Feb 18th. Any thoughts @adiggs ? I value your opinion. Thanks.

I don’t know by how much Calls premiums is going to increase by the time the option chain updates at the market opening however the volatility might spike through the roof.

 

[samppa]

But widening a spread (rolling the short leg up or the long leg down) always nets you credit.. So if your spread is too narrow, you can widen it with a profit, either same expiry or the next, separate action or as part of the rolldown of the spread..

Unless you no longer have the freedom to increase your margin requirements..

And then again if you roll down only the upper part of your spread, and have the lower part safely expire, you can get to a better position while increasing margin only temporarily..

Or am i missing something?

widening the spread will increase your potential max loss. so essentially you are digging a bigger hole for yourself. If stock keeps plummeting, it's not hard to find oneself in margin deficit.

that's how I got into deep trouble with some put spreads..

my rules for rolling, and this year I will really really really abide by them: (not-advice, each to their own)
- aim to roll for minimal credit and maximum strike improvement
- never throw more good money after bad, so never widen spreads
- if I do not like the new position after rolling, then close with a loss instead of roll.
- also I'm considering rolling bps when still otm, say when my short strike is around 0.4 delta. Depends.

 

[strago13]

I am sitting on 1/7 990 Puts which I think will be 70-80% profit on open. I am likely going to BTC and open 1/14 or 1/21 990's in lieu of the 1/7's. Fingers crossed the premiums are worthwhile. I do NOT want to chase the SP as we find a new ceiling and subsequent floor. I agree with @BornToFly it is around 1000 currently, but that will likely readjust after earnings.

Good luck to all and Happy New Year!

EDIT:

BTC 1/07 990 puts at 76% ($1.95)
STO 1/14 990 puts at $7

 

[BornToFly]

But widening a spread (rolling the short leg up or the long leg down) always nets you credit.. So if your spread is too narrow, you can widen it with a profit, either same expiry or the next, separate action or as part of the rolldown of the spread..

Unless you no longer have the freedom to increase your margin requirements..

And then again if you roll down only the upper part of your spread, and have the lower part safely expire, you can get to a better position while increasing margin only temporarily..

Or am i missing something?

We typically use narrow spreads to sell more contracts with the available cash/margin. It makes no sense to use a narrow spreads if you have the cash for a wider spread at the start, because the long leg is costing you more and you are wasting money (It costs more to buy a 900 than a 700 for a +900/-950). I had my friend, who is new to selling options, use 500/900 spreads the last couple weeks, because the 900s act more like naked puts, and he can only do 1/4 the total number of contracts that he could if he was selling 800/900s (which means he can get into less trouble). In the beginning, he was doing fewer contracts and only putting some of his money at risk. As he started making money, he immediately wanted to do as many contracts as possible and use all his cash. The wide spreads are offering some protection. Hopefully he doesn't go off the rails and start doing 8X as many contracts with just $50 spreads instead of sticking with the $400 wide spreads (I feel like he still has limited understanding of how option selling works, and has never had to roll an ITM position yet)....

 

[TheTalkingMule]

Moved out to 1/21 so as to avoid the need to micro-manage over the next 3 weeks.

BPS $940/$1040 @ $14
BPS $960/$1060 @ $17

Hoping this is a little profit taking dip for the pre-market traders and the FOMO will kick in hardcore later today or this week. With any luck I can close these out middle of next week with SP at $1225 or roll them in the last week if everything reverses.

 

[scubastevo80]

What a morning! We closed both BPS shortly after the open (up 80-85%), and wrote a 1/7 -1350/+1450 shortly after the open and -1400/+1500 about 10 minutes later. Those were just closed after the IV seemed to turn around at 50-55% profit. We're up 4%+ on the week and will look to write more BPS if we lose some steam here.

 

[jeewee3000]

Happy new year, all.

I had some 1100cc's expiring this friday (didn't sell these last week, been rolling 'em for some weeks).

I decided to split the risk by doing the following:
1/4 of them I rolled far out (to march 18th 2022 1300c's for a slight credit)
1/4 of them I split into two 21jan2022's: a low one (1175c) and a high one (1350c).
1/4 of them I split into three equal 14jan2022's: 1250c's
1/4 of them I left alone to see what will happen this week. Might let it expire actually, to take some gains on the stock. (derisking my portfolio basically, in case we get a recession or something).

I'm not even stressed about it. If all exercise in due time, I'll have had huge gains and will revert to selling a mix of puts and BPS.

It's quite the expirement to see what works and what doesn't.

Here's to staying calm in 2022! (I might be calm because my ITM BPSes are now all OTM again, and I bought some back already at huge % gains).

 

[Flehmenlips]

I am sitting on 1/7 990 Puts which I think will be 70-80% profit on open. I am likely going to BTC and open 1/14 or 1/21 990's in lieu of the 1/7's. Fingers crossed the premiums are worthwhile. I do NOT want to chase the SP as we find a new ceiling and subsequent floor. I agree with @BornToFly it is around 1000 currently, but that will likely readjust after earnings.

Good luck to all and Happy New Year!

EDIT:

BTC 1/07 990 puts at 76% ($1.95)
STO 1/14 990 puts at $7

I am thinking of doing the same with my 07 Jan +920p/-1020p BPSs. They are at 85% profit, well above my target. I also have a 21 Jan +890p/-1090p at 40% profit that I am not comfortable holding. I might BTC that one as well and reconsider a new trade.

 

[Knightshade]

I closed all my BPSes (some -995/+895, some -950/+850, all opened late last week) for 85-90% profit this morning at ~1160....


Was super tempted to write calls OTM at that point, but just too many potential things could jack that up (announcing Austin production or gamma squeezing from everyone buying lotto tickets, etc).

Not sure what to do at this point with all the freed up funds, really wanna stick with weeklies but put premiums for 1/7 are trash now so guess I'll wait till later in the week and see how 1/14 starts shaping up

 

[Tempus]

My Jan 7 800-950's were all 98% profit this morning, so those are now all closed. Looking for a good point for re-entry, likely for the 1/14's. Looking at 850-1000 (had been doing 100 wide spreads, should probably be at 200-wide - need to see how much widening impacts my available margin).

 

[BrownOuttaSpec]

My Jan 7 800-950's were all 98% profit this morning, so those are now all closed. Looking for a good point for re-entry, likely for the 1/14's. Looking at 850-1000 (had been doing 100 wide spreads, should probably be at 200-wide - need to see how much widening impacts my available margin).

I did almost the same thing with the 1/7 BPS and eyeing a spread about the same price and range as you. Waiting for a dip to buy in this week, but I really dont think there will be much of one so might just put the order in today.

 

[wooter]

I still have one 1/7 1045/870bps open, and am thinking about sto 5x1300/1400bcs, but I think I better shouldn't? Handicap with good bps options is that most of my buffer are TSLA stock which also diminish in value if the bps are getting ITM.

 

[intelligator]

I still have one 1/7 1045/870bps open, and am thinking about sto 5x1300/1400bcs, but I think I better shouldn't? Handicap with good bps options is that most of my buffer are TSLA stock which also diminish in value if the bps are getting ITM.

Got burned by running out of margin just after dipping my toes in BPS trades past November... had to sell shares, albeit at a loss, to roll out of trouble, avoiding more loss. Now I make use of my broker's tool to model drops of 20-30% , leaving myself enough headroom to operate.

 

[BornToFly]

I rolled half of my BPS to next week - 850/1050.
Hertz week had a sharp rise partly because of a Call induced gamma squeeze. I'm sure people are buying OTM calls like crazy, and will be all week, for the ER. This should cause another large pop in the SP in the next few weeks.