-
Want to remove ads? Register an account and login to see fewer ads, and become a Supporting Member to remove almost all ads.
Wiki Selling TSLA Options - Be the House
- Thread starter adiggs
- Start date
jeewee3000
Active Member
I expect a P&D report rally either on friday or on monday. Market expectation is low and I'm guesstimating Tesla will beat the low forecasts.
Before P&D report we have FOMO a lot of times, not because of concrete expectations but because of general risen volume in the stock and options market.
So about these straddles.. whats the reasoning on going out 4 weeks or a month?
Right now ATM short straddle
for 7/29 pays $115, 30 days to expiry, that's $3.8/day
for 7/8 pays $61, 9 days to expiry, that's $6.7/day
If you're selling straddless to harvest theta, wouldn't a shorter time frame make more sense? Also gives you easier management/rolling if sp makes a big move.
Right now ATM short straddle
for 7/29 pays $115, 30 days to expiry, that's $3.8/day
for 7/8 pays $61, 9 days to expiry, that's $6.7/day
If you're selling straddless to harvest theta, wouldn't a shorter time frame make more sense? Also gives you easier management/rolling if sp makes a big move.
I think I rally next week is possible. Reports are out today that Texas is already making several thousand cars/week. I'm making up numbers, but if they say they are at a 2 Million car/year run rate starting Q3, and will increase it even more during the next 6 months, the stock could climb....
Edit: Changed production to cars/week (not per day).
Edit: Changed production to cars/week (not per day).
Last edited:
jeewee3000
Active Member
I chose a random expiration. (Not quite ra'dom since I'm managing a 7/22 position a'd the numbers were fresh in my head) Of course the closer the expiration date the faster the theta decay.
Easier to manage I don't know. If sp swings heavily on weeklies your DITM leg has a very real risk of early assignment. (Which is fine of course if you have the right mindset) On a longer expiration of say a month you can let it ride and have less managing of positions to do.
The monthly straddle seems to me a great low maintenance kind of income provider. Weeklies take up more brain space.
But yeah, short expiration straddles seem a great deal too if you're actively trading anyway.
OK, I initially proposed 4 weeks because it was Tuesday and sunny... no particular reason, but I was fantasising about having 2000 $TSLA shares and playing that straddle for $250k
Indeed, IV is high for next week - I guess the P&D causing that...
I was dwelling on it further and I thought perhaps only committing 50% of shares against covered calls would also provide some insurance against a rally, without the need to purchase LEAPS - puts I worry less about as my genetic bullish disposition to $TSLA biases me to the upside - and from here I think we have more upside than down
The other benefit of doing a 50% trade on this is that you can continue another iteration even if the first batch of shares get called away, meaning you take more of the upside gains. Of course the converse can happen, you can get several down weeks/months, then again, not betting the whole farm allow a second bite at a lower strike and more chance to reverse in the opposite direction
Of course there's a chance than one get encumbered with shares and zero cash, then you sell exclusively calls, and the other side of the coin, it all goes to cash and you go heavy on puts
I very much appreciated @jeewee3000's post above - would be a "post of merit" in the "other" thread, and indeed, entering into a strangle is higher probability of full profits, but the straddle is better, IMO, in times of high volatility
Note that I have no data to back this up, just a feeling in my glands, this is not financial advice, I'm an idiot*, etc.
*101% for sure
There is almost no change in premium for 685 straddle on the TSLA options chart going from 30 days to 37 days out. I would definitely do 30 days in this case.
Tastytrade approach is I believe to open 45 DTE and exit around 20-30 DTE.
But their whole approach is quite different, many stocks and many small positions.
Looks like closing my ccs for tomorrow early was a bit too early.. but hey profit is profit.
I'll likely do the same.
We're getting decent support late yesterday and today in pre-market compared to macro/beta. I see the macro down day today as funds doing end of quarter clearing to free up funds to purchase at the start of a new quarter tomorrow. For TSLA this could mean a decent up day on Friday if funds view Tesla as a likely winner for Q3. My 660/620 BPS sure hope so.
FYI, yesterday after trading hours just got assigned 2 of the 5 -p1200 19/8 contracts I have been rolling for 6 months now that I sold when the SP was 950 and we were in an uptrend. Should have closed them when SP reached 1150 however theta value was still high and they were +25%.
I was planning to address those and roll them out today because I was working like crazy the last days and got my first day off today. I guess I will be working more to pay the interest on that $240,000 on my margin at 4.25% until the SP reaches new highs and be able to trim a little bit of the position. Will roll the rest to December.
My first assignment. 42 DTE
I was planning to address those and roll them out today because I was working like crazy the last days and got my first day off today. I guess I will be working more to pay the interest on that $240,000 on my margin at 4.25% until the SP reaches new highs and be able to trim a little bit of the position. Will roll the rest to December.
My first assignment. 42 DTE
Why can't you just sell the assigned shares and then sell 2 more p1200 and be back in the same position and keep rolling as you were before without paying the margin interest? I did that when I was assigned at 900 and it was pretty much break even.
The problem is that I can’t choose which shares I want to sell with my broker so I will end up paying taxes on 200 shares with a cost basis of 400. But this is a good point this is not going to be the same tax hit as selling the shares at 1200$ with a greater tax hit.
there were about 6 tall candles yesterday ~679
indicates lots of buyers at that price point
sry no screenshot, i am on the road
I'm always amazed by the bravery of those pushing down the SP before a potential catalyst. They have perfected the game of chicken. I guess having/knowing everyone's stop loss orders in the computer helps.....
Tomorrow before close I will close my 680 Puts and buy 1000 shares at the SP. Then I will do 10X straddles 4 weeks out. I guess the lower the SP when I do it, the safer it will be on the Put side.....
TSLA currently holding up better than Macros, but in the past TSLA eventually gets pulled down/fades by the end of the trading day if NASDAQ stays deeply Red....
Similar threads
