Wiki Selling TSLA Options - Be the House

[AquaY]

They split as well. I wouldnt want to end up with options that arent whole numbers though because those will be less liquid. In a 10:1 split 1005 options would become 100.50 options for example. Gross

There are no fractional options positions. The " Make Whole" adjustment is different if this happens. I don't know how they prefer to do it but I do know you can't have fractional options.
Anyone interested should call their broker and make them explain it LOL

 

[Tyler34]

There are no fractional options positions. The " Make Whole" adjustment is different if this happens. I don't know how they prefer to do it but I do know you can't have fractional options.
Anyone interested should call their broker and make them explain it LOL

This is false. Go look at any stock with a <50 share price and tell me there isnt options that arent whole dollars. Here is one example Nikola Corporation (NKLA) Options Chain - Yahoo Finance

 

[Knightshade]

There are no fractional options positions. The " Make Whole" adjustment is different if this happens. I don't know how they prefer to do it but I do know you can't have fractional options.
Anyone interested should call their broker and make them explain it LOL

Not sure what you mean about no fractional positions- you can certainly have option contracts where the strike is not in whole dollars though.

With a split each contract is still for 100 shares, just at 1/5th the strike (or 1/10th or whatever the split ratio) and you have 5x the contracts (or 10x or whatever the split ratio is)

 

[Blue horseshoe]

How will the upcoming share split impact options? Do contracts just split alongside shares? Any rationale for closing out specific positions, spreads, etc beforehand?

No real impact. Just like the shares, options get split and the strike prices get divided by the same ratio. Had plenty of options on the last split and I ended up with 5 times the options and all the strikes were divided by 5. Resulted in some odd strikes for some of the options like $1420 strike options turning into $284 strike options

 

[ReddyLeaf]

Quiet day over here so i'll post my trade. STO 900/800 4/22 put credit spreads for $5.30 back when the share price was around $990

STO 04/22/2022 C $1,055.00 at $17.00. Somehow, luckily managed to hit the afternoon peak (put in a limit order after the AM peak). This creates a tight strangle with the -p1000s that I sold last week. Probably will lose my shirt on one of these, but I have faith in those pesky MMs to keep the SP near $1000, no matter how great the financials.

 

[juanmedina]

STO 04/22/2022 C $1,055.00 at $17.00. Somehow, luckily managed to hit the afternoon peak (put in a limit order after the AM peak). This creates a tight strangle with the -p1000s that I sold last week. Probably will lose my shirt on one of these, but I have faith in those pesky MMs to keep the SP near $1000, no matter how great the financials.

I have $1080-1120 covered calls for this week and I sold some Netflix puts which were paying decently with Netflix at almost the 52w low and the IV is elevated.

 

[Oil4AsphaultOnly]

STO 04/22/2022 C $1,055.00 at $17.00. Somehow, luckily managed to hit the afternoon peak (put in a limit order after the AM peak). This creates a tight strangle with the -p1000s that I sold last week. Probably will lose my shirt on one of these, but I have faith in those pesky MMs to keep the SP near $1000, no matter how great the financials.

i've got a -960c / -965p strangle and counting on the MM's too!

 

[scubastevo80]

Anyone with open positions have thoughts on this week? I may roll my 4/22 BPS and BCS out a week on the 20th for credits since both are presently up (64% and 78% respectively). I may also write covered calls in the personal account 1-2 weeks out - still mulling over the strike price though.

 

[corduroy]

I don't want to commit to anything before earnings, so I channeled my inner @Yoona and day traded some -900/800 BPSs. I was lucky enough to STO right at the bottom of the dip this morning and closed 1 hour later at 50% profit.

 

[AquaY]

This is false. Go look at any stock with a <50 share price and tell me there isnt options that arent whole dollars. Here is one example Nikola Corporation (NKLA) Options Chain - Yahoo Finance

From the way you phrased your post you were talking about amount of options. Not strikes.
I wasn't talking about strikes. I was talking about positions. # of contracts and i think I was pretty clear on that.
Options. as in contracts. NOT strike prices.

Not sure what you mean about no fractional positions- you can certainly have option contracts where the strike is not in whole dollars though.

With a split each contract is still for 100 shares, just at 1/5th the strike (or 1/10th or whatever the split ratio) and you have 5x the contracts (or 10x or whatever the split ratio is)

It's # of contracts. A position is how many of something you have. His OP was about # of contracts. At least that's how it read. If he meant strike he should have said strike.
The smallest number of contracts there can be is 1. No fractions.
This can come into an issue with a split when you have an odd size split. Like 5/2
What they do is adjust the number of shares that each contract stands for

 

[Yoona]

I don't want to commit to anything before earnings, so I channeled my inner @Yoona and day traded some -900/800 BPSs. I was lucky enough to STO right at the bottom of the dip this morning and closed 1 hour later at 50% profit.

also super happy with my 4/4(!) daytrade wins today... learning more and more that patience (aka don't panic during reverse) is one key to success.

 

[Tyler34]

From the way you phrased your post you were talking about amount of options. Not strikes.
I wasn't talking about strikes. I was talking about positions. # of contracts and i think I was pretty clear on that.
Options. as in contracts. NOT strike prices.

View attachment 795108



It's # of contracts. A position is how many of something you have. His OP was about # of contracts. At least that's how it read. If he meant strike he should have said strike.
The smallest number of contracts there can be is 1. No fractions.
This can come into an issue with a split when you have an odd size split. Like 5/2
What they do is adjust the number of shares that each contract stands for

I guess giving an example in the next sentence with strike price was too confusing.

 

[AquaY]

I guess giving an example in the next sentence with strike price was too confusing.

Yeah, Sorry I don't speak stupid as fluently as you do.

 

[Oil4AsphaultOnly]

Yeah, Sorry I don't speak stupid as fluently as you do.

Dude. Seriously?! You mis-read Tyler34's posting to mean # of contracts, when he was talking about strike price, and you're getting upset at him for pointing out the misinterpretation?

 

[Knightshade]

Anyone with open positions have thoughts on this week? I may roll my 4/22 BPS and BCS out a week on the 20th for credits since both are presently up (64% and 78% respectively). I may also write covered calls in the personal account 1-2 weeks out - still mulling over the strike price though.

I've got some -1000/+750s and some -1000/+700s for Friday

Ideal world there's a run up into Wednesday afternoon before earnings and I close em 2 days early for a lot less than they're currently worth, but might be wishful thinking.

If I can't close em safely late Wed for not a ton then they're wide enough I'm not super worried about needing to roll em- probably just out to 4/29 with the thinking that even on a Thursday sell-the-news the #s would prompt various upgrades in the coming days that'd get us back over 1k by then... (though I suppose I might see about rolling down 5-15 bucks under 1k on the short leg- looked like that was about an even or tiny credit roll to 4/29 today at various times)


Not planning to open anything call-side this week.

 

[AquaY]

Dude. Seriously?! You mis-read Tyler34's posting to mean # of contracts, when he was talking about strike price, and you're getting upset at him for pointing out the misinterpretation?

I got upset with him for his rude and obnoxious post.. I didn't jump on him for posting something I thought wrong like he did to me.
His use of terms were wrong. I guess I could have figured out he meant strike from looking at the numbers he used. 1005 would be an awful lot of contracts.
From my first post I stated amount of contracts. He could have simply said, I was talking about strikes.
Instead he was rude/ I responded in kind.
Why you decided to only call me out on it only you can say. Perhaps you didn't see how he had replied.

 

[Oil4AsphaultOnly]

I got upset with him for his rude and obnoxious post.. I didn't jump on him for posting something I thought wrong like he did to me.
His use of terms were wrong. I guess I could have figured out he meant strike from looking at the numbers he used. 1005 would be an awful lot of contracts.
From my first post I stated amount of contracts. He could have simply said, I was talking about strikes.
Instead he was rude/ I responded in kind.
Why you decided to only call me out on it only you can say. Perhaps you didn't see how he had replied.

I did see his reply. And although it was condescending (and yes rude), it didn't change the facts about who made the mistake though. So I called out your last reply as being uncalled for.

Edit: I've made my mistakes on my postings on TMC (including attacking others as being wrong), but when I realized my mistake I also publicly ate crow. It's the civil thing to do if we don't want to fall prey to the afflictions of social media.

 

[Tyler34]

We can all chill out. He got a jab, I got a jab, he got a jab. I don't mind ending this without me getting another jab. To clarify, I would not want to hold options post split with a weird strike price because the past has taught me those are less liquid.

 

[EV forever]

How will the upcoming share split impact options? Do contracts just split alongside shares? Any rationale for closing out specific positions, spreads, etc beforehand?

Haven't posted here in a while - decided to reply because of experience in this and because some of the responses annoyed me.

Contracts split exactly same way as shares. Last time TSLA split 1:5 - every 1 share became 5 shares @ 1/5 the SP.
For options, each contract became 5 contracts at 1/5 the strike price. For e.g. if you own 1 contract with strike price 1000 - this becomes 5 contracts with strike price 200

Last time many folks posted about odd strike prices becoming less liquid. For TSLA, this was of no consequence. The options volume is so high, none of the strikes are illiquid.

For e.g. - check the Options for June 2022 - there are strike prices starting from 1 onwards. I own may of these odd strike calls which were LEAPS purchased >2years back.

The only thing you should know is that it may take several days for accurate strike prices to show up in your account after the split. Fidelity took over a week for the correct number of options and their strike prices to show up

 

[MrMoo]

Haven't posted here in a while - decided to reply because of experience in this and because some of the responses annoyed me.

Contracts split exactly same way as shares. Last time TSLA split 1:5 - every 1 share became 5 shares @ 1/5 the SP.
For options, each contract became 5 contracts at 1/5 the strike price. For e.g. if you own 1 contract with strike price 1000 - this becomes 5 contracts with strike price 200

Last time many folks posted about odd strike prices becoming less liquid. For TSLA, this was of no consequence. The options volume is so high, none of the strikes are illiquid.

For e.g. - check the Options for June 2022 - there are strike prices starting from 1 onwards. I own may of these odd strike calls which were LEAPS purchased >2years back.

The only thing you should know is that it may take several days for accurate strike prices to show up in your account after the split. Fidelity took over a week for the correct number of options and their strike prices to show up

Does anyone know how it effects margin / if you get a margin call if for example you have 100 puts at a strike of $1000 then premarket all of a sudden you have 2000 puts for a strike of $50 and the price firmly below the $1000 strike.

IBKR doesn't do margin calls. It just liquidates positions so I'm worried the way it calculates options and margin freaks the backend systems out and liquifies long term short contracts when they multiply by X (split number) but the strike prices don't update.