Wiki Selling TSLA Options - Be the House

[strago13]

Got 10x -p925 18/2 I will have to manage soon. I was wondering what is the rational of everyone here.

1) Roll them 1 week out for an additional credit with the same strike price
2) Roll then 1 week without additional credit for an improved strike price
3) Roll then 1 month out for an additional credit and improved strike price

What is your not advice on how to manage expiring underwater positions in a bear market with extreme volatility? I am new to this. I seem to be becoming more newbie every week that goes on actually.

I had a similar position as you.

Not advice. I rolled my 2/4 960 puts to August 19 850 for a credit enough to pay my tax bill from last year. My intent is to roll these back in if we start moving up. It would likely be a April 980/990 strike based on what I’ve seen so far. So in effect I will lose about a month of selling options, but I’m sleeping better and have no risk of assignment now.

If *sugar* hits the fan, I’ll roll to Jan 2024 and reduce the number of contracts by half freeing up margin to take me down to 500. If we hit that number I’ll find every spare penny I have and buy more.

 

[OrthoSurg]

Looks like the uncertainty regarding ukraine is easing up. Putin has retreated some of the forces, and russian military has said that these troops have completed their mission.

This should bode well for the markets, I hope. Premarket is at 903 now, so up around 3% from yesterdays close.

Thanks, that’s explains the +3 premarket. I was planning to roll my -p925 18/2 today but I might wait tomorrow to see what surprise the world brings to us.

 

[juanmedina]

One bit of non-advice, and something I've been thinking about.... cash.

Cash doesn't go down (meaningfully) in a down market. Inflation might get it (a really little, little bit).


Over the last 10 years and on a save-for-retirement plan my answer was own shares with no margin. Up around 160x from the original shares, still 10x from some more recent shares. My own belief is 10x from here by 2030. Whether that is next year or 2030 I can't say. My over / under is 2025 though. So depending on where you are, this is another (my belief) safe and macro/war resistant approach.

Which doesn't provide even a guess at what to do with a mixed option portfolio.

I would like to get more cash but I would like to do that in the 1000's. And like you said what would I do with that cash... BPS? haha.

some of these already at 40-50% profit.. What to do ? Tuesday's are usually crappy days.

I closed my $930-935CC's yesterday and I will reopen maybe more $950's or go with a slightly higher strike. Great Tuesday so far .

 

[vwman111]

If you roll once more, go all out to 2023 or even 2024 so the BPS will be pretty much guaranteed OTM at expiration. Because every roll when underwater takes either debit or extra capital as margin. Jan 2024 we should be over 1050 comfortably I'd say. If not, I'm f-ed

Thank you, I will take a look at the cost to roll out. Since they are completely ITM, it comes with a cost, although less of a cost than rolling weekly.

Have you looked at rolling for a debit and selling calls at the same expiration to offset the cost and margin ?

I'll look into that. I'm not sure i have enough shares to sell enough premium to offset the cost of rolling to the same strike.

Is your lower strike 1050? I was in a similar situation in early January. I modeled the cost of a turnaround for options and also for rolling way out. We ended up taking max loss on our 1050s to avoid throwing more good money at bad, and rolled our 950s up and out to 980s in Jan'23 for a decent credit. Given the expectation of rates rising throughout the balance of the year and further uncertainty, I personally wouldn't roll 1050s up and out unless you're confident we end the year of 1100. Perhaps some of the other smarter guys can weigh in. I tend to look at these as simplistically as I was killing it for 3 months and then go massacred in January when I got too aggressive and held on too long.

1125/1050s i'll take a look at rolling out and seeing how much good money i would be throwing after bad.

 

[Yoona]

PCR drops to 0.66 (finally below 0.7), which is technically a strong bullish sentiment? (more calls being bought than puts)

 

[Discoducky]

https://twitter.com/x/status/1493278025953296393

Would a purchase like that push the SP down on opening bell? That's what seems to have happened.

 

[intelligator]

PCR drops to 0.66 (finally below 0.7), which is technically a strong bullish sentiment? (more calls being bought than puts)

View attachment 769289

https://tsla-oi.s3.amazonaws.com/lt.html

Yes, seems to be the case intraday as well. As we are seeing with call volume, interestingly enough, minutes before the price trends down there is usually a good volume of puts that show up.

 

[wooter]

My 870/820bps 2/18 870/820 are doing well right now, but I have no clue what to do after I'd close this at +50%. So do I wait for 80%? I guess so, because I presume we'll be above 900 by Wednesday but I expect another pullback to 870 leading to Friday because of a call wall at 900.

 

[wooter]

Ahh, found some interesting premiums + low margin impact at 2/18 950/1000bcs. Not sure how long I'll hold this one.

 

[CHGolferJim]

I sold/wrote some $975 CC for 3/18 (at the time $115 OTM) -- is it not-advisable to roll irrespective of date when SP approaches $960, or wait until mid-March to see if they go ITM? I generally don't have a month to stare at my CC's wondering about tactics.......

 

[Yoona]

mid BB is providing resistance (since the last 4 weeks) so perhaps we have a small clue of friday's close? (ie sp won't be above it)

 

[jeewee3000]

Ahh, found some interesting premiums + low margin impact at 2/18 950/1000bcs. Not sure how long I'll hold this one.

Wow, that's ballsy. Close to the money and a small spread. (I know, you have little cash to back up the spreads, but I got burned too many times with $50 wide spreads).

Update on my positions:

I closed my 2/18 -$850p/§750p today for a 50% gain.

My 2/18 -$1050p/$650p was dragging on for weeks but I have a lot of BPS expiring 3/18 so I want to get rid of the -1050 spread by then (to have more cash available to manage the positions in march).

So what I did on the bounce today (SP was $917 I believe):

Closed -1050p/650p @135 (ouch)
Opened 3x 3/11 -820p/720p @13.5 each
Opened 1x 3/04 -820/720p @10.0 (was meant to be a 3/11 but misclicked)
STO 3x 3/04 950cc's @28
All the above cost me just $0.5 (x100). So basically break-even.

Reasoning behind all this:

I think 820 will hold. We might not go sub $850 but if we do, the 200 MA and lower BB could form support around $820. Therefore my $40k cash being locked in as margin will be free by 3/11, the week before I have major BPS expiring (-1150p/1000p and -1050p/900p).

On the upside I picked $950 to sell some calls to fund the BPS split/roll. $950 might very well be broken but this would bode well for my 3/18 BPS. OTOH, $950 might very well not be reached within two weeks if the macros stay troublesome.

The $950 cc's are rollable, and only in the event of a huge TSLA move up I won't be able to keep up with the SP. Should this happen, I won't mind because my 3/18 BPS will be saved or at least rollable at a credit.

What would be the worst case scenario (for my portfolio overall)? A drop below $770 within the next two weeks. Therefore I decided that I will roll the 820/720's the second we drop below $800. This is only possible with deep-red macros, but crazier things have happened.

Not advice, just explaining how I'm getting myself out of a pickle. Let's hope this seems smart in hindsight.

GLTA.

EDIT: corrected the price of the spreads. Off by one decimal.

 

[wooter]

Wow, that's ballsy. Close to the money and a small spread. (I know, you have little cash to back up the spreads, but I got burned too many times with $50 wide spreads).

If you look at a safer 1000/1050bcs, returns are like -0,86 vs a large margin impact. Meanwhile, 950/1000 gave me -6,30 and lowered my margin.

Now, obviously, if we'd shoot up I'd have a problem, but there is still a way to go to 950.

 

[ReddyLeaf]

I sold/wrote some $975 CC for 3/18 (at the time $115 OTM) -- is it not-advisable to roll irrespective of date when SP approaches $960, or wait until mid-March to see if they go ITM? I generally don't have a month to stare at my CC's wondering about tactics.......

That sounds about right, though you might wait until ATM. I have some 905s for this week, and I’m still holding, waiting for the push down. Similarly, holding -p1100s/-c1300s for Sept. Still lots of time value left. These are leftovers from the January crash. I will probably just buyback at a loss instead of rolling because……..

Now is probably not a great time to be writing longer CCs. Over in the technical thread lots of discussion about the collapsing SP triangle action. I’ve been watching the difference between upper and lower BB’s as it continues to decrease (996.77-833.54)/916.53 = 17.8%. Historically, when it gets close to 10% a breakout is imminent, which is often a great time to buy options. I’m still watching/waiting and have a target buy date in mind which I would rather not publish (PM if anyone wants to discuss privately).

Today’s SP rise, plateau and lack of the MMD suggest that the MMs are back in control and happy with the current price, though late week shenanigans are probably in order for Thursday.

Edit: every time I see @Yoona ’s graph I think of some old video games as the incoming missiles all converge.

 

[samppa]

I sold/wrote some $975 CC for 3/18 (at the time $115 OTM) -- is it not-advisable to roll irrespective of date when SP approaches $960, or wait until mid-March to see if they go ITM? I generally don't have a month to stare at my CC's wondering about tactics.......

I rolled my 3/18 $975 CCs to 4/14 $1025 CCs. But my aim is to roll these up to at least around 1100 and then eventually maybe let the shares go. So I'm rolling when these get less than $100 otm.

 

[Yoona]

Wow, that's ballsy. Close to the money and a small spread. (I know, you have little cash to back up the spreads, but I got burned too many times with $50 wide spreads).

Update on my positions:

I closed my 2/18 -$850p/§750p today for a 50% gain.

My 2/18 -$1050p/$650p was dragging on for weeks but I have a lot of BPS expiring 3/18 so I want to get rid of the -1050 spread by then (to have more cash available to manage the positions in march).

So what I did on the bounce today (SP was $917 I believe):

Closed -1050p/650p @13.5 (ouch)
Opened 3x 3/11 -820p/720p @1.35 each
Opened 1x 3/04 -820/720p @1.0 (was meant to be a 3/11 but misclicked)
STO 3x 3/04 950cc's @28
All the above cost me just $0.5 (x100). So basically break-even.

Reasoning behind all this:

I think 820 will hold. We might not go sub $850 but if we do, the 200 MA and lower BB could form support around $820. Therefore my $40k cash being locked in as margin will be free by 3/11, the week before I have major BPS expiring (-1150p/1000p and -1050p/900p).

On the upside I picked $950 to sell some calls to fund the BPS split/roll. $950 might very well be broken but this would bode well for my 3/18 BPS. OTOH, $950 might very well not be reached within two weeks if the macros stay troublesome.

The $950 cc's are rollable, and only in the event of a huge TSLA move up I won't be able to keep up with the SP. Should this happen, I won't mind because my 3/18 BPS will be saved or at least rollable at a credit.

What would be the worst case scenario (for my portfolio overall)? A drop below $770 within the next two weeks. Therefore I decided that I will roll the 820/720's the second we drop below $800. This is only possible with deep-red macros, but crazier things have happened.

Not advice, just explaining how I'm getting myself out of a pickle. Let's hope this seems smart in hindsight.

GLTA.

i was thinking the same thing yesterday and today - hide my future puts at 820 and suspend the 20% OTM rule temporarily

 

[scubastevo80]

Closed BPS this morning when the stock was up 4%, wrote BCS after the initial spike to 915 for this Friday -1000/+1090. Premium was only $1.05, but I don't think we'll have 3 more days of 3%+ up days.

 

[jeewee3000]

i was thinking the same thing yesterday and today - hide my future puts at 820 and suspend the 20% OTM rule temporarily

I'm flattered to be thinking on similar lines as the great 'newbie trader' Yoona.

I went over this in my head last night in bed (when I should've been sleeping). That's when I knew I just had to get rid of these -1050p spreads: the fact that it kept me up at night.

Another one of my ideas was to sell cc's at the same strike as the short put ($820 or maybe $850, current bottom) in order to save something no matter what:
- We'd either be over $820 and I could roll my calls but my put spreads would expire worthless.
- Or we'd end up below $820 in which case I'd have a huge cash influx due to the very agressive cc selling, allowing me to fuel another roll (and then some).

But looking at the numbers I noticed that $820 or even $850 cc's would be overkill (too much credit, too agressive) and it would most likely leave me in a bad spot in case we had green days/weeks (such as today). I then wondered if the $820cc's were a position I would open if I was not in a pickle, and the answer was "definitely not" (I don't sell deep ITM cc's generally, that's financial suicide).

Also, even if I then rolled my$820 cc's, then:
- the odds that I could catch up with the SP after a few rolls would be waaaaay lower;
- those shares would be stuck and I would be unable to sell new cc's against them (for example to manage another position come 3/18).

Long story short: I gave this a lot of thought and it was the best I could come up with (meaning I could find comfort in the many possible outcomes for my personal situation).

 

[BornToFly]

For this Friday - My 750/650 BPS is looking great. My 1000/1100 BCS opened yesterday is just a little Red at the moment. I'm tempted to close it and not risk a close over 1000 Friday, but it seems that most people here don't think 1000 is in the cards this week. Normally I would agree, but if Russian good news continues, we could definitely climb 10% from here in the next three days.... I have to decide if I watch it, or close just the short leg and re-open tomorrow for half the premium if we aren't climbing anymore. Maybe I'll wait and see if we get an afternoon push-down....

 

[SOULPEDL]

Howdy folks So 3x today trying to break through 920 SP. Anyway, I saw some options activity perk up around the 950, so I'm a bit bullish for this week still.
Why I point this out... I have a 700 call expiring Friday. I would rather deleverage it away and just ride my ITM leaps and shares. I guess I'm asking how history plays out on similar weeks while holding an expiring call? Does Thurs get more fun?

(Edit: Now I recall why I bought this. First, Jan/Feb past 2 years had huge upside, and the Valentines Day effect with love in the air!