Wiki Selling TSLA Options - Be the House

[Buckminster]

As long as there is no early assignment, you will keep on doing this. Those are not cash secured I guess? What will you do when assigned early?

Yes, general I don't have much cash. Go into margin for a while and sell the thing(s) in my portfolio I love the least. Not BBBY at the moment!

 

[jeewee3000]

I guess I never sold one of my 8/12 $900c Friday and it executed over the weekend. No margin in my IRA, so I sold the shares and made a quick $2,700. Taking to proceeds to roll a couple 9/16 BPS wider & lower.

BPS 9/16 $1050/$820 widened and rolled down to....
BPS 9/16 $980/$860 (x2)
for ~$3 debit (x2)
and $2k in additional IRA cash margin

Elon willing, hopefully we can all get rid of these last few lingering BPS soon! I figure my worst case is I have to widen a bit(again) and roll out to November to catch the 3Q earnings report upswing.

Did you make a typo where you said you widened these bps? You rolled down and narrowed, no? But sold 2x instead of 1x..

 

[EnzoXYZ]

for CC: be mindful of rare >20% OTM (Mon Open to Fri Close); 11 out of 631 weeks

View attachment 841246

Since the premiums for BPS are lower recently when open from Monday to Friday of expiration week. I have been opening a week before when opportunity presents on Thursday/Friday and sometimes up to Wednesday. Do you happen to have historical stats for 10 or 8 DTE? TIA!

 

[bubb]

Yes, general I don't have much cash. Go into margin for a while and sell the thing(s) in my portfolio I love the least. Not BBBY at the moment!

FWIW around mid-May (as we approached the high 600s) I was assigned ~3 weeks out from expiration on some puts that were over $300 in the money. If you find yourself rolling DITM puts during a protracted downturn and want to avoid actual margin debt I'd suggest a big buffer of time to expiration and sticking to contracts with large open interest (e.g. monthly expirations) so that your chance of random assignment is lower. You can also monitor extrinsic value, but IME it was negligible for any expiry < 1-2 months away once they go (really) deep in the money.

 

[Yoona]

Since the premiums for BPS are lower recently when open from Monday to Friday of expiration week. I have been opening a week before when opportunity presents on Thursday/Friday and sometimes up to Wednesday. Do you happen to have historical stats for 10 or 8 DTE? TIA!

i only have 7DTE (Fri Open to Next Week Fri Close) - this is for those who open trades on Fri for expiry next week

10 out of 631 weeks >20% (ie there is a 1.58% chance that CC will be steamrolled Fri-to-Fri)

BPS appears to be riskier in 2022 if it crosses a weekend (62% chance of red Fri-to-Fri):

 

[Yoona]

it is not obvious from the 1-min chart, but 15-min chart shows fight past noon is ~932, which is the:

1) fib 161.8% of today's Low; aka very strong ceiling

2) 50% retracement from 52-week H/L

 

[TheTalkingMule]

Did you make a typo where you said you widened these bps? You rolled down and narrowed, no? But sold 2x instead of 1x..

Sorry for the poor wording. Yes, I widened slightly the total amount of margin after opening a 2x position.

$230 vs $240(2x$120)

 

[scubastevo80]

I guess I never sold one of my 8/12 $900c Friday and it executed over the weekend. No margin in my IRA, so I sold the shares and made a quick $2,700. Taking to proceeds to roll a couple 9/16 BPS wider & lower.

BPS 9/16 $1050/$820 widened and rolled down to....
BPS 9/16 $980/$860 (x2)
for ~$3 debit (x2)
and $2k in additional IRA cash margin

Elon willing, hopefully we can all get rid of these last few lingering BPS soon! I figure my worst case is I have to widen a bit(again) and roll out to November to catch the 3Q earnings report upswing.

I feel your pain. I'm still sitting on BPS 10/21 880/780 and 1/20/23 980/830s. If I can get through these, I'm back to square to slightly up on the year.

I had a bull call spread at 1050/1100 I opened last Tuesday for $3.50 and sold today for $4.05. If we get a reversal tomorrow I may pick it up again (its a play on a march higher towards split date).

 

[corduroy]

I've been rolling out 5 sold puts for months without any problems so far. When they go in the money I make sure to roll on the Wednesday or earlier. Generally get $10+ premium ($5k per week = $250k/annum). I didn't like CCs. Not saying it is foolproof but it leverages the same key insight that brought us all here - "TSLA is going up".

I'm happy to be ITM and don't bother rolling down the strike price. When OTM I roll up the strike price to maintain minimum $15 premium.

Simple and effective with less stress and work. Thoughts? This is in response to the points in the main thread where I have sympathy on both sides of the argument. Skill is generally required and it is not for the faint-hearted. Two margin calls (previous to my new strategy) so far which are to be avoided...

This really does seem to be a solid strategy. Do you have a methodology for timing your rolls? Up days, down days, certain days of the week?

 

[Discoducky]

I've been rolling out 5 sold puts for months without any problems so far. When they go in the money I make sure to roll on the Wednesday or earlier. Generally get $10+ premium ($5k per week = $250k/annum). I didn't like CCs. Not saying it is foolproof but it leverages the same key insight that brought us all here - "TSLA is going up".

I'm happy to be ITM and don't bother rolling down the strike price. When OTM I roll up the strike price to maintain minimum $15 premium.

Simple and effective with less stress and work. Thoughts? This is in response to the points in the main thread where I have sympathy on both sides of the argument. Skill is generally required and it is not for the faint-hearted. Two margin calls (previous to my new strategy) so far which are to be avoided...

Thanks for the reminder about being assigned mid-week on ITM sold puts.

The puts that I have been great $1k and $1050 exp Friday), they've been a huge roller coaster though as I sold them in March, but I've ended up in a good position so I'm considering rolling to Nov or Dec as premiums are huge. I'll most likely roll Wednesday as things heat up to $1000 is my guess.

I'd like to get >$100 premium net for Nov as an example. Right now I'm at $75 net.

 

[Buckminster]

This really does seem to be a solid strategy. Do you have a methodology for timing your rolls? Up days, down days, certain days of the week?

If ITM then no later than Wednesday to be safe. Quite often I have found a Monday down day where I can get my ~$10. Down days seem easier to capitalise on as a bull. Easy to locate, get close to the bottom and fantastic that you feel great for making money when your portfolio has nose dived. Every two weeks. or so, I will buy something with the proceeds and this often coincides with it being a down day for other non TSLA bargains. I'm 45% TSLA, 45% TSLA LEAPS, 10% non TSLA stock.

Currently on 890 strike so OTM which is rare for me on this strategy up until now. I will try to hold up to Friday and roll up to 900 strike. Premium on 890s is currently $21 which is crazy high considering they are $40 otm. Once the premium is down to ~$5, I will roll out and if earlier than Friday up.

 

[Yoona]

i am curious if anyone intentionally opens near-ATM super wide BPS (that behaves like CSP)

for ex,
8/26 -p900 x2 is 25 credit, total $5000 income, margin 90k
8/26 +p500/-p900 x3 is 25 credit, total $7500 income, margin 112k, spread 400 wide

50% more income for just slightly more margin

"if i am rolling a CSP forever anyway, why not roll a wide BPS instead? the 700 midpoint is 22% OTM"

 

[MikeC]

i am curious if anyone intentionally opens near-ATM super wide BPS (that behaves like CSP)

for ex,
8/26 -p900 x2 is 25 credit, total $5000 income, margin 90k
8/26 +p500/-p900 x3 is 25 credit, total $7500 income, margin 112k, spread 400 wide

50% more income for just slightly more margin

"if i am rolling a CSP forever anyway, why not roll a wide BPS instead? the 700 midpoint is 22% OTM"

I had that idea and tried opening a 500-pt spread instead of a naked put to save on margin - but then realized that my brokerage (Schwab) only charges me $~25,000 for a naked put and not the full loss amount. So it didn't actually save me anything to open the DOTM long leg. I'm curious if this is an error by my brokerage or if other people are able to open naked puts for less collateral than the full loss amount?

E.g., I have an open 8/19 -p900 and 2x 9/16 -p800/+p300. I would expect that I would need $190k collateral for that but my current option requirement is only $61,243.00.

Here is what Schwab lists in their margin info, it's not entirely clear to me but it's not just a straightforward max loss calculation: https://www.schwab.com/public/file/P-4193744

 

[BornToFly]

i am curious if anyone intentionally opens near-ATM super wide BPS (that behaves like CSP)

for ex,
8/26 -p900 x2 is 25 credit, total $5000 income, margin 90k
8/26 +p500/-p900 x3 is 25 credit, total $7500 income, margin 112k, spread 400 wide

50% more income for just slightly more margin

"if i am rolling a CSP forever anyway, why not roll a wide BPS instead? the 700 midpoint is 22% OTM"

I have, and still found myself at full loss when the SP dropped more than I thought possible....

900/500 SHOULD be safe....

 

[BornToFly]

The way the open was looking, with NASDAQ red, I was afraid today was going to be flat/down, so I gave up on 1120/1200 and opened 1100/1200. Now the SP is up. Hopefully still safe for Friday.

 

[Yoona]

The way the open was looking, with NASDAQ red, I was afraid today was going to be flat/down, so I gave up on 1120/1200 and opened 1100/1200. Now the SP is up. Hopefully still safe for Friday.

R1 is 943 and today's High so far

as of right now, 8/19 2 STDDEV (95% probability) is 840-1048

 

[Yoona]

 

[Chenkers]

No BPS or BCS open this week with the up then flattish start on Monday. But I've been gaining confidence to day trade CC"s. So I opened 950CC on all shares and managed to time the peak with $20 per contract. Closed out 20 minutes later for $13.50. Not quite the low so far at around $10.0 but more than enough to keep me in retirement.

 

[TheTalkingMule]

Took a small risk today and rolled some 9/16 BPS in to next Friday to try and catch the mild split squeeze(or at least lack of naked shorting!). Again I've doubled the contracts, but tightened the spread so that new total margin is slightly higher than the original total.

My thought is I want to diversify my strategy for expiring these lingering Apr/May BPS in case this move up on the split is followed by a correction. Hoping that a $950 close 8/26 is the best possible scenario MM's can pull off.

BPS 9/16 $1000/$870 rolled to
BPS 8/26 $945/$870 (x2)

Paid $3 for this 20 minutes ago and now likely could've done it for a credit. Impatience. Ah well, I think the strategy is sound. I can still roll next week at SP ~$908, which is an improvement over the mid point of the original spread.

Normally wouldn't pay a debit, but I really want to get these expired. Woulda been nice to have some margin available for right now with SP @ $910 and the split looming next week. You folks must be making a mint on 8/26 BPS.

 

[Drezil]

closed all my CC for this week near the "bottom" around 10:35 ..
lets hope it was the bottom ...

i'll open them up again if we touch 940 today again ..