Wiki Selling TSLA Options - Be the House

[wooter]

I'm looking at 950/900bps this week and I do not see an urgent reason to bail out - but then again, last week I was sure of 1030 so there's that.

1000/900 I'm on the fence between rolling or keeping.

However I see some volume at 950 which impacts both positions... Sigh...

 

[jeewee3000]

Chiming in since nothing I thought would happen did...... my bad all - no FOMO rally this week.

That being said, I think that it bodes well since there hasn't been a buy the rumor, it's hard to sell the news.
Could very well happen but I don't see it after tonight.

I am holding a bunch of $1125 P's that are a bit under water at the moment.....
A bunch of 02/18 $1150's also a bit under.... (bought these at $30 - currently $20)
Just opened a ton of -$850 / +$750 BPS' for $9 each with 2 DTE and IV crush coming up in about 8 hours.

Very satisfied with these positions since I can roll the sold puts out indefinitely and the bought calls up and out as well for time.
Margin use holding steady at 30% - it was under 20% before todays open of BPS

Stick with the plan! My $1125 P's still have over $5 of time value left in them at least until tomorrow morning when I will have to think about things.

Allow me to follow in your footsteps.


Opened 1/28 -850p/+750p @8.5. Rollable for a credit 'till $800, which I deem unlikely.

Also sold some 1/28 1250cc's @1,05 each, to play IV crush. Now I promise I'm not touching my positions anymore .

 

[ChefBoyardee]

If people are holding ITM put spreads for 1/28, just know that the high IV is keeping them alive right now. If they're still ITM tomorrow, the IV crush will take em to near max loss. You basically are holding earnings OTM call spreads, and hoping the SP ends up above the midpoint during/after the IV crush. (I'm not saying to roll or not roll, just an FYI.)

 

[intelligator]

If people are holding ITM put spreads for 1/28, just know that the high IV is keeping them alive right now. If they're still ITM tomorrow, the IV crush will take em to near max loss. You basically are holding earnings OTM call spreads, and hoping the SP ends up above the midpoint during/after the IV crush

Was going to ask similar, or maybe it's different. I have several 950 and 900 short legged 100+ wide spreads, that seem likely for the premium theta burn will not be enough to make a dent. In terms of expiry on the 28th, are they considered worthless if the closing price is, say 975? Meaning, what about the premium left in the spread? Do I keep the credit in that case?

Apologies if this is a newbie thread question instead.

 

[ChefBoyardee]

Was going to ask similar, or maybe it's different. I have several 950 and 900 short legged 100+ wide spreads, that seem likely for the premium theta burn will not be enough to make a dent. In terms of expiry on the 28th, are they considered worthless if the closing price is, say 975? Meaning, what about the premium left in the spread? Do I keep the credit in that case?

Apologies if this is a newbie thread question instead.

Yeah if the SP closes above the short strike at the end of Friday's after-hours trading, they'll expire worthless - you would keep the full credit

I always recommend closing them before market close on Friday for a few cents just in case we tank after-hours

 

[Drezil]

If you look at the premium for the 1100, and subtract the current SP from 1100, you will see there is almost no IV value in those. There is in the 900s. So I think IV crush will actually hurt you, not help you on the 1100/900s, if the stock is between 1100 and 900 tomorrow.

IV-crush will ALWAYS help you if your spread is over the midpoint & hurt you if you are under the midpoint
Thats how the math works

 

[wooter]

Was going to ask similar, or maybe it's different. I have several 950 and 900 short legged 100+ wide spreads, that seem likely for the premium theta burn will not be enough to make a dent. In terms of expiry on the 28th, are they considered worthless if the closing price is, say 975? Meaning, what about the premium left in the spread? Do I keep the credit in that case?

Apologies if this is a newbie thread question instead.

If the closing price is 975 and you have sold 950 and 900 puts, these puts have not met strike price and can't be assigned. You keep the full credit.

And indeed, if after hours the stock tanks below strike price, you can be on the hook anyway.

 

[jeewee3000]

IV-crush will ALWAYS help you if your spread is over the midpoint & hurt you if you are under the midpoint
Thats how the math works

Problem is my midpoint for many BPS is $950.

I decided I'll let them ride. We'll worry about them later

 

[Drezil]

Strategy i have for powell today:
Hover my mouse over a BTC Market-Order for the short-side of the last BPS for friday. Sell fast if we tank, reopen at "bottom" as an earnings play or close the short-side if i see a titanic-like event.

 

[wooter]

On a global level I see market is green, and QQQ +1,8%.

So is the market buying what they oversold on monday, or...?

 

[vikings123]

Anybody experiencing order fill issues with IBKR, quick glance on twitter seems to suggest it's impacting a lot of users. I cannot seem to sell

 

[Right_Said_Fred]

I sold 5 calls 1270 and 5 calls 1285 for 2/4, at @3.00 each (during the upswing). These are 33 to 35% OTM and with 8 trading days to go I feel confident about them. I expect Tesla to exceed expectations, but the stock also to sell the news. Combined with the tricky macro environment I don't see it rising above ATH in such a short period. IV crush will also be big after tomorrow.

I'm not sure if I timed it right, because Powell can push the market up later today. But I still feel safe enough.

I'm also short 20 puts 1/28 and 2/4, so I'll still be happy if we go up a lot.

 

[Right_Said_Fred]

Anybody experiencing order fill issues with IBKR, quick glance on twitter seems to suggest it's impacting a lot of users. I cannot seem to sell

Here too. I was able to sell calls for 2/4 but not for 1/28. IB accepts the orders, but doesn't execute them.

 

[vwman111]

If people are holding ITM put spreads for 1/28, just know that the high IV is keeping them alive right now. If they're still ITM tomorrow, the IV crush will take em to near max loss. You basically are holding earnings OTM call spreads, and hoping the SP ends up above the midpoint during/after the IV crush. (I'm not saying to roll or not roll, just an FYI.)

That is interesting and likely something not many of us have considered. What are some suggested approaches to leverage the high IV before it gets crushed while attempting to manage a ITM spread? There are 3 possibilities based on what ITM spreads one is holding:
1. price rallies and ITM spread becomes OTM and expires worthless on Friday.
2. price rallies and long leg is ITM but short leg remains OTM on Friday - this needs to be managed/rolled. Question is before IV crush or after.
3. price rallies or falls and ITM spread remains 100% ITM - this needs to be managed/rolled. Question is before IV crush or after.

 

[intelligator]

Yeah if the SP closes above the short strike at the end of Friday's after-hours trading, they'll expire worthless - you would keep the full credit

I always recommend closing them before market close on Friday for a few cents just in case we tank after-hours

That's just the concern, I can't close for pennies. These were rolled into spreads, probably why the still have a lot left.

Okay, thanks to all, this answered my question. After hour risk on the 28th will be the remaining concern.

 

[TheTalkingMule]

Was going to ask similar, or maybe it's different. I have several 950 and 900 short legged 100+ wide spreads, that seem likely for the premium theta burn will not be enough to make a dent. In terms of expiry on the 28th, are they considered worthless if the closing price is, say 975? Meaning, what about the premium left in the spread? Do I keep the credit in that case?

Apologies if this is a newbie thread question instead.

Want to make sure we're clear on this one so the "not advice" is accurate. When you refer to "950 and 900 short legged 100+ wide spreads", these are $950/$850 and $900/$800 spreads correct?

If so, then yes......a $975 close Friday does expire both ends worthless and you simply keep whatever credit you sold the spread for. Just wanted to make sure you weren't talking about $1050/$950 spreads. Sometimes folks express the short and long ends backward.

 

[intelligator]

Want to make sure we're clear on this one so the "not advice" is accurate. When you refer to "950 and 900 short legged 100+ wide spreads", these are $950/$850 and $900/$800 spreads correct?

If so, then yes......a $975 close Friday does expire both ends worthless and you simply keep whatever credit you sold the spread for. Just wanted to make sure you weren't talking about $1050/$950 spreads. Sometimes folks express the short and long ends backward.

Correct. -950/+850, -900/+800, -890/+790 BPS.

Thanks for clarifying.

 

[TheTalkingMule]

Is there a good, cheap, Call to buy for 2/4 that would 10X with an SP jump from 1000 to 1100 in the next two days?

We're settling into the doldrums waiting for Powell to speak and you may just get a window to buy. Shooting for a 10x with IV where it stands is going to be very very difficult, but you could give it a shot if the price is right.

I'm keeping an eye on $1050c for 2/4. It's sitting around $22 and I'd be interested at something closer to half that. Maybe the MM algos go for a major pushdown before Powell and we get some bargains.

With the IV crush it's likely not worth it, but I consider $1050 pretty safe for next week. Or as safe as a 11.5% OTM wildly expensive 7.5 day call option can be!

 

[bkp_duke]

Not great volume this AM. It's letting the hedgies walk down the gains from opening.

Looks like everyone is waiting with baited breath on the Fed . . .

 

[stealthyc]

Not great volume this AM. It's letting the hedgies walk down the gains from opening.

Looks like everyone is waiting with baited breath on the Fed . . .

Just because most people don't know it, and not trying to be overly pedantic, but the phrase is "bated breath"