Just FYI: When repeatedly selling / buying the same options position, be prepared to have your broker recognize any losses on those contracts to be subject to the wash sale rule.
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Wiki Selling TSLA Options - Be the House
- Thread starter adiggs
- Start date
Just FYI: When repeatedly selling / buying the same options position, be prepared to have your broker recognize any losses on those contracts to be subject to the wash sale rule.
If they are only 3-10 DTE that won't matter for long though, yah? No equivalent position after the 11th in this case.
One's "hoping" the SP closes on Friday close to the strike in order to gain from both sides, but as part of my general risk-management, if a position goes 50% profitable within a couple of days, with several DTE remaining, then I close out, wait for a better re-entry. Obviously some risk that the SP keeps going, so no favourable re-entry and the other side of the trade goes deeper ITM. In that case I would be looking to roll the ITM, but reopen a position for the original strike on the losing side, to recuperate a few $$$ of Theta
And in this case, the puts wen't more than 50% into profit, so closed them out, was looking to resell at close as the Nasdaq has dumped in the final 30 minutes the previous 4 closes, but today it decided to do the opposite. Will see tomorrow...
I am concerned about Ukraine, but with the SP so low, I don't think it would drop more than 20%. That being said, on war news, I would probably close the short leg and keep the long leg open, especially if it happens early in the week.
I think I will close all my BPS positions tomorrow afternoon so I'm risk free on the down side Thursday morning. Based on the market reaction at the open Thursday, I might re-open a few trades for Friday expiry.
The way it was explained at option alpha course if I remember well is to close the profitable side and open a position closer ITM on the winning side with the same expiration date. This will indirectly move up profitability of the losing side without having to close the losing side yet. Once the SP has moved too much against you, you either roll the losing the position further out and adjust the strike according to the delta wished or they either close the entire position and open a new one that you would be comfortable with in the first place.
Zhelko Dimic
Careful bull
I disagree this is cautious...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.
chiller
Member
Thanks for looking out for others, but I believe that is a US-only silliness that does not affect me. (We have our own set of silliness here)
On this green day, the 2/11 BPS closed @0.3 debit. If we have a red day will open another 1.5-2% (3-4 with 200 spreads) BPS, probably 2/18 but might be 2/11 for a large drop.
Still holding onto the other BPS hoping to close them out in a week or two, but I'm ever the optimist.
I am in a similar situation with a 2/18 1,000/800 bps
If you have spare margin, you could split the 1,000/800 bps into 2x 930/730 bps for a modest credit. This doubles your max loss, but the new positions would be more likely to expire OTM or rollable for credit.
scubastevo80
Member
BTC order out for our 2/11 -840/+790 BPS which are up 90% as we speak. I'd like to be out of everything until after today's Fed speak and tomorrow's CPI numbers. Will look to establish 2/18 BPS or BCS depending on whether we get any 3% moves and IV spikes on Thursday or Friday.
Still debating on bull call spreads at +1000/-1200 for July (bet that we go higher after 2 positive earnings reports), but I'm uncomfortable that all the macro troubles are not fully priced in.
Still debating on bull call spreads at +1000/-1200 for July (bet that we go higher after 2 positive earnings reports), but I'm uncomfortable that all the macro troubles are not fully priced in.
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The 88% profit GTC filled in the run-up to close yesterday. Happy to see that. Leaves 2/5ths of the position to deal with before tomorrow ideally.
GTC 90% and 92% profit orders are in. Hoping for a strong open.
Then, I'm going to look for a good entry for CCs - also looking at an Iron Condor to enter after the market digests today's FED and tomorrows CPI numbers. Also: Always within the @Yoona rules
Edit: The morning jump allowed me to close the final 2/5ths of the 2/11 -900/+700 BPS for around 95% profit. Super happy, considering this one has been rolled for many a week and caused me blood sweat & tears during the recent foray into the 700s...
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I've set up my positions also to close at 90% profit, and my 840/825 already closed.
What would the impact be on my margin if I would get out of TSLA stocks and go cash only? I imagine it is positive on bps since the value doesn't drop if the stock drops, but I also imagine it is not that good for bcs.
What would the impact be on my margin if I would get out of TSLA stocks and go cash only? I imagine it is positive on bps since the value doesn't drop if the stock drops, but I also imagine it is not that good for bcs.
jeewee3000
Active Member
Wanted to open some cc's on the open today, but instead of selling many small ones (the premiums are quite low) I sold one agressive one close to ITM (950cc @15) for this friday, with the intention of buying it back later today.
So far so good, already at 30% profit.
ATM calls have higher theta and theta decay, therefore they serve better as daytrades IMO. If it were to go wrong I can split the cc into many smaller ones.
So far so good, already at 30% profit.
ATM calls have higher theta and theta decay, therefore they serve better as daytrades IMO. If it were to go wrong I can split the cc into many smaller ones.
I have a feeling the SP isn't going up soon, at least not fast. But a 30-40 point rise is not impossible, so for me your 950 strike would be too close for comfort. Still, you probably made the right bet.
I sold 10 c1060 2/18 yesterday for $3.00. That was at 902. A day later we are at 927 and still they have already lost some value.
Same for the 20 c1030 and c1040 2/11 sold last Friday. Those already lost 80% of their value in three trading days. But not buying them back, I prefer to let them expire.
I bought mines back yesterday to sell more CCs for next week. I was hesitating to leave them open to squeeze the last 20% juice out. Curious why you don’t close then earlier to sell more for next week?
I can understand you bought them back to be able to sell new ones for next week (because those will lose more value), but I'm not limited by margin or the number of shares, so I can afford to let them expire. It doesn't prevent me from opening new positions for next week, which is what I did yesterday. If we go up this week, I'll sell even more.
I've been poking around in IBKR's What-If and yes, as predicted, losses are less when not holding stock and the SP goes down, but losses are higher when SP goes up.
However, since everything is connected, the bcs require or the bps or the stock to prop up margin. So I think it's safer to exit the stock, have the positions expire or reach whatever I'm happy with (my 1020/1060 just reached 90% and btc) and maybe consider iron condors instead of building separate spreads which might react against each other.
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