Wiki Selling TSLA Options - Be the House

[BornToFly]

The drop to 700 put me back in Margin trouble. I was able to roll my 700/550 out a week to 650/550 for a small credit and reduced my margin requirement on those by a third. Hopefully the reversal is coming, otherwise a further drop into the 600s will force me to close them at a loss and maybe buy back some December Puts, at a loss, to improve Margin further, or sell shares (which I really don’t want to do).

 

[jeewee3000]

The drop to 700 put me back in Margin trouble. I was able to roll my 700/550 out a week to 650/550 for a small credit and reduced my margin requirement on those by a third. Hopefully the reversal is coming, otherwise a further drop into the 600s will force me to close them at a loss and maybe buy back some December Puts, at a loss, to improve Margin further, or sell shares (which I really don’t want to do).

I was in margin trouble too going below 700.

I rolled some puts and converted 100 shares into 3x JAN2024 800calls (with 6k USD to spare).

This bought me just enough margin to live through the - what I hope it to be - the reversal. If we were to go below 650 I need to act again.

Edit: my earliest expiration date right now is August 19th. If SP is at $1100 or higher I'll be very happy. If above $1000 I can roll all August positions at a credit.

If below $1000... I need to think about what I'll do.

I might sell August $1100 cc's on the next decent spike to get some extra cash for managing positions if need be. However I cannot shake the feeling the reversal could be swift the second Putin taps out of Ukraine or next months inflation numbers are OK and Tesla shows a better than expected Q2.

 

[jeewee3000]

Pre-market acting squeezy. Good time to sell short term cc's on the IV spike on open?

I'm thinking today's expiration $850's or $900's, or something for next week. Anyone has plans in this regard?

 

[saniflash]

I'm thinking today's expiration $850's or $900's, or something for next week. Anyone has plans in this regard?

I have the same plan for $855s today, hiding behind 2 call walls. I will wait a few mins after market open to see how the price develops.

On the one hand, the huge Call spike at $800 should incentivize MMs to keep the closing price below $800. On the other hand, if they need to further hedge the $800's because it goes towards $825, then the price could shoot even higher...

 

[jeewee3000]

I have the same plan for $855s today, hiding behind 2 call walls. I will wait a few mins after market open to see how the price develops.

On the one hand, the huge Call spike at $800 should incentivize MMs to keep the closing price below $800. On the other hand, if they need to further hedge the $800's because it goes towards $825, then the price could shoot even higher...
View attachment 803650

Yes this could turn out to be a delta hedging gamma squeeze type of situation (Hertz, anyone?) but given the heavy macro worries I'd think not.

 

[JustMe]

Pre-market acting squeezy. Good time to sell short term cc's on the IV spike on open?

I'm thinking today's expiration $850's or $900's, or something for next week. Anyone has plans in this regard?

Sure, if you know where the peak will be. $800? $900 $1,000? I really don’t know

But this could be a good opportunity to day trade.

Good luck, folks

 

[Yoona]

does anyone know why 7/15 looks like this? TIA!

(edit) this is drastically different from yesterday where p950 and c1000 were the only tall/noticeable walls that existed

 

[bkp_duke]

does anyone know why 7/15 looks like this? TIA!
View attachment 803667

I would want someone to verify me, but I believe it would be because it is a long-standing quarterly options expiration (triple witching). So it has been "collecting" positions for 2-2.5 years at this point.

 

[jeewee3000]

does anyone know why 7/15 looks like this? TIA!

(edit) this is drastically different from yesterday where p950 and c1000 were the only tall/noticeable walls that existed

View attachment 803667

All of these "walls" look a lot greater than they are. The highest in your chart is only 4.500 strong. On the zoomed out version the highest wall is the $2400 call wall which is 6.000 strong.

Compare that to today's expiration where the put/call walls are between 8k and 14k strong. The walls we see as 'noise' on today's expiration are as tall as the highest walls on the 7/15 chart.

What does this mean: the open interest for 7/15 is very low relatively speaking. And the flat parts between the strikes means there were no option contracts open for that time. This will change when we get to within one month of this expiration and the weeklies show up, but all in all the 7/15 chart means little and will have little effect on the SP.

 

[juanmedina]

Pre-market acting squeezy. Good time to sell short term cc's on the IV spike on open?

I'm thinking today's expiration $850's or $900's, or something for next week. Anyone has plans in this regard?

Not me. I am going to stick to 5 or less DTE trades.... what if we keep going up next week?


Is everyone's margin requirement getting bumped from 40% to 60% on E-Trade like the people on the other thread? that has me worried.

 

[jeewee3000]

Not me. I am going to stick to 5 or less DTE trades.... what if we keep going up next week?


Is everyone's margin requirement getting bumped from 40% to 60% on E-Trade like the people on the other thread? that has me worried.

Well, 1 DTE is fine. I'm planning on a daytrade of $850 cc's.

Not $855's like @saniflash since that strike has way less volume and therefore larger bid-ask spread and therefore harder to get orders filled.

EDIT: $850 strike premiums were lower than anticipated. I put my faith in the $800 call wall and sold some $800cc's @3,2 average. Will close on MMD.

 

[wnorris]

does anyone know why 7/15 looks like this? TIA!

(edit) this is drastically different from yesterday where p950 and c1000 were the only tall/noticeable walls that existed

View attachment 803667

It looks like someone placed a bearish sweep order where they spread their puts across multiple expirations. Instead of grouping the trade into a single or few expiration dates it seems they chose a wide 'sweeping' range.

 

[juanmedina]

Well, 1 DTE is fine. I'm planning on a daytrade of $850 cc's.

Not $855's like @saniflash since that strike has way less volume and therefore larger bid-ask spread and therefore harder to get orders filled.

EDIT: $850 strike premiums were lower than anticipated. I put my faith in the $800 call wall and sold some $800cc's @3,2 average. Will close on MMD.

sorry I didn't read you post closely I though you were talking about next week. I rolled the 850cc to 830cc for pennies just now.

 

[phantasms]

I pushed today's 920p to 6/17 900p for ~$4 in credit. I don't like not being active for a month but "making" $2400 on it seems reasonable.

I wonder about writing a call for the same week but I still have PTSD from writing calls off a hard bounce from $700 a few weeks ago. lol

 

[TheTalkingMule]

Pre-market acting squeezy. Good time to sell short term cc's on the IV spike on open?

I'm thinking today's expiration $850's or $900's, or something for next week. Anyone has plans in this regard?

Lol..... MM's weren't about to let you pull such shenanigans. No free money for you! I guess that's part of the "market making" role, to limit premium on short term plays?

Again.....can't we pool our funds and become a hedge fund & market maker? TMC......Too Much Cash Incorporated

 

[jeewee3000]

Lol..... MM's weren't about to let you pull such shenanigans. No free money for you! I guess that's part of the "market making" role, to limit premium on short term plays?

Again.....can't we pool our funds and become a hedge fund & market maker? TMC......Too Much Cash Incorporated

I beg to differ. Still holding the covered calls, which are already on 40% profit on the same SP as it was before. I don't see $800 reached so decided to wait for 90% profit.

Should be in about two hours

EDIT: @65% profit right now. Might be famous last words but today I'm living in the good old days when a certain member on this thread made weekly agressive CC bets and took the MM's to the cleaners. (Summer 2021 if I remember correctly)

 

[Chenkers]

Might be famous last words but today I'm living in the good old days when a certain member on this thread made weekly agressive CC bets and took the MM's to the cleaners. (Summer 2021 if I remember correctly)

Yes but he was doing it when IV was in the 40's. Not so easy with IV for this week double that.

I sold 620/660 BPS for next week @$3.50. I could have got nearly $4.50 near open but was expecting a MMD that never really came. It looks like we're being heavily capped so far by MM's targeting under $780 for max pain. Even Ford and GM are easily outperforming us and they don't have the Twitter boost. However this usually translates into a pressure release on Monday, so I will look forward to opening some calls then.

 

[john tanglewoo]

I haven't been assigned but the initial and simplistic analysis is to keep an eye on the extrinsic value in the option. My guess is that those 690 strike puts were virtually all time / extrinsic value.

The reason you watch the extrinsic value is that if you get assigned, that means the other side is exercising. If you were able to instantly sell the assigned shares, then the net result is that you've just been given all of the time value in the position. So if you have 690 strike puts, with share price at 690, and time value of $20 ($20 option price in my made up example) and you were assigned, then the other side just paid $20 for the privilege of buying shares at 690 that then can buy on the open market for 690.

Only when that time value approaches 0, or in rare / extreme cases where shares are simply unavailable (call assignment) or there are no buyers (put assignment), is early exercise a good choice.

The really low extrinsic value for ITM options only arises when really, really DITM; or when DTE is low (Thu or Fri of expiration). But the really important detail to keep an eye on is the extrinsic value.

Not really much to do with how much time.... it has to do with time value.
With more than a month - there is still time value in them which if exercised would be a net loss for the person on the other side,
Simple math -
$690P --> stock price $680 difference $10 but the contract value is $35 - so exercising would give you cost them the $25 difference.

Now when that time value goes below $1 is where it gets dicey but wouldn't be there on something over 30 days out.

(I made these numbers up for illustrative purposes)

Dang - @adiggs beat me to it! and also with a better example!

You have gotten a few good replies, but I thought I would follow up with it more illustrated, since I also have some puts expiring on that date.
View attachment 803364
As you can see, my 1000 puts have a time value (or extrinsic value) of 4.75, giving me no cause for worry, since the owner would gift me 4.75 USD per share needlessly by exercising.

If you look a bit further down, 1175 on the other hand, is at 0. That gives a bigger cause for consern, and if I had those, I would roll them.

Your puts, at the money, would be worth somewhere around 70-75 USD in time value, and would be of no risk of being exercised.

Another reason why I absolutely love this forum, learned more in 5 minutes from your replies based on my actual scenario than I could have through theorizing. Really appreciate the responses (and especially the visual example from you, Chiller). Looks like I really didn't need to panic.

 

[Discoducky]

Most likely I'm going to be the happy owner of 500 shiny new non-tax accounts purchased shares (via put assignment on my $800s and $820s).

Going to be selling calls next week! Profiting from premiums!

Edit: Maybe not, while typing we've run up! Either way, fine with me...

 

[dc_h]

I sold some 780 CC's, about an hour ago, to see if I could push the price up and help role 790-740 BPS. I didn't wait long enough after selling the CC's. Anyone want to profit off my luck, buy some 780's now.