Wiki Selling TSLA Options - Be the House

[jeewee3000]

not if they are the same expiration. Both can't lose.

Yes but the margin requirement depends on the broker. With my broker for example I have to have margin for both the BPS and the BCS side of the IC, whilst it is a given one of them will end up worthless.

Only if I were to ask for professional status on my account my IC - margin requirement would be reduced, but this would also mean I pay a lot more for options data and many features of the broker software.

So how the margin is calculated depends on the broker. You need "portfolio wide margin" to have a lower margin requirement for IC's. (and in this case it won't matter if you open both legs seperately or all at once).

 

[stealthyc]

Yes but the margin requirement depends on the broker. With my broker for example I have to have margin for both the BPS and the BCS side of the IC, whilst it is a given one of them will end up worthless.

Only if I were to ask for professional status on my account my IC - margin requirement would be reduced, but this would also mean I pay a lot more for options data and many features of the broker software.

So how the margin is calculated depends on the broker. You need "portfolio wide margin" to have a lower margin requirement for IC's. (and in this case it won't matter if you open both legs seperately or all at once).

Just to be clear you don't need portfolio margin at all brokers to not pay double margin on IC, your broker seems specially unkind.

 

[BornToFly]

Yes but the margin requirement depends on the broker. With my broker for example I have to have margin for both the BPS and the BCS side of the IC, whilst it is a given one of them will end up worthless.

Only if I were to ask for professional status on my account my IC - margin requirement would be reduced, but this would also mean I pay a lot more for options data and many features of the broker software.

So how the margin is calculated depends on the broker. You need "portfolio wide margin" to have a lower margin requirement for IC's. (and in this case it won't matter if you open both legs seperately or all at once).

I know that with Fidelity, anyone with Level 2 + spreads, or Level 3/4, can open one leg of an IC and later open the other leg without using any more margin.

 

[dl003]

Implied move indicates a 71% chance of Friday closing lower than 930 and 97% lower than 970
Monday -Tuesday high-low indicates a 72% chance closing lower than 925

Personally I assign SPY a 100% chance of visiting 410 and 50% chance of visiting 405 after FOMC. If you're feeling frisky and nimble, I guess you can sell a 935C and close it at the low later today. Not my cup of tea though. I'm 99% out for this week.

@EDIT: also, IVs peaked around noon yesterday, came down a bit but are still elevated for the week. I anticipate a bit of softness as they get crushed after FOMC although this might be transitory (heh heh). Market seems a bit too complacent and is betting on a rally post FOMC.

 

[Yoona]

Implied move indicates a 71% chance of Friday closing lower than 930 and 97% lower than 970

where can one find this data?
TIA!

 

[dl003]

where can one find this data?
TIA!

Here's the calculation for implied move. In this case, use 5/6 options instead of the monthly 5/20.

The implied move is basically one standard deviation (the middle 68% of the bell curve). Add another standard deviation to both sides and you cover 95% of it.

 

[adiggs]

Someone mentioned this before, apologies for not recalling who.

Last week I opened and closed a BPS at a profit. Today I opened an IC for the same Put spread now coupled with a Call spread. Although the Put strikes are the same, they are technically a different security (different CUSIP).

Would the wash sale rule apply here?

My understanding from reading a lot about this is that this is an increasingly settled, but still not crystal clear, element of IRS guidance. The increasingly settled component is that if anything is different about an option, then it is a different financial instrument. So the 5/13 900 strike put does not interact with the 5/6 900 strike put for wash sale purposes.

Nor does the 5/6 900 strike put interact with the 5/6 905 strike put.

If you read enough about this you'll find some earlier interpretations that were as extreme as two TSLA puts were substantially identical financial instruments that interacted together for wash sale purposes. So the 5/6 900 strike put and the July 600 strike put would be substantially identical financial instruments.


I'm not a CPA / tax pro / etc.. Do your own due diligence on this.

 

[Yoona]

The implied move is basically one standard deviation (the middle 68% of the bell curve). Add another standard deviation to both sides and you cover 95% of it.

[(ATM straddle) + (1st OTM strangle)] / 2
or
SP STDDEV +/- STDDEV

best result is 774-1006

looks like it's another good way to predict IC mid-week (my prediction was 708-979)

 

[scubastevo80]

Closed out of my open BPS 780/700 at 1pm which was up 91%. Depending on how this afternoon goes, we may consider an IC for Friday if IV stays where it is - ~110% on put side and 82% on call side (800 - 1025 is what I'm initially thinking).

 

[intelligator]

Closed out of my open BPS 780/700 at 1pm which was up 91%. Depending on how this afternoon goes, we may consider an IC for Friday if IV stays where it is - ~110% on put side and 82% on call side (800 - 1025 is what I'm initially thinking).

Yesterday afternoon I opened a 795-1035 short leg IC , 50 wide for Friday.

 

[Oil4AsphaultOnly]

so fed raised the expected .5%. market is rallying. selling a 5/6 call spread, since it seems to be a relief rally ("yay, the feds did what was expected of them").

Edit: 5/6 1005c/1100c BCS

 

[UltradoomY]

This morning BTO $920 Calls for $10 - STC right at 2pm when the minutes hit and we spiked to $927 for $25 each.
Didn't bet big, didn't catch the bottom... or the top but I did get some Whiskey money which always helps!
Looking to open an IC this afternoon 50 wide, $875 P and $975C - $7.50 each

Edit - IC filled

 

[Drezil]

With max-pain @900 and heavy action on the 950c today i think that 900p could be a good bet for tomorrow ... also to hedge my upside-bets in my portfolio ..

or do you guys think that we explode now that the FED is behaving "as expected" and "calm" and "everything is just going to plan"?

 

[Chenkers]

With max-pain @900 and heavy action on the 950c today i think that 900p could be a good bet for tomorrow ... also to hedge my upside-bets in my portfolio ..

or do you guys think that we explode now that the FED is behaving "as expected" and "calm" and "everything is just going to plan"?

I think we trend up from here. The $1000 call wall is very strong for this Friday, so that should put a limit on where we go this week.

However the whole setup for this FOMC is very similar to March. At the release of the Fed report on March 16 the SP was at $822. By the 22nd of March it had risen to $936, roughly 14%. Additionally there was a rise into the March FOMC that would put the overall rise from the 15th to 22nd at around 24%.

 

[adiggs]

I opened up 1000 strike calls for this Friday. Only 2.50ish but I decided to give it a day or 3 to see how things evolve.

Holding off on opening puts with shares up on the day. At the current trading range I've found myself leery about opening BPS for this or next Friday, and having a really quick trigger finger when I did open some up. Solution - I'll be also considering csp for next Friday on the next move down.


So far the FOMC looks like relief rally to me. Whether it continues or not we shall see. The thing I'm looking for in the financial press is how many talking heads start pointing out that the guidance may not be aggressive enough given the very high inflation we're currently looking at.

Then again we also have the first details on the wind down on the balance sheet. I have previously seen a suggestion it'll be shrunk from ~$9T to ~$6T - that makes sense to me. That'll be a few years at $100B per month (actually $90B, with 3 ramp up months at 1/2; I do approximations ). The wild card in my mind is the impact this will have on share prices. Between interest rates and running down the balance sheet, I consider the balance sheet to most likely have the greatest impact, even if that impact goes largely unnoticed.

I figure the balance sheet run off will largely come out of the markets - treasurey and mortgage backed bond markets primarily but will also spill outwards into the rest of the bond market as well. But it won't happen fast on our mostly week to week trading scale.

 

[elasalle]

3 Covered Calls at 970 for this week, don't mind them getting called .... so rolling to next week $1000 for another 6$ credit ... and rolling the dice
are against $850 calls I bought on the dip .. so don't mind converting back to shares.

..let's see if the call wall for $950 holds for this week ..
(+ might be rolling these out for a bit ... )

 

[scubastevo80]

This morning BTO $920 Calls for $10 - STC right at 2pm when the minutes hit and we spiked to $927 for $25 each.
Didn't bet big, didn't catch the bottom... or the top but I did get some Whiskey money which always helps!
Looking to open an IC this afternoon 50 wide, $875 P and $975C - $7.50 each

Edit - IC filled

I wrote a BPS at 2:13pm for $1.80 then closed it up >50% at 2:59 at $0.75. I spent a bit of time researching Thurs/Fri trading history and also opened an IC (860/1010 - 100 wide) for $3.55. Fingers crossed.

 

[bkp_duke]

VIX is moving out of bear territory. Dropped from about 29 before JPOW speech, to 25.3 now.

The technical guys will say that is very encouraging for a bull rally.

 

[phantasms]

I sold a c1100 for next Friday a few minutes ago. My track record means the stock will finish at about $1300. You're welcome.

 

[BornToFly]

I waited until 2:25 EDT when the SP was rocking around 900 and rolled down my 1050 short legs to 1020 for extra gravy. Went on a bike ride. Then saw the SP jumped to 950 after Powell back pedaled on future rate hikes. Hopefully I'm still safe for Friday. If not, since I didn't increase the number, I will be able to double the number of BCS and roll them up a lot without losing money. I guess we'll see if we break through resistance at 1,000.