How many Investor’s liquidated their TSLA holding to sell and buy options only during this volatile market? Does it have a significant impact on the TSLA share price. TSLA being 50% of the overall option market probably lured a lot of people in.
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Wiki Selling TSLA Options - Be the House
- Thread starter adiggs
- Start date
(newbie thinking of trying out the Wheel for the first time)
can someone pls confirm? assume static prices to keep it simple, TIA!
STO 3/11 -p750, $40 credit
if sp >=750, expire worthless
else
if sp suddenly moons to 1000, so what? just repeat the wheel
if sp drops to 650, STO CC -c710 at the very minimum
what am i missing?
can someone pls confirm? assume static prices to keep it simple, TIA!
STO 3/11 -p750, $40 credit
if sp >=750, expire worthless
else
- forced to buy shares @750, cost basis 710; if sp=650, roll the 750 early
- STO CC 3/18 -c900, $10 credit 5 DTE
- "keep getting $10 weekly" until sp >=900
if sp suddenly moons to 1000, so what? just repeat the wheel
if sp drops to 650, STO CC -c710 at the very minimum
what am i missing?
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As sh price continues to drop your cc premium shrinks considerably. If you're not using margin then you simply wait it out until the sh price hits your cc strike and you're back to selling puts. Pain is increased with margin utilization
If you're forced to buy @ 750, the STO on 3/18 -c900 will likely not be $10 credit. Maybe a good proxy is looking at 3/4 -c900 (since current SP is at 750), which is going for roughly $2.30.
TheTalkingMule
Distributed Energy Enthusiast
I don't recall folks saying 2-5% weekly returns was was safe, the range was more 1-1.5% that could maaaaaybe be stretched to 2% on occasion.
I got a bit "burnt" getting aggressive in the 4Q earnings window, but everything I had was widened lower and pushed out to May 20 expiration at reasonable tiny debits. Holding a lot of cash margin in my IRA, but turns out it was better there than in shares!
Can everyone make 1-2% a week selling BPS? Absolutely not. But plenty of people clearly can, minus a couple multi week hiccups each year. Cool heads who cut bait and move on are clearly back cleaning up.
This story will always be the same. 5-20% of amateur bankers will be successful to varying degrees.
The only thing you might be missing is a super TSLA crash all the way down to 500s or low 600s. It becomes almost impossible to sell weekly calls on your shares if you are trying to get called at your B/E of 710.
I’m not saying it will happen but based on the action today who knows anymore. Are you OK with bagholding those shares until the SP recovers?
If we drop more tomorrow below 730 my plan is to sell 690 puts for 03/04. 690-695 was the S&P entry price and we are already oversold, a lot of it coming from some aggressive put buying forcing MMs to sell.
I see options alpha always thrown around here as the place to go to learn but I never see tastyworks/tastytrade mentioned. Tastytrade extensively backtests strategies, compares them, forms conclusions, and are primarily options sellers. For those who dont know, these are the same guys that created thinkorswim and were a part of getting weekly options implemented. I had to go back to my option roots to find a video that might have some relevance to you all right now:
and
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It's a great momentum play when appropriate but there's always sizeable risk. It's like bending over to pick up dimes and nickels and getting run-over by a dollar freight train.
AquaY
Member
Anyone that promoted or believed 2-5% weekly returns “RISK FREE” are ridiculously naive.
Their platform, pricing, products offered, and customer service might be unmatched. Their backtest and research tends to be based on broad indexes and then the smoke and mirrors come in where they try to generalize the results and strategies to individual stocks. You can follow Tom and Tony's trades but it's nothing to write home about.
They might be the masters of flipping options trading platforms and options businesses. I'm not sure they can keep long term traders as they don't seem to be able to grow their customer base. I would guess poor customer P/L, being a one trick pony biz, and the burden of options training are the main reasons.
Fwiw if you're utilizing a lot of margin and wanting to reduce downside risk during these wild times here is a trade that could help:
Buy at the money put ($750 strike)
Sell otm call ($780 strike)
For may expiration this will result in a slight credit.
You'll gain downside protection, give up upside, and at no additional cost/margin.
A deal with the devil, but if you've been too aggressive with margin use this could be part of the solution.
Edited: 780 strike for the call. I originally listed 800 strike, but that does not result in a credit
Buy at the money put ($750 strike)
Sell otm call ($780 strike)
For may expiration this will result in a slight credit.
You'll gain downside protection, give up upside, and at no additional cost/margin.
A deal with the devil, but if you've been too aggressive with margin use this could be part of the solution.
Edited: 780 strike for the call. I originally listed 800 strike, but that does not result in a credit
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I show the mid-point is a $8.20 debit. (Or at least it was at close, it would likely be significantly different tomorrow morning.)
How is it no additional margin? If the price is $850 come May it would seem that you are out $5k per contract.
And you have to have shares to back it. (Since both options are based on you selling shares.) So I must be missing something.
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Good catch, I first looked at this with a 750 strike put and 780 strike call which may result in a slight credit. We'll see what the pricing looks like in the morning. I edited my previous post to reflect the 780 strike call thanks
So Putin has attacked. Looks like he was just playing the west all this time.
Markets crashing, to avoid a margin call I might have to sell a bunch of shares. Perhaps today is the day to go all cash and then start with the wheel.
At the very least I'll have to sell atm calls.
****in lunacy.
Markets crashing, to avoid a margin call I might have to sell a bunch of shares. Perhaps today is the day to go all cash and then start with the wheel.
At the very least I'll have to sell atm calls.
****in lunacy.
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Tough times, but nobody can claim they didn't see it coming... I guess I'm doing OK as my portfolio is "only" 10% down YTD, and that's basically all due to LEAPS losing value, but at they're mostly Jan 24 strikes, I don't stress about that too much and I'm selling against them all weekly which has mostly recovered the losses anyway
Like others, $TSLA covered calls have been very lucrative again this week, all closed out yesterday - was too hoping for some kind of recovery to resell, but not looking likely right now. Selling lower strikes is probably risky too, after days on end of red, any kind of macro "good news" could cause a sudden and dramatic bounce at any moment - be careful!
Fortunately, I have avoided $TSLA puts like the plague - not a great idea to be selling those when the stock drops 5% daily!
I did write some $GOOGL -p2500's, which are now very slightly ITM in pre-market - I'll probably roll these ATM as I think we're very close to the bottom and markets tend to recover fairly quickly from these geopolitical events
As a general not-advice, I'd note that $GOOGL is a far less stressful stock to trade against, it's moving way slower than $TSLA, far less volatility, but the premiums are decent - a higher entry-cost for LEAPS, yes, but right now those prices became very reasonable IMO - don't forget a split 20 for 1 is coming in July - it also appears to be the one of the least affected mega-cap after $AAPL
Like others, $TSLA covered calls have been very lucrative again this week, all closed out yesterday - was too hoping for some kind of recovery to resell, but not looking likely right now. Selling lower strikes is probably risky too, after days on end of red, any kind of macro "good news" could cause a sudden and dramatic bounce at any moment - be careful!
Fortunately, I have avoided $TSLA puts like the plague - not a great idea to be selling those when the stock drops 5% daily!
I did write some $GOOGL -p2500's, which are now very slightly ITM in pre-market - I'll probably roll these ATM as I think we're very close to the bottom and markets tend to recover fairly quickly from these geopolitical events
As a general not-advice, I'd note that $GOOGL is a far less stressful stock to trade against, it's moving way slower than $TSLA, far less volatility, but the premiums are decent - a higher entry-cost for LEAPS, yes, but right now those prices became very reasonable IMO - don't forget a split 20 for 1 is coming in July - it also appears to be the one of the least affected mega-cap after $AAPL
Wow you are only down 10%. With today I am going to be down around 35%.
I am trying to decide what to do with my last bit of cash.... TSLA Leaps or GOOGL leaps or just buy Tesla shares or do nothing. What GOOGL strikes do you have?
MeetKevin is looking like a genius here haha.
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bkp_duke
Well-Known Member
I have 800/700 BPS for tomorrow. I have little faith that I can roll them today since premarket we just pushed below 700.
This is brutal. I'm probably going to hit the ejection seat for a while and go study to become a better trader. Humbling experience for sure.
This is brutal. I'm probably going to hit the ejection seat for a while and go study to become a better trader. Humbling experience for sure.
scubastevo80
Member
Happy that we have nothing expiring tomorrow, but worrying about how to manage the two BPS expiring next week. I'm hoping this is the worst of it and not a prolonged "war" that continues to upset the markets. If we get any form of relief to the mid/upper 700s I'm likely go roll all my BPS out a month for as much strike improvement as I can get. For those sitting in cash - I'm envious.
On a side note, I'm selling some of my safety/"staples" stocks this morning to load up on TSLA shares. COST, for example is down ~4% in the last few days (15% from ATH), and TSLA is down 20%+ (43% from the ATH).
@bkp_duke - sorry to hear. Hopefully this was money you could afford to lose. I've had the same experience, 4 months of wins through year end, up 20+%, and then down 50% in January due to overconfidence and position sizing. Keep learning and hopefully this will be the worst of it with TSLA.
On a side note, I'm selling some of my safety/"staples" stocks this morning to load up on TSLA shares. COST, for example is down ~4% in the last few days (15% from ATH), and TSLA is down 20%+ (43% from the ATH).
@bkp_duke - sorry to hear. Hopefully this was money you could afford to lose. I've had the same experience, 4 months of wins through year end, up 20+%, and then down 50% in January due to overconfidence and position sizing. Keep learning and hopefully this will be the worst of it with TSLA.
Yesterday I rolled 2/25 800/700 BPS to get a strike improvement , minimize the debit , minimize margin window, achieved a slightly narrower spread for 3/25 @ 700/650 , 2 for 1 is how you'd say it? They were too expensive to close, I didn't want to deal with them today or this week. So, I gave back 2/3 of the credit to keep them alive.
I have next week 790/690 to deal with. Crazy times!
I have next week 790/690 to deal with. Crazy times!
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