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Wiki Selling TSLA Options - Be the House
- Thread starter adiggs
- Start date
My massive returns turned into massive losses, so I'm liking your strategy much better right now....Yes, of course, both comments are. I post these updates merely to highlight that a very cautious options strategy can also be rewarding. I certainly envy the massive returns you and others are achieving, but can’t say I would trust myself or be comfortable with the risks.
In addition to my mom's IRA, she has a regular brokerage account where I wasn't doing anything. It is all cash now. I decided to sell cash secured Puts to see if I can make money or get cheaper shares for CCs. No BPSs in that account. Only "safe" "risk free" trading....
Great price and timing, better than what I got selling c955s on Friday. This is an important lesson for new and old. Timing CC sales to a SP peak, especially Mondays, is very advantageous and helps maximize premiums. Also, selling CSP during a SP drop, especially Thursday or Friday for the following week, generates greater premiums.
However, if selling straddles or strangles, time is also important. For example, I received $39 on Friday for my p900/c955 straddle and it was down to $34-$35 the last time checked. Certainly one can do better (waiting to sell the CC this AM would have netted another $5+). Unfortunately, timing & waiting seems to be difficult for me.
Edit: @ChefBoyardee great TA post. I’m guessing $925+/-5 for this Friday, just like last week solely based on MaxPain.
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ChefBoyardee
Member
Tryna read some tea leaves here - seems like we're heading towards 940 for the next few days, and then either hug the bottom of the channel (860-960) or continue upwards (960-1010).
I sold a couple call spreads yesterday and bought back a few put spreads. Just closed the calls and re-sold the puts at 910. I'll probably close em out tomorrow or Wednesday to avoid the potential 860 scenario. If we hit 860 I'll sell puts. If 1010, calls.
I sold a couple call spreads yesterday and bought back a few put spreads. Just closed the calls and re-sold the puts at 910. I'll probably close em out tomorrow or Wednesday to avoid the potential 860 scenario. If we hit 860 I'll sell puts. If 1010, calls.
Well, tbh, I took it in the teeth in 4Q with the mirror image sudden SP rise. Lesson learned was to be much more patient, to roll and wait for SP to come back, I was just too bullish and impatient to convert half of shares into LEAPs (had to uncover the shares). One of the downsides for me in dabbling in options is a desire for daily action.....perhaps the 4Q lesson will have enough lasting sting to get past that.My massive returns turned into massive losses, so I'm liking your strategy much better right now....
Guess I'll do a little play and get a feel what for what running the Wheel is like. Selling a single 2/11 850P nets me $6. Let's see how this goes.
bballshinobi
Member
One strategy I've used when my CC's get blown up is to roll into a much higher strike price call way into the future in order to reduce delta then roll it back if the stock is cooling down.
For example, I had $1,050 CC when the stock shot up to $1,200. Instead of rolling week by week, I rolled them to something like $1,500 for July. This decreased the delta while the stock kept climbing. Then when the stock was struggling to close above $1,150 I roll it back to $1,100 in the same week hoping to catch one of those negative 5-10% weeks.
Nice work sir. Another thing I'm doing is making better use of my margin by buying new shares and selling CCs against those shares. So I'm doing two things
1. Selling puts 8-10% below current SP and recycling them for 20-30% profits when the stock goes up. Rinse repeat and honestly fine if I get assigned.
2. Buying 300-400 shares and selling CCs against them 3-4% out breakeven price. For example, I bought 400 shares today at 917 and sold the 925 calls for 23$. Obviously this does not work if you do not have flexibility to select your tax lots. I might close these CCs later in the week as theta works in my favor. If stock goes up and these CCs end up in the money I'll let them take my shares. This is just some additional profits leveraging my available margin.
No BPS for me, the risk/reward is not what it used to be. I honestly think getting into BPS was a bad idea in retrospect, most of my big losses are due to BPS.
corduroy
Active Member
In my experience, I still think BPS can be done safely. I have not taken any losses with BPS (huge knock on wood). Even with the recent flash crashes and volatility I have been able to close my BPS's for mostly 90%+ profit with minimal rolling. I've done this by being very picky about when I open them - only on strong down moves, and going about 20% OTM. The sweet spot I have found is 3-10 DTE. With these simple rules, I have weathered a lot of gut wrenching drops and come out OK.
Now BCS on the other hand is where I saw my biggest losses ever. I still haven't opened one since Hertz.
Now BCS on the other hand is where I saw my biggest losses ever. I still haven't opened one since Hertz.
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A bit conflicting here what is riskier, BPS or BCS.
Seems when TSLA was shooting up, BCS were riskier as the SP was generally rising.
With the macros now turning negative and the SP retreating, BPS are riskier now.
Is it really as simple as they are about the same, just depends on what the SP is doing ?
Seems when TSLA was shooting up, BCS were riskier as the SP was generally rising.
With the macros now turning negative and the SP retreating, BPS are riskier now.
Is it really as simple as they are about the same, just depends on what the SP is doing ?
I think BPS are safer because, as bulls, we know the SP has a floor but not a ceiling.
After being burned by both BCS and BPS, I'm trying out a new strategy of selling only 1 BCS and 1BPS at the beginning of each week. I'll close the short leg on anything greater than a 70% profit (leaving the long leg to anchor new short positions later in the week). On the losing side, if it doesn't seem like the move is driven by any actual news, then I'd open an additional spread to dollar-cost average the position higher/lower.
I'll keep some margin (and an unused CC) available just in case the short leg stays ITM by the end of the week. I'll miss out on the option income for that one covered call, but I'd get more income from the single iron condor versus a single covered call that's 30% OTM. And in this way, I don't have to worry about rolling the ITM BCS/BPS (but before it reaches the midpoint).
I don't know if this is the best use of available capital and margin, but I _feel_ like I have more control of the trades and am better able to deal with whatever happens with TSLA.
I'll keep some margin (and an unused CC) available just in case the short leg stays ITM by the end of the week. I'll miss out on the option income for that one covered call, but I'd get more income from the single iron condor versus a single covered call that's 30% OTM. And in this way, I don't have to worry about rolling the ITM BCS/BPS (but before it reaches the midpoint).
I don't know if this is the best use of available capital and margin, but I _feel_ like I have more control of the trades and am better able to deal with whatever happens with TSLA.
Cory drew a descending triangle starting with the beginning of the downward trend from the beginning of January. I really don’t like it is heading to the 700s. I really like more your analysis but this week might be the trigger to more bearish trend if we go into the 800s
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My uneducated, inexperienced eye would have us >900 <950 for Friday. The Put wall at 900 and Call wall at 950 forming the boundaries. I've read many times here that MMs are not as inclined to protect Put cs. Call.....so are they just going to
Need to manage some -900/+700 BPS expiring on Friday.... a 900.10 close-by-a gnats-pubic-hair is too close for comfort for me
yes... as long as one is not greedy, BPS is very rewarding. I also have 4 simple rules to keep me focused - they are on my 2nd monitor that displays a huge dashboard.
"Be Patient. Do Not Be Greedy. Do Not Gamble. Do Not Take Unnecessary Risks."
everyone relax, those are made-up numbers for illustration purposes
Tesla is going very sideways since after ER week, between 875 and 950.My uneducated, inexperienced eye would have us >900 <950 for Friday. The Put wall at 900 and Call wall at 950 forming the boundaries. I've read many times here that MMs are not as inclined to protect Put cs. Call.....so are they just going tomanipulatetrade it to stay below 950, with the bottom bound represented by the 200MA or lower BB (around 820) ?
Need to manage some -900/+700 BPS expiring on Friday.... a 900.10 close-by-a gnats-pubic-hair is too close for comfort for me
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As this goes, I expect a pushdown below 900 end of Friday just to fsck some bps holders.
Unfortunately I am starting to agree with you, so I'll look to roll to next week, unless we have a nice green morning and I can close for >80%.
After the almost-margin-call recently, I've decided to close this lot of BPS's representing 1/3 of my normal BPS weeklies, and reduce my margin exposure by 1/3 in the process. Taking a page from @Yoona : boring and safe, not greedy, is the mantra for now...
So I'd prefer to close it, or roll down/out weekly to get to a close quickly.
Nice to have you back!
I also jumped on GOOGL today, bought jan 23 2800 call. And immediately sold 2855 call for this friday expiry.
Serious diversification, one GOOGL option
I'm beginning to better understand LEAPs, interested in the mechanics of these trades. On Fidelity, there doesn't seem to be a trade ticket template to support a LEAP like transaction in the form of a buy/write... writing a CC immediately pairs with long shares.
I am starting to open BPSs again with BCS for Iron Condors. Staying very conservative - 20% OTM. I feel like we are entering a stable, no-news (to push us down dramatically) 6 week stretch where we shouldn't move 20% in a week. But, I also fear a possible pop to the upside if Wallstreet decides to suddenly value Berlin and Austin (even though Elon already said production has started), so the BCSs do make me a little nervous.
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