I think there's a lot more up-side than down from here...
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Wiki Selling TSLA Options - Be the House
- Thread starter adiggs
- Start date
something similar actually happened to me this week!Yoona and others have posted some great statistics on weekly Monday-Friday SP changes. So one option is to open all the positions and make iron condors at the open on Monday, 20% OTM, and be done for the week. This goes against the open into strength strategy we were doing several months ago. This week I only succeeded in opening half the BCS spreads I planned Monday morning before the SP dropped and made opening more spreads 20% above the open worthless. Today I opened more as we climbed (I kept the premiums the same but increased the strikes as the SP climbed with short legs at 780, 800, and 820), but they are no longer 20% above the Monday open. This is where I have almost gotten burned in the past. The SP drops on Tuesday or Wednesday, I open BCS for Friday that are now 10-15% above the weekly low, and when the stock recovers to the Monday open, and then climbs 10% above the Monday open, my call spreads are now ITM. So I'm trying to figure out what my best strategy will be going forward....
Monday sold CC on the 1st retirement acct but didn't do the 2nd acct (because the limit order didn't fill), so i decided to let it go today Wednesday
reason is :
- if i forced the 2nd trade, it would be "just for the sake of completing my weekly checklist"
- steamroller: the 2nd trade is for pennies and next week is earnings - we all saw the FOMO last week Fri
- the 2nd trade that was missed is an unplanned deviation from weekly strategy - do i really still need to STO it? the new risk/reward ratio is against my comfort zone - get out
- risk management rule #1: don't lose money; 1st trade is slow and steady income, but the 2nd trade is a gamble if i went ahead
About this new TSLQ fund (3x short TSLA) launching tomorrow:
Would selling a call x against it be close or equivalent to selling 3x put on TSLA? Or would buying a put be like buying 3x calls?
Would selling a call x against it be close or equivalent to selling 3x put on TSLA? Or would buying a put be like buying 3x calls?
dc_h
Active Member
I've stepped into similar issues. Big trouble when I go all. I need a cheatsheet on my desk asking if I've checked resistance levels, max pain, double checked macro news and get the current vibe on this site. If there is strong resistance down and we drop 10% on Monday morning, it might be time to sell some BPS and wait to open the other half of the condor until we get a bounce.Yoona and others have posted some great statistics on weekly Monday-Friday SP changes. So one option is to open all the positions and make iron condors at the open on Monday, 20% OTM, and be done for the week. This goes against the open into strength strategy we were doing several months ago. This week I only succeeded in opening half the BCS spreads I planned Monday morning before the SP dropped and made opening more spreads 20% above the open worthless. Today I opened more as we climbed (I kept the premiums the same but increased the strikes as the SP climbed with short legs at 780, 800, and 820), but they are no longer 20% above the Monday open. This is where I have almost gotten burned in the past. The SP drops on Tuesday or Wednesday, I open BCS for Friday 2 DTE that are now 10-15% above the weekly low, and when the stock recovers to the Monday open, and then climbs 10% above the Monday open, my call spreads are now ITM. So I'm trying to figure out what my best strategy will be going forward....
I don't follow these rules often enough. Sometimes I trade while I'm busy at work and don't think it through, other times I just see a shiny penny. Sometimes I need to log out of my account before I do a trade just to stay active.
The Buddha said "I can think and I can wait". I can too, but I often don't.
Haha. I'm actually being pretty cautious now. I got myself into big trouble in January when I was maximizing margin, and didn't close spreads that were going ITM around earnings because I knew earnings were going to be good. I did not think that 1) The market was going to crash, and 2) That TSLA would be dragged down with it after an epic Q4. Eventually I closed everything I could with big losses ($8 Million in generated cash gone), and I still have $10 Million in spreads fully ITM for December. I have no choice but to let those expire OTM, which might mean paying to roll them to Jan 2024 if the SP doesn't start climbing in the next 3 months.
@BornToFly — Agree with @Max Plaid, but have been reluctant to say so because what do I know. Honestly, I have the feeling you’ve been taking on too much and/or not fully understood risk. Sorry if that is too blunt, or of course possibly wrong.
I think it was mentioned already but needs another mention. $TSLQ, a single stock short 3X ETF, will start trading tomorrow. Let’s see how that impacts $TSLA tomorrow on top of the Karpathy news.
bkp_duke
Well-Known Member
If was all go buy TSLQ puts, is that akin to buying TLSA calls? Asking for a friend.
Buying puts on that etf has limited upside. Calls on Tesla have unlimited upside.
bkp_duke
Well-Known Member
Yeah, but I would buy some puts just to put the hurt on the TSLAQ crowd.
Yep. Easy to do
Closest thing to advice / suggestion I have:
- do the Options Alpha intro to options training linked in the Wiki and on page 1. Figure that's about 20 hours of videos in 3 big chunks. I think of those chunks as "basics", "getting into a trade", and "getting out of a trade".
- THEN after reading the first page of this thread, and probably reading the wiki (plan on reading the wiki a few times over as you get started and ideas that seemed reasonable in the abstract, become more real), and getting some ideas of where to get started... then get started with something small. For me that was seriously far OTM cash secured puts. Like 175 strike puts with shares at $400.
By small I mean big enough to keep your attention, and small enough that a complete loss doesn't really affect you. AND stick to 0 leverage as well; no margin, no spreads. Strictly shared backed covered calls and cash secured puts as mentioned elsewhere. These represent defined risk positions with a really, really low likelihood of a full loss (vs. a spread where a full loss is much more achievable). If you don't yet understand why / how that is, then you aren't ready to use leverage.
AND plan on a year or more of trading like that, reading the thread, and learning more as your education / experience period. Only when you are educated / experienced to you want to spend much time on ROIC calculations and OMG so good!?!.
The ROIC that you've already calculated can be the carrot out in front that makes this worth pursuing.
A regular theme for my first year was "being paid to learn / gain experience". It's good to be paid to learn!
My first year year of trading can be resumed as « Work harder to transform your margin backed puts into cash secured puts. Sell the stock once you get assigned and sell the same position again. Repeat.»
Conversely, then do calls on a short ETF not have unlimited upside? If TSLA goes to zero, the ETF can’t go up anymore, right? Tempted to sell a few BCS on it tomorrow.
Would be interesting to know how exactly they simulate 3x short - just a blend of puts to match 3x the delta?
Not sure of the mechanics but I’d imagine it would work the same as $SARK if anybody has experience with it.
I’m so glad the short 3x TSLA ETF is coming out now Vs few months back when SP was above $1K. Can’t wait for better Q3 production rumors and better macros to see this ETF be 1/3 of what is tomorrow. It absolutely pisses me off to see the amount of hate Elon/Tesla gets on MSM networks and all the slimy Wall Street guys trying to bankrupt Tesla.
If anyone knows how best to derail this ETF please share. It would be nice to put some of the option premiums we are earning weekly into defeating EVIL!
Xepa777
Banned
There should be a 3x TSLA etf that we can buy calls on to be full full degenerate hahaha.
Maybe, but there would be a certain satisfaction and irony to shorting a TSLA short fund
Sadly no.
It is more like a european factor-certifcate if i understood it correctly.
If i am right, then it takes the daily %-gain/loss, multiplies it by -3 and applies it to the ETF. So depending on the SPEED that TSLA goes to 0 it will end up in a different spot.
If TSLA goes to 0 (-100%) in 1 day, the etf will move +300%. If tsla goes to 12.5% in 3 days (-50%, -50%, -50%) the ETF should be up 150% * 150% * 150% = 337.5%.. when tsla in down 87.5% in 3 days...
How do they make it worth? ... If TSLA does a -10% and then a +11.111% (*0.9*1.1111 = 1) then TSLA is +-0. But the ETF is (*0.7*1.333=0.93) still down 7%..
Those factor things screw you hard on sideways trends.
But i am not sure, that this is the way the ETF is calculated.. but i never found an analog to a factor-certificate in the US-Markets - so think that is how they are done there (similar us-option <-> eu-warrants).
Don't forget that there is also an ETF fee, and I've heard some of them can be pretty hefty, such that trading at a 0% change for days can even eat away at its performance.
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