Wiki Selling TSLA Options - Be the House

[ReddyLeaf]

We haven’t closed yet. My prediction of the 938-958 gap fill was “almost” dead on, so far. I picked up a handful of shares, the lowest one at $952.xx, while I was still sleeping. It’s possible that we continue down throughout the afternoon, so watch carefully. I still have a few more buys set, the lowest one at 924.xx, which had better not fill because that’s the last of my free cash. I need to save something to buyback and roll those DITM 1/28 puts. Edit: I use round numbers (like 1 or 2), just not as large as BornToFly. Next time try setting buys in 100 share increments, each at different prices.

Edit: Ok, @TheTalkingMule I just put in a buy 1/28 c1145s for $4.20.

Ok boys and girls, get buying now! No way this thing is dropping below 950 today. Just changed my 1/28 c1145s for $4.90 and it hit. GLTA.

 

[BornToFly]

Don't get obsessed with limit orders when you have a good idea.

Bought them at 956. Will wait until Monday to sell the CCs. Thank you.

 

[TheTalkingMule]

And I'm done for the week. Loaded to the gills with BPS expiring next week. Gonna leave them be til either a pop to close +75% or Thurs afternoon, whichever comes first.

If I'm gonna push my strikes knowing 4Q is a blockbuster, I gotta stick with the plan. 1/28 BPS are 1000/900, some 1040/940, and a bunch of 1060/960. Feeling ok with that.

Converted some shares to LEAPs and went to the gym. Then heavy drinking to ease my nerves. Is it Wednesday yet???

 

[BornToFly]

I wish I was nearly as relaxed as my dog. I'm wound so tight I might be dropping diamonds in the "pool" later today....

 

[mickle]

This morning when the SP first dropped to near 960, I rolled a bunch of 1/28 BPS 960/760 out to 2/11 930/730 for about $1 credit, just didn't want to worry about what happens early next week.

I also got a bunch of cash out from a mortgage refi on Monday, so throughout the day I purchased 500 more shares averaging about $970. The rest of the cash I'm going to hold for now to allow selling more BPS. I should be able to make about 3-4 times more than my monthly mortgage payment with it.

And thought I'd share my refi story for anyone who might be in a similar situation. I've been mostly self-employed or self-unemployed the last 20 years with random income, so it is very difficult to refinance a mortgage, as they usually want to see a regular minimum income each year for the last 2-3 years. And my income from work the last 2 years has been tiny, while my assets have quadrupled+. My current mortgage balance was only about 5% of my home value, but I didn't see a way to get more out of it from standard lenders.

Over the last 5 year the local Morgan Stanley honeypot would contact me occasionally trying to sell me all sorts of investment products, and I refused all of them. Then a few months ago she mentioned that they do mortgage refinancing, which surprised me a bit. Turns out they will do asset based refi's that don't rely much on income, and due to Tesla shooting up the last 2 years I had quite a bit in stock. And as it turns out a lot of it was in Etrade, which was recently purchased by MS. They offered a pretty good 30yr fixed rate, and by also moving a bit more of my holdings from Fidelity over to Etrade, I was able to lower it a bit more, and lock in a 2.85% refi (back in middle of November), and take out 60% of my home value as cash.

 

[doddiozil]

This morning when the SP first dropped to near 960, I rolled a bunch of 1/28 BPS 960/760 out to 2/11 930/730 for about $1 credit, just didn't want to worry about what happens early next week.

I also got a bunch of cash out from a mortgage refi on Monday, so throughout the day I purchased 500 more shares averaging about $970. The rest of the cash I'm going to hold for now to allow selling more BPS. I should be able to make about 3-4 times more than my monthly mortgage payment with it.

And thought I'd share my refi story for anyone who might be in a similar situation. I've been mostly self-employed or self-unemployed the last 20 years with random income, so it is very difficult to refinance a mortgage, as they usually want to see a regular minimum income each year for the last 2-3 years. And my income from work the last 2 years has been tiny, while my assets have quadrupled+. My current mortgage balance was only about 5% of my home value, but I didn't see a way to get more out of it from standard lenders.

Over the last 5 year the local Morgan Stanley honeypot would contact me occasionally trying to sell me all sorts of investment products, and I refused all of them. Then a few months ago she mentioned that they do mortgage refinancing, which surprised me a bit. Turns out they will do asset based refi's that don't rely much on income, and due to Tesla shooting up the last 2 years I had quite a bit in stock. And as it turns out a lot of it was in Etrade, which was recently purchased by MS. They offered a pretty good 30yr fixed rate, and by also moving a bit more of my holdings from Fidelity over to Etrade, I was able to lower it a bit more, and lock in a 2.875% refi (back in middle of November), and take out 60% of my home value as cash.

This is good info. I am currently refinancing my home to for the same purpose. However with Chase bank and a 75% cash out refinance. My rate is 3.875% ....

 

[ninpb]

And thought I'd share my refi story for anyone who might be in a similar situation. I've been mostly self-employed or self-unemployed the last 20 years with random income, so it is very difficult to refinance a mortgage, as they usually want to see a regular minimum income each year for the last 2-3 years. And my income from work the last 2 years has been tiny, while my assets have quadrupled+. My current mortgage balance was only about 5% of my home value, but I didn't see a way to get more out of it from standard lenders.

Over the last 5 year the local Morgan Stanley honeypot would contact me occasionally trying to sell me all sorts of investment products, and I refused all of them. Then a few months ago she mentioned that they do mortgage refinancing, which surprised me a bit. Turns out they will do asset based refi's that don't rely much on income, and due to Tesla shooting up the last 2 years I had quite a bit in stock. And as it turns out a lot of it was in Etrade, which was recently purchased by MS. They offered a pretty good 30yr fixed rate, and by also moving a bit more of my holdings from Fidelity over to Etrade, I was able to lower it a bit more, and lock in a 2.875% refi (back in middle of November), and take out 60% of my home value as cash.

This is the argument I'll tell my wife why I'm the only one retiring early because of TSLA and that she needs to keep working.

 

[Yoona]

This morning when the SP first dropped to near 960, I rolled a bunch of 1/28 BPS 960/760 out to 2/11 930/730 for about $1 credit, just didn't want to worry about what happens early next week.

I also got a bunch of cash out from a mortgage refi on Monday, so throughout the day I purchased 500 more shares averaging about $970. The rest of the cash I'm going to hold for now to allow selling more BPS. I should be able to make about 3-4 times more than my monthly mortgage payment with it.

And thought I'd share my refi story for anyone who might be in a similar situation. I've been mostly self-employed or self-unemployed the last 20 years with random income, so it is very difficult to refinance a mortgage, as they usually want to see a regular minimum income each year for the last 2-3 years. And my income from work the last 2 years has been tiny, while my assets have quadrupled+. My current mortgage balance was only about 5% of my home value, but I didn't see a way to get more out of it from standard lenders.

Over the last 5 year the local Morgan Stanley honeypot would contact me occasionally trying to sell me all sorts of investment products, and I refused all of them. Then a few months ago she mentioned that they do mortgage refinancing, which surprised me a bit. Turns out they will do asset based refi's that don't rely much on income, and due to Tesla shooting up the last 2 years I had quite a bit in stock. And as it turns out a lot of it was in Etrade, which was recently purchased by MS. They offered a pretty good 30yr fixed rate, and by also moving a bit more of my holdings from Fidelity over to Etrade, I was able to lower it a bit more, and lock in a 2.875% refi (back in middle of November), and take out 60% of my home value as cash.

interesting you mentioned this... someone contacted me yesterday from Scotia Wealth, offering 80%(!) mtg/loc against equity... i don't even bank with them.

 

[Yoona]

Jim - you have learned and earned a lot over the past few months for sure and I am glad for it!

These are exactly the Buy / Writes I have been doing myself for a few months. It is kinda hard to let the shares go the first couple of times but after that it's not as bad.
Great premiums because you are so close to ATM and can roll for strike and premium credit - worst case is you have to hold on to more TSLA shares.... OH NO - lol
Not sure where I was going with this but just glad to see others using the Buy/Write strategy in the bag of tricks.

i got so obsessed with having an all-cash environment, that i totally forgot about this temporary buy/write power play

(just need to remember not to use the additional margin)

i am guessing the only downside is if SP drops further (ie 900), then i will be stuck with shares that i don't want (ie capital tied up until SP recovers) and CC prem won't be as good anymore, amiright?

 

[Knightshade]

i am guessing the only downside is if SP drops further (ie 900), then i will be stuck with shares that i don't want (ie capital tied up until SP recovers) and CC prem won't be as good anymore, amiright?

Yup.... I did buy/write a decent bit as my first dips into options and margin use a couple years ago... works great until a dip and you find yourself stuck with the shares and very little premium till the SP gets back above what you originally bought it at.

I mean, premium never got so low it wasn't paying more than the margin interest- but it was certainly less than I could've gotten selling BPS with the backing.

 

[UltradoomY]

i got so obsessed with having an all-cash environment, that i totally forgot about this temporary buy/write power play

(just need to remember not to use the additional margin)

i am guessing the only downside is if SP drops further (ie 900), then i will be stuck with shares that i don't want (ie capital tied up until SP recovers) and CC prem won't be as good anymore, amiright?

Start small... try it out and see how you feel. It's not so bad!

 

[wooter]

Well, good call I rolled to next week 1000/900bps instead of tonight's 990/890bps.

 

[ChefBoyardee]

Welcome to the sheer panic phase of the selloff. TSLA still holding up better than most growth, but across the board I'm seeing selling that looks way overdone - lots of stocks at or near long-term trendlines. This really feels like capitulation, which means the bottom might be near.

 

[scubastevo80]

If this continues, I may be packing it in boys and girls. Total account down 41% this month on our BPS (no dry powder) - one at max loss, one just breached the upper strike and one about 3% away from breaching the upper strike. I really need some relief next week or I may call it - too much time would be required to make up losses.

 

[intelligator]

Well, good call I rolled to next week 1000/900bps instead of tonight's 990/890bps.

you still have the 990s ?

 

[kabin]

TSLA was holding up pretty well but indexes need to rebalance and Tesla is around 4.7% of the SPY and 3.9% of the QQQ. That's the passive movement. The active is when investors say it's too expensive, etc. We might be at the latter stage now.

 

[corduroy]

Put premiums are the highest I have seen in a long time. It's so tempting to keep going back to the well to open more, but I am at 30% of my margin, which is my limit to carry over weekends. I guess these are the times that our self imposed trading rules are made for.

 

[st_lopes]

Not the rolls I wanted, and still quite annoyed that I didn't do these yesterday and get some meaningful strike improvements. Instead:

• Rolled 170x 1000/950 1/21 BPS to 130x 1100/1050 1/28 BPS for a credit;
• Rolled 36x 1170/1080 1/21 BPS to 36x 1110/970 1/28 BPS for a credit;

Total credit of about $3.5 per new BPS.

Also sold a 40x 800/770 BPS for $1.85 cr and rage sold 1275cc yesterday (I DARE YOU TO TAKE THAT ITM).

If this isn't the bottom and we don't see a reversal next week, I will be needing to dip in to reserves to continue management.

 

[wooter]

you still have the 990s ?

No, I was thinking yesterday whether to roll my Jan21 1000/900bps to Jan21 990/890bps, but I decided to roll them to next week Jan28 1000/900bps.

 

[EVCollies]

Grabbed a few 1/28 BPS -p950/+p650 @49.05