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Wiki Selling TSLA Options - Be the House
- Thread starter adiggs
- Start date
MaxPain chart is currently showing SP close near $910-$915, what a coincidence. Still happy with my 900p/955c strangle, slowly decaying away at ~50%, almost like watching water drip. In other non news, I just calculated that I “have” reached my share goal (but only IF I could completely unravel all my long-dated puts). Not really expecting that this is a true estimate, but it’s nice to see that I’m closer after the Hertz fiasco. I suppose it makes sense because we’re back, filling the 900-950 gap from 10/22-25/2021 just prior to the Hertz runaway.
Maybe close tomorrow before CPI data released Thursday morning in case that drops the SP?
Similar , opened Monday , thinking a close would be a good move on this small & profitable spread. I may have done better by not bothering with an 810/710 for 2/18, instead could have used the margin for this week.
oh, for daytrading my -p is more aggressive and only 10% of open contractsThat's really far from 20% OTM
Times like this are the best to sell options....little to no volatility. Its a shame I am sitting on the sidelines until we have a big move up and or its August!
scubastevo80
Member
I'd rather sell with volatility, so we can profit from the IV collapse. Selling BPS right now with low vol ahead of a potential big downward move with induce lots of tears. Rather be a buyer of options if IV is low enough.
jeewee3000
Active Member
Didn't want to give you an explicit "disagree" but @scubastevo80 is correct: when IV is low you want to buy options generally. When IV is high, selling options is the best game in town.
When IV is high even 20% OTM pays well. With low volatility you either accept smaller returns or you seek closer (more dangerous) strikes.
No disagreement that when IV is high is when we should be selling options. The nice part about these last 2 week is that we are stuck in a channel and not having 20%+ swings. THAT is the sweet spot IMO. This should last for a few weeks until IV follows.
I agree with both observations. My only addition, and it might be an indicator of how generally inefficient I am at all of this - my best month, comfortably, was last summer in the middle of the low IV / sideways trading. I like sideways trading, especially when we're closer to the lower edge of the trading range, as I can be more aggressive with put sales which is historically where I make the most.
The low IV will tend to come along for the ride and with TSLA, low IV is relative. I'll take that too.
Short update: closed 1/5th of my -900/+700 for just over 80% profit, then then next 1/5th for just under 85% profit before the daily afternoon walkdown began. Have laddered GTC sell orders in for the remaining 3/5ths at 88%, 90% and 92% profit.
If we continue like this (and Thursday CPI data doesn't cause the market to sh*t it's pants) I'll be very happy indeed.
If we continue like this (and Thursday CPI data doesn't cause the market to sh*t it's pants) I'll be very happy indeed.
BrownOuttaSpec
Active Member
I was laying in bed last night and I had a thought and was hoping you guys could help. With as much as we watch "Max Pain" every week could we influence that number with BCS and BPS to push it in the direction we want?
For example opening tiny $10 spreads way above anything reasonable (+2 STD). So we open a bunch of tiny BCS in steps that don't make any money (due to commission) but push the "Max Pain" price higher?
1000x BCS +1180/-1170 and +1210/-1200
Of course this would need buyers and sellers but we do this anyway when we buy each others legs on BPS. Maybe this is what HF/MM do?
For example opening tiny $10 spreads way above anything reasonable (+2 STD). So we open a bunch of tiny BCS in steps that don't make any money (due to commission) but push the "Max Pain" price higher?
1000x BCS +1180/-1170 and +1210/-1200
Of course this would need buyers and sellers but we do this anyway when we buy each others legs on BPS. Maybe this is what HF/MM do?
You aren't concerned about Ukraine? With how risk averse the market is I have a hard time not seeing some panic selling pushing us into a bear market if Russia invades.
bkp_duke
Well-Known Member
Perhaps I'm wrong on this, but my understanding is that "way" OTM calls and puts don't have a lot of delta, so it takes a real ton of them to move things. For this strategy to work, they would need to be pretty close to the share price, I think. And of course, we would need a @#$% ton of them given how big the TSLA options market it.
I close everything I make +50% intra day.
sold 1050 18/2 CCs this morning after closing my 1045 CCs for 80% profit .
already up 20% on the new position and I am hesitant to close already but I think it’s premature
I'm not trading this, just want to take opportunity to follow along and learn. My concern is having to sell shares, less about having shares put to me. From a profitability standpoint, most all will balance out between 850 and 950. But at a 930 stock price, there would be little premium left in the short call. Same with price at 870, the put would be in play. The risk of being called becomes real. I get that ideally we'd want the week to end at 900 or so.
Would the management of this require closing one leg once well in the money or close the position as whole at that point? Am I thinking about the above correct?
scubastevo80
Member
Same for us. I was great at taking our 50% in a day on opportunistic trades, but not so great on cutting losses when they went the other way in 1 day. In January, several of those trades went from where I should have closed them to being down several hundred percent, including two max loss trades.
chiller
Member
I tried to swing trade the same options when I felt the stock would turn yesterday and today.
3.88 per contract gained in a couple of trades. It is now worth 0.95, so I've still done better than sell and hold.
3.88 per contract gained in a couple of trades. It is now worth 0.95, so I've still done better than sell and hold.
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