Wiki Selling TSLA Options - Be the House

[jeewee3000]

As a complete aside; discovering this thread has been the single best thing to happen to me this month. I've been really mentally out of it being stuck in these CC, conflicting feelings of happiness to see tsla surge, while being incredibly sad about it too. Wondering if this is how bitter TSLAQ people are made! Just haven't been myself. This community has been so incredibly knowledgeable & helpful... and hearing other stories has been so therapeutic.

Kind words that reflect my personal feelings.

This thread is where I spend 95% of my time at TMC. The main thread adds a lot less value and is kind of a hostile environment for those not merely HODLing.

Also the valuable information to noise ratio is way higher over here. Sometimes even the greatest contributors in this thread keep their mouths shut for days since they don't have anything to add, instead of the constant need to be heard/read by others. Thanks to all for keeping it this way.

In other news, just thought of an ultimate escape for deep ITM cc's:

1) sell a deep ITM put LEAP (e.g. JAN2024 -2000p @1,017.05 right now)
2) use premium to buy back the cc's bugging you
3) wait for the stock split
4) IF SP not at $2000 by then, roll for credit, IF it is, then you're in the clear


Basically a roll of mulitple cc's into one cash secured put.

Only necessary ingredient is cash. That's the lesson I've been learning the last few months: cash truly is king. At first I always thought cash is a wasted resource not providing any gains, but cash has so many uses it is (IMO) an essential part of a traders portfolio.

Not advice of course.

 

[Drezil]

Just watching the SP for the first hour. If we get a nice dip near the end of the first hour I will sell a few more 880/730 BPS. If we start going green, I will watch longer and instead sell BCS 1300/1450.

and what do you do if we continue to meander -0.5 to -0.01 for over an hour?

 

[BornToFly]

and what do you do if we continue to meander -0.5 to -0.01 for over an hour?

If by mid day we are staying flat, I'll do a few more BCS but wait until tomorrow to do the rest for Friday (in case we have a strong up-day tomorrow). I'm more worried about something really bad happening in Ukraine that suddenly tanks the markets, so I would rather do BCS than BPS right now. My goal is preservation of capital, so I would rather make a little less and be safer, than sell too soon and miss out on a strong move that threatens positions that were too close to the SP in an attempt to make more money.

 

[binlcd]

Any chance someone could point me to a glossary on acronyms? I'm accustomed to just CC and CCP.... what are BCS + BPS?

 

[bonk3125]

Any chance someone could point me to a glossary on acronyms? I'm accustomed to just CC and CCP.... what are BCS + BPS?

Wiki - Options & "the Wheel" Glossary and FAQ

This is the Glossary and FAQ for: https://teslamotorsclub.com/tmc/threads/selling-tsla-options-be-the-house.191290/#post-4640780 The 'Be The House' Thread Glossary: IC: Iron Condor BPS: Bull Put Spread BCS: Bear Call Spread CC: Covered Call LCC: a LEAP Covered Call LEAP: A long dated option...

teslamotorsclub.com

 

[ninpb]

STO 4/8 1450C for 1.67.

BPS - Bull Put Spread
BCS - Bull/Bear? Call Spread. always forget as I've never done one.

 

[ReddyLeaf]

Darn. Literally a minute after selling c1160s CCs this AM, the SP breaks through the 1100 barrier. Price doubled. How can they do that to me nearly every time? Edit, oh well, at least my Sept/Jan -p1000s and -p1100s are decaying nicely, so maybe will collect enough cash to buyback those.

 

[BornToFly]

STO 4/8 1450C for 1.67.

BPS - Bull Put Spread
BCS - Bull/Bear? Call Spread. always forget as I've never done one.

Around here, BCS is Bear call spread. Sell 1300 and Buy 1450, etc.

 

[BornToFly]

Darn. Literally a minute after selling c1160s CCs this AM, the SP breaks through the 1100 barrier. Price doubled. How can they do that to me nearly every time?

That is why I wait now. Did half of my remaining 1300/1450 on the pop. Waiting for another 1-2% climb today or tomorrow for the rest.

 

[Drezil]

sold 1150ccs and 1200ccs too early as well. but happy to let those things go as they form a BullCS & are just there to balance out the theta-decay on the underlying. If we rise by 50$ on those in a few days (meaning money nearly doubled) then i would let them go happy

 

[BornToFly]

That is why I wait now. Did half of my remaining 1300/1450 on the pop. Waiting for another 1-2% climb today or tomorrow for the rest.

The 1250 short legs I sold last Friday in an attempt to capture more Theta value, are still worth more now, with only two more days until expiration, than they were last Friday.... That is why I'm not opening next weeks contracts until next week, especially given the uncertainty of the market reaction to P&D over the weekend.

 

[scubastevo80]

Sitting on my 4/1 BPS and BCS at 945/845 and 1260/1375 respectively with the former 79% and the latter up 66%. Will likely close both Friday morning if we get more sideways action.

Hopefully this doesn't get me tarred and feathered, but I sold a handful of HOOD 4/8 BCS 18.5/22 yesterday after the 25% pop for $0.36 and expect to close out shortly at $0.10 or less for a >70% gain. I watch a few other growth stocks and may make similar trades on the back of irrational 10%+ moves.

 

[Yoona]

TSLA RSI

Relative strength index ( RSI ) | Option Trading Guide

 

[LightngMcQueen]

I can roll these to 6/17 880cc for about a $15 credit.

Two other ways to look at it:

1. On the other side of that trade is a Call Buyer who thinks that SP will increase by more than $15 between now and 6/17. Who is more likely to be right?

2. If you close now and invest .. say buy 2/3 back of your shares after taking the loss. By 6/17 will shares gain you make more or less than rolling CC?
I think it would only take SP gain of ~$25 to make more.

 

[Knightshade]

So I've got some ITM calls (1045) expiring Friday sold against some DITM (550) LEAPs.

Non-taxable account.

Normally I've only dealt with ITM calls against shares where it's pretty simple, roll the calls or let them exercise depending on what's up. Here there's also the remaining time value in the LEAPs to think about...



Things I'm currently seeing I could do:

Roll the calls to 4/29 at 1140 for about even, if there's a post-ER sell the news I can expire em worthless or close for cheap... (and if not I guess I'm trying to roll from a higher strike at least). Downside is if there's some massive run I'm still capped.


Roll the LEAPs in to this Friday same strike for about $40 a share net credit and then just let everything exercise as spreads with both sides ITM? (assuming no pullback below 1045 which I wouldn't expect), then buy new DITM LEAPs (the June 24s exist now IIRC).


Any thoughts? Or a better idea not listed?

 

[Max Plaid]

Full disclosure... today I bought 10x 5/20 p900's, just to give a little downside protection after this crazy run-up

First time I ever buy protective puts, but I've seen this movie play out too many times before... not only give insurance against a reversals, but caps losses on any puts I write, and I intend to sell late-in-the-week puts against them to claw back a few $'s of the premium

Certainly makes me feel better when we get those big red candles appearing from nowhere, but doesn't carry the risk of perpetuating DITM calls

 

[adiggs]

Any chance someone could point me to a glossary on acronyms? I'm accustomed to just CC and CCP.... what are BCS + BPS?

Linky above. We've become such a big deal (this thread) that we have our own, second thread, with acronyms and other stuff for more concentrated reading to get new folks in the thread up to speed faster. It isn't a substitute for experience, so keep it slow and conservative - do your best to get paid to learn.

 

[Knightshade]

Just to answer myself BTW- ended up rolling on this little dip-- was able to roll to $1150 strike for 4/29 at $2/sh net credit.

I realized even if it was ITM at that point, I'd still have the option to roll in the LEAP at that point and still likely collect all/nearly all of the time value since it wouldn't burn off much at all by then, and I'd also get to collect an extra $105/share on the higher strike.

 

[ZeApelido]

Any chance someone could point me to a glossary on acronyms? I'm accustomed to just CC and CCP.... what are BCS + BPS?

Anything that starts with a "B" means you could lose all your money.

 

[LightngMcQueen]

FWIW
I was going through my notes and I thought I would share quotes from this thread and which I've found exceptionally helpful.
As they are pretty universal advice I've added them to wiki thread here:

Wiki - Options & "the Wheel" Glossary and FAQ

This is the Glossary and FAQ for: https://teslamotorsclub.com/tmc/threads/selling-tsla-options-be-the-house.191290/#post-4640780 The 'Be The House' Thread Glossary: IC: Iron Condor BPS: Bull Put Spread BCS: Bear Call Spread CC: Covered Call LCC: a LEAP Covered Call LEAP: A long dated option...

teslamotorsclub.com