IBKR has great margin rates, but I can't abide an algorithmic margin liquidator. Glad I'm with TD Ameritrade.
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Wiki Selling TSLA Options - Be the House
- Thread starter adiggs
- Start date
That was quite the week.
Closed 34x 1275 ccs for 98%. No new position entered.
Closed 40x 800/770 BPS for 60%, couldn't wait longer as I needed to free up the margin to be able to have enough margin to be able to roll two different batches. Due to the sequence of transactions wasn't able to do it with this position open. End result was MORE margin available... but I digress.
Rolled 36x 1110/970 and 130x 1100/1050 to a combined 90x 1100/960. Slightly more margin, but received a chunky credit for doing so. Still have some breathing room (which will keep improving if price action trends up) to then manage that new batch if needed.
I'm quite relieved to see QQQ close above its 5EMA. Seems the trend reversal is in fact in. On the weekly chart, it looks like a nice trend reversal candle, with INSANE volume (highest volume week in more than 5 years). Maybe the bottom was in fact put it in this week and we are our way to ATHs. Time cycle analysis would seem to favor that prediction. Next week should be interesting.
Equally relieved to have seen 795 (support trend line) and 815 (200MA) bounce as support at different moments of the day. We need to regain the 900s to get more comfortable that we're back in to a bull trend, but one session at a time.
EDIT: My brokerage, Questrade, doesn't seem to have a concentration variable in its margin calculator. They say they do, but I've never seen it applied and I'm VERY concentrated. That said, they did increase the margin req % from 30 to 50% during 2020 volatility and have never brought it back to 30%. That said, they offer portfolio margin. So on balance, I end up with more buying power here than I would at IBKR with their black magic algorithm and concentration (and no portfolio margin in Canada).
Closed 34x 1275 ccs for 98%. No new position entered.
Closed 40x 800/770 BPS for 60%, couldn't wait longer as I needed to free up the margin to be able to have enough margin to be able to roll two different batches. Due to the sequence of transactions wasn't able to do it with this position open. End result was MORE margin available... but I digress.
Rolled 36x 1110/970 and 130x 1100/1050 to a combined 90x 1100/960. Slightly more margin, but received a chunky credit for doing so. Still have some breathing room (which will keep improving if price action trends up) to then manage that new batch if needed.
I'm quite relieved to see QQQ close above its 5EMA. Seems the trend reversal is in fact in. On the weekly chart, it looks like a nice trend reversal candle, with INSANE volume (highest volume week in more than 5 years). Maybe the bottom was in fact put it in this week and we are our way to ATHs. Time cycle analysis would seem to favor that prediction. Next week should be interesting.
Equally relieved to have seen 795 (support trend line) and 815 (200MA) bounce as support at different moments of the day. We need to regain the 900s to get more comfortable that we're back in to a bull trend, but one session at a time.
EDIT: My brokerage, Questrade, doesn't seem to have a concentration variable in its margin calculator. They say they do, but I've never seen it applied and I'm VERY concentrated. That said, they did increase the margin req % from 30 to 50% during 2020 volatility and have never brought it back to 30%. That said, they offer portfolio margin. So on balance, I end up with more buying power here than I would at IBKR with their black magic algorithm and concentration (and no portfolio margin in Canada).
dc_h
Active Member
Nice to see someone staying out of the way. I was just making up for a big loss when Elon started his sales in November and wasn't able to roll 5 960-860 BPS. I should have rolled on Tuesday on the rebound, but figured they just needed to read the financials and the stock would rebound. Who know you could have that good an earnings report and choose not to talk about it on your earnings call (sad bitter tears of a loser). I'm still waiting for a rebound to get out of my rolls without a lot of flexibility. This has always been about 5% of my stock, but that is painful too, for now.
Yep, that is sort of what my broker said when I asked about matching IBKR's margin rates. They came back and said, yep, IBKR has great margin rates, but then you have to live with the IBKR system/platform, and offered a fairly competitive rate that was much lower than they advertise to the public.
+1
I've felt this pain. Haven't been exercised, but do most all that I can to avoid. Balancing is key. It took me while to build up cash to back my trades; fewer contracts, better return on each spread, farther away from the money... hahaha, until we got backed in these past two weeks. Fidelity, at every new trade, posts the margin breakout, something like theirs and mine. I take note of it before I commit to new trades. Up until this week, I was trading using mine only. This morning, they pulled 77K back into the margin pool for the same reason above, 30% or more decline in street price of my long TSLA position and the options already backed, well you know what those would look like. They are just playing by the rules we agree to.
Any 3 options I try (closing one of them, closing the pair or closing my shares) gives me an alert that my margin is insufficient.
As far as I can see (while my margin deficit is increasing because the SP is going up) is adding more money (but its weekend so nothing is moving anyway, and takes a day to arrive at IBKR anyway) or hoping for a dip on monday.
I've suddenly turned into a bear.
That... sounds really broken... unless they are pairing with something else like shares on margin.
And sorry on my question phraseology, I edited it, but too slowly.
The drop to 790 also forced my hand as my 20 -p1030 for 2/4 had only $1 time value left, so I decided to roll them out two weeks to 2/18. I got $5.50, so an extra $11k. Not much money for being sidelined for two weeks (sorry, that sounds really spoiled), but better to not take any chances with early assignment. Ofcourse timing sucked again, but I couldn’t risk it. For all you know they could have dumped it to 700.
But here I am being bummed about having my hands tied for two weeks, while others have to roll out to 2024! That sounds horrible. It’s a long time to potentially be stuck.
But here I am being bummed about having my hands tied for two weeks, while others have to roll out to 2024! That sounds horrible. It’s a long time to potentially be stuck.
When I make a bank transfer to IBKR (Lynx) late at night it arrives on my trading account early the next morning, hours before Wall Street opens. So if you make a deposit today, tomorrow or even on Sunday it could take care of your margin deficit in time.
What a month it has been... way too much stress for my liking and because of this I am going to try to take two weeks off without opening new trades. In a way I got lucky compared to others and if I had the balls to waited out until the end of day close today 95% of my positions would have expired worthless, I just couldn't take the stress any more. I ended up with realized losses of $8K counting closing losing position not rolls, I did good with my 25x 1250cc/lcc and ended up with some rolls for next week 850/770, a 1030 put and then some other BPS dated 02/11 to 03/22 with the highest strike at 830 all the way down 770.
Three things that I learned from this week that I am going to try to do are:
Three things that I learned from this week that I am going to try to do are:
- Open 5 DTE trades max even if I don't make much money.
- For an earnings trade I need to make sure that I am at least 25% OTM.
- Be proactive is better to close a position early before it goes bad and take profit early. Hope is not a good choice.
Yeah it's a balance between shares, a bought put and a sold put.
I don't really get the problem, because as far as I can see, the put costed me 6885, and it's current market value is 6695. It's ITM at the moment.
It seems to align that to close this position, I need obviously the difference between 6885 and whatever its value will be on monday. But I have no buying power because of no liquidity.
Once I can sell this put, I have liquidity to buy a put below the -790p as support to improve margin. Or I should have, since if I'm considered rolling the 900p to a 780p I am still looking at something like a 5K margin impact.
Anyway, I just also got a margin call notice, with a value that looks like about what the current negative excess liquidity is. It's less than 200€, still manageable (although I expect it to fluctuate and go up with the SP and expired time) but not fun.
Thanks, good idea and I just did. Only thing is that there isn't any trading going on over the weekend, and I need to neutralise the naked 790 sold put by rolling the 900 put down to below 790, or something.
Ohhh there were a number of moments I could have safeguarded a 30% profit or even limited my losses.
But yeah, enough times my belief was that the market couldn't be that stupid lol. Turns out I was.
OK, I paid 60 cents for immediate deposit and the money is already available in IBKR. 21 minutes. Not bad.
With this in margin, I can close the naked sold 790 put without margin deficit message.
Closing both as a strategy still gives me a margin deficit error.
I see no problem with closing the -790 first , since after the -790p is closed, I still own the +900p and can sell it for about 97% of it's value (but I assume this will drop on monday). That ~6K will go back to my cash, and I will have no sold or bought options left, only cash and stock.
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Now that trading is over for the week and we are all licking our wounds, I thought I would ask for some more non-advice.
I'm sitting on 2x 2/4 -1090/+940 BPS. I rolled these from a 1/28 -1050/+900 last week. I'm ok with worst case scenario of max loss on these. But of course, I'd like to try to salvage if possible. And I am still very bullish and expect the SP to bounce back over the next few weeks/months. This is in an account with low cash balance, so I can't just take the loss and then start over writing OTM BPSs (unless I were to sell some more shares, which I do not want to do). Finally, margin is not an option.
I see these potential plays:
And if I were to go with option #2 (which feels apropos as I feel like #2 after this week), I should probably do it earlier in the week, to minimize chances of getting closed out against my wishes?
Tia!
I'm sitting on 2x 2/4 -1090/+940 BPS. I rolled these from a 1/28 -1050/+900 last week. I'm ok with worst case scenario of max loss on these. But of course, I'd like to try to salvage if possible. And I am still very bullish and expect the SP to bounce back over the next few weeks/months. This is in an account with low cash balance, so I can't just take the loss and then start over writing OTM BPSs (unless I were to sell some more shares, which I do not want to do). Finally, margin is not an option.
I see these potential plays:
- Close out for basically max loss ($29K out of $30K)
- Push up (way up) and out (way out, like out to 2023 or 2024 even) at $0 credit/debit
- Push up and out slightly less for a debit (whatever my cash balance allows). But I see this as just an in-between of the first two and I'm not sure I want to chase this with new money?
And if I were to go with option #2 (which feels apropos as I feel like #2 after this week), I should probably do it earlier in the week, to minimize chances of getting closed out against my wishes?
Tia!
I confess I capitulated today on my short term calls. I thought I could stomach it but being down 8 figures since the beginning of the year (granted most of it in my untouched long term accounts) frazzled my brains.
I had a plan to liquidate all of them post earnings anyway, but obviously not like this. Had been accumulating since the 600 dip last year and had unloaded some for good profit in the 1100 range but not enough.
You should all be encouraged as I have historically been terrible at this. I sold them all in the 850 to 840 range. Took a while….
Left with a bunch of sold puts and some CCs. What a difference between buying and selling options as time grows short.
Look for a rebound next week
I had a plan to liquidate all of them post earnings anyway, but obviously not like this. Had been accumulating since the 600 dip last year and had unloaded some for good profit in the 1100 range but not enough.
You should all be encouraged as I have historically been terrible at this. I sold them all in the 850 to 840 range. Took a while….
Left with a bunch of sold puts and some CCs. What a difference between buying and selling options as time grows short.
Look for a rebound next week
scubastevo80
Member
Hey man - sorry to hear about your positions. We closed out our -1050/+960s after earnings for just under max loss. Was pondering the above scenarios as well, but at the end of the day, I didn't want to try to salvage the position in that way in hopes of a recovery. Rolling slightly out a few weeks or up to say $1100 in 2023 at a stock price in the low $800s doesn't make me feel confident. I'm sure everyone will say "Tesla is great, growing 50%/year, in a few years it will be worth $10k, etc...", but given most TSLA bulls reaction across this thread and the other, the macros can wreak havoc on positions. In thinking through what the fed must do to reduce inflation, we could be raising rates 3, 6 or 10 times over the next few years, in addition to shrinking its balance sheet. This could slow TSLA's rise to the stratosphere and prolong your options pain.
For me personally, I need to stick to my guns on my strategy. Stay 20% out, 5-8 DTE and roll early for strike improvement if in trouble. For opportunistic/YOLO trades, I'll cut losses early. To be honest, I'm still down 50% what I started with in September of last year with 3 pairs of BPS and while I'm fine with 2 of them, I'm considering rolling the 940/800 up and out to Jan'23 980/830 if I can get $10 credit. Thought I had it today but it didn't fill. Good luck!
I’m glad this month is almost behind me. It was a 120K realized loss month with about 50K of that rolled into other open positions.
I had 4X 945 puts that were expiring today. I rolled these out to 920 Feb 18 puts for a decent credit of 10$.
I got lucky with my timing when I sold 500 shares(high average cost but LTCG) around 1040 so it’s not as bad as it seems.
I have a lot of cash from the shares I sold and lot of margin available. My plan is to mostly sell some puts and calls for the next month. Not going to let this month affect my future trades. I’m happy to wait for good spots even if that means it takes 3 months or longer to recover from this.
Strategy for the next few months:
I agree with some of the other comments about margin. I honestly don’t think SP is out of the woods so be cautious. I was listening to a very experienced trader about 1999 and 2008 bear markets. Those were tough bear markets with very successful traders who did not make money for 2 years, markets would bounce for no reason and drop for no reason. I know this market has differences and we already are down a lot….
It’s best to size your positions with a lot of margin for downside protection. I will be reducing my exposure going into weekends.
I had 4X 945 puts that were expiring today. I rolled these out to 920 Feb 18 puts for a decent credit of 10$.
I got lucky with my timing when I sold 500 shares(high average cost but LTCG) around 1040 so it’s not as bad as it seems.
I have a lot of cash from the shares I sold and lot of margin available. My plan is to mostly sell some puts and calls for the next month. Not going to let this month affect my future trades. I’m happy to wait for good spots even if that means it takes 3 months or longer to recover from this.
Strategy for the next few months:
I agree with some of the other comments about margin. I honestly don’t think SP is out of the woods so be cautious. I was listening to a very experienced trader about 1999 and 2008 bear markets. Those were tough bear markets with very successful traders who did not make money for 2 years, markets would bounce for no reason and drop for no reason. I know this market has differences and we already are down a lot….
It’s best to size your positions with a lot of margin for downside protection. I will be reducing my exposure going into weekends.
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