Bringing this over from the main thread. IIRC, you are allowed to buy and sell on the same day, but those profits are now “locked”. You cannot buy anything more until the profits have settled (1d for options and 3d for stock). This is how I have rolled bought options in my IRA, (though I normally follow the wheel so usually BTC—>STO).
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Wiki Selling TSLA Options - Be the House
- Thread starter adiggs
- Start date
I would recommend adding OptionStrat | Options profit calculator and optimizer to the mix. Hover over "Build" above & see all common option-strategies with detailed explanations.
Also "Optimize" for getting inspiration. I.e. Bullish with 1500$ target in 2 months can give you ideas
One wild example:
Question about the profit calculator - to get the Probability of success it says you need the paid subscription. Do you know if the $15/mth will do the trick, or do you need to get the $50/mth version? Either way I greatly appreciate you posting that - it looks very useful after 5 or 10 minutes of poking around.
The $50 option enables alerts, historical data and such... take a look at the link below, it can also be accessed by clicking Start Trial. I use the free version with delayed quotes and some of the other widgets locked. The tool is great at quickly sizing up speculative trades. The sliders and ability to set expiration dates for rolls is one use case, learning new trades like ration spreads, etc. I may go for the paid version to get live data... at some point. You seasoned guys and gals will find clever uses for sure.
your broker will give them to you for free if you build it in the theory-thingy they always offer.
Also the color is an indication & can be reverse-engineered if you have too much time
i would never pay for such a minor thing. Especially because the just model a "gaussian price-change" with no hyperparameters (center is current SP, sigma is current volatility). I think you can even look at the delta of the bundle as a proxy for the probability. For single options this is valid - i don't know if that works for combinations, but it should (because gaussian distributions form a monoid
) - although the range may be -1 to 1 instead of 0 to 1.My 12/16 $1200-1300cc are down $200k. I am looking at my options and a roll to Jan 23 $1400 would cost $4k a piece and still would get to keep $3k of my original credit which doesn't seem too bad. Also, I can wait for hopefully the stock to close the gap at $1000 and close them all for a $100k loss. I have 21 CC.
What are you guys target price for Jan 23rd? Any non advice?
What are you guys target price for Jan 23rd? Any non advice?
Sorry you are here, first off.
Price Target for January 2023 is $1800 (not split adjusted) because of the upcoming stock catalysts.
These are not company wise catalysts, just what's important for the Street.
Earnings growth in Q2 and Q3 over Q1 is going to blow past all covering persons and companies.
Stock split (announcements) over the next couple of months will make short sellers more wary giving us a closer approximation to real value.
Additionally, I think that we cross the analysts targets at the end of Q3... Meaning we have already had more than $12 per share for Q1/2/3 and delivered more than the 1.4M vehicles that everyone is saying TSLA will do in a full calendar year.
So then we end up with a "Free Quarter" where none of the still accelerating growth is accounted for, end of year window dressing, investment grade from rating agencies, etc.
This is conservative and can be thought of as a safe number because of inflation and recession risk off, but the money still has to go somewhere.
With that being said, and since it's not advice... I am writing aggressive puts 2 weeks out ATM and will keep doing so. New June 2024 options were just listed, so that might be an option to look at for a roll?
I have historically used delta as a proxy for ProbITM / OTM.your broker will give them to you for free if you build it in the theory-thingy they always offer.
Also the color is an indication & can be reverse-engineered if you have too much time
i would never pay for such a minor thing. Especially because the just model a "gaussian price-change" with no hyperparameters (center is current SP, sigma is current volatility). I think you can even look at the delta of the bundle as a proxy for the probability. For single options this is valid - i don't know if that works for combinations, but it should (because gaussian distributions form a monoid
The use of brokerage provided tools is well said. Unfortunately I haven't been impressed with Fidelity's tools for these sort of hypotheticals. Where "not impressed" = ready to move to a new brokerage that also provides cheaper option executions (admittedly the primary driver is lowering commissions). If we get a particularly high ratio split - 5:1 my thinking, or the 20:1 I heard from Tesla Daily (and for reasons I consider reasonable and good), then the # of contracts I'm executing is going to be going up by a lot. Roughly 5x or 20x of what I do today
. At .65 each that is also a big increase in my absolute cost on commissions.
as in STO 4/14 -p1100 $53 credit and close early when already profitable?
Indeed - although I got $63 for them earlier....
Personally I consider steady buying pressure will happen all the way through September now with the stock split intent announcement. All the share manufacturers will need to wind down those positions. Those buys of stock will have the secondary effect of shrinking the float, further pushing up the share price. With the financials being what they've been and what I anticipate I don't consider $2000 this year unreasonable (maybe not likely, but I wouldn't take on a position in which complete wipeout was dependent on that not happening).
Are those covered calls or are they call spreads? If they're covered calls then one choice is to just decide you'll sell at that 1200 to 1300 strike for now, and then wait for a better share price sometime later or at least close enough come December. I've been pretty DITM and been able to roll 1-2 years for a huge strike improvement and a small credit.
The basic problem with rolling December options today is that you've got a lot of time value in that position right now (its all time value right now). On a roll you will, in effect, start by buying out that time value. Then you get to sell the time value in the new position. Out in that 6 - 24 month timeframe time value definitely continues increasing but that rate of increase slows down. Going from 8 months to 16 months won't double the time value.
The other problem is that you can't add that much time to a December option. You can go out to June '24 right now - that'd add about 18 months to that 8 month position.
You don't mention whether the shares are on a schedule for when they need to be sold. If there is a definite resolution time that will affect available choices.
Oh - and I would only roll for a credit unless a position is really desperate. $100-200 OTM, even with far DTE, isn't desperate (MHO). It might not be ideal but that is a big difference.
I guess my not-advice for the moment is pretty simple. Do nothing (assuming these are share backed covered calls). For this position in particular, hope for sideways trading for another quarter (maybe 2). I definitely wouldn't pay $40/share to add $100 to the strike and a year to expiration.
If you think that the shares are about to pop and run with production and they won't be coming back to this level again - maybe the new trading range is about to become 2000-2500 - then taking the loss with the plan on recouping it by the shares running like crazy is something to consider. My view, while bullish, isn't this bullish
I've been looking for regression in the share price but am increasingly persuaded by the underlying logic here - that $1100 is the short term floor on the stock (a relative low point) rather than a high price within ongoing gyrations.Indeed - although I got $63 for them earlier....
But I'm not that aggressive (nor do I need to be) - STO Apr 8 1000s for around $10. With the share price at a relatively high price, relative to recent trading, I want to be more distant with my put sales to provide room for rolling down should a significant drop occur and that become necessary.
Still with the 1200 cc's for this week expiration - I want to have no open cc's when Monday dawns but I'll take a sales opportunity at the 1200 share price if offered this week.
I feel like over the past year most of us have gone from being fresh recruits in the military and now are firmly in the Navy Seal or Delta force segment of special Derivatives...
The experiences gained from being ITM, underwater, deep red, rolling out, in, flipping and strangles while the stock has flown high, dropped like a stone or traded sideways have battle hardened us into a pretty focused bunch!
Much easier to move forward after knowing how not only the pricing changes but how you feel about it is experience you can not buy!
i am also patiently waiting for a pullback to 1000 (limit buy won't execute) but 1100 is so sticky...
very tempted to daytrade short straddle 4/1 1100 $44 credit 3 DTE, BE 1055/1145
Intersting. I went from feeling like a trading GOD to an insignificant bug that is too afraid to make any real money anymore out of fear of losing it all....
An important component of my own trading strategy and approach, of using only TSLA as the underlying that I trade, is that I know the company so well. And that I continue to have a better idea of quarterly results than Wall Street. Which mostly means that I'm less wrong regarding results in my entirely non-specific way, than Wall Street has consistently been for 10 years. This provides an information edge, such as you describe, that I believe I can monetize. Thus far I'm more right than wrong.
In fact Wall Street catching up and starting to be approximately correct is an indicator for me to re-evaluate whether I actually have an information edge / advantage in the market.
I know that feeling!Intersting. I went from feeling like a trading GOD to an insignificant bug that is too afraid to make any real money anymore out of fear of losing it all....
It's helped me to realize that 'making real money', at least for me, translates into making more to give away. Actually if I could reach multiple billions and probably 10's of billions then there IS something I would be able to do that I can't otherwise do. But I'm not in danger of that outcome, thus extra risk juices the returns and increases the danger of a wipeout. In the name of ... giving more away?
I've redefined my personal definition of "real money".
The idea that I know Tesla so well, and I'm two steps ahead of Wall Street, is exactly the thing that has cost me millions this year. We were correct about Q4 P&D. We were correct about blow out earnings. Then the SP dropped over 30% (when it should have shot up >10%) and many of us got murdered by our BPSs. I would have done better doing safe spreads on random companies picked by their cool NASDAQ names. What this has taught me is that you can't get too aggressive even if you are 100% right, because Wall Street can take multiple quarters to understand what is happening and can go all Will Smith on your ass for no reason.An important component of my own trading strategy and approach, of using only TSLA as the underlying that I trade, is that I know the company so well. And that I continue to have a better idea of quarterly results than Wall Street. Which mostly means that I'm less wrong regarding results in my entirely non-specific way, than Wall Street has consistently been for 10 years. This provides an information edge, such as you describe, that I believe I can monetize. Thus far I'm more right than wrong.
In fact Wall Street catching up and starting to be approximately correct is an indicator for me to re-evaluate whether I actually have an information edge / advantage in the market.
I know that feeling!
It's helped me to realize that 'making real money', at least for me, translates into making more to give away. Actually if I could reach multiple billions and probably 10's of billions then there IS something I would be able to do that I can't otherwise do. But I'm not in danger of that outcome, thus extra risk juices the returns and increases the danger of a wipeout. In the name of ... giving more away?
I've redefined my personal definition of "real money".
@BornToFly any stories you'd be willing to share about your losses? looking for camaraderie maybe ...were you long on calls? i held march calls in large quantity as they dwindled down from ATH to elon's "should i sell" tweet and the spiral downward.
...were you long on calls? i held march calls in large quantity as they dwindled down from ATH to elon's "should i sell" tweet and the spiral downward.@adiggs thanks for your additional info on my deep ITM cc issue. to answer your question from a few pages ago, i don't have any schedule for the position and plan to roll forever. if it's 2 years, it's 2 years... 3 years... ugh. Took your advice and rolled 1 year rather than 2 for a big strike improvement... did not feel as good, but i suppose a lot can happen in 1 year's time.
i am wondering if i should buy a few back now and re-sell after we hit $1200 as you mentioned. i feel like we'll get there soon....
i am wondering if i should buy a few back now and re-sell after we hit $1200 as you mentioned. i feel like we'll get there soon....
corduroy
Active Member
The more experienced I get, the less risky my trades are. I look back on some trades I was making last year and the amount of margin I was using and there's way I would do that now.Intersting. I went from feeling like a trading GOD to an insignificant bug that is too afraid to make any real money anymore out of fear of losing it all....
LightngMcQueen
Aspirationally Rational
i would never pay for such a minor thing. Especially because the just model a "gaussian price-change" with no hyperparameters (center is current SP, sigma is current volatility). I think you can even look at the delta of the bundle as a proxy for the probability. For single options this is valid - i don't know if that works for combinations, but it should (because gaussian distributions form a monoid
IBKR has "Probability lab" allowing entering custom probability distribution. Tedious but works. It will also build/ evaluate strategy combining options and shares.
Emmet Peppers and Matt Smith discuss how they use the Interactive Brokers Probability Lab to analyze options and weigh probabilities within the market:
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