A drop in the share price after the election will be good for me on sold calls (I don't buy options any more - I've proven to my satisfaction that I'm bad at it, in many ways).
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Wiki Selling TSLA Options - Be the House
- Thread starter adiggs
- Start date
A drop in the share price after the election will be good for me on sold calls (I don't buy options any more - I've proven to my satisfaction that I'm bad at it, in many ways).
Sorry, I thought you were referring to bought calls. I'm also looking to sell a bunch of calls over the election period, expecting a drop post election to close them out cheap. I'm hoping we get a lift after earnings without an IV crush so I can sell the calls at a decent price.
LN1_Casey
Draco dormiens nunquam titillandus
Sold a 540 call for next week for an appropriate $4.20 on Friday. I think the Q3 ER will be amazing but I don't think MM's will allow it to run wild the first week, especially with the strike at 500 a too-tempting target. If it does and it gets called away, it'd have bought my Tesla. 
Win-Win.
If the premiums are too tempting, might sell a Oct 30 call for a higher strike next week regardless of this call or not. If that gets called too, than I'd start selling puts for post-election dips. One way or another, I see volatility in the market post election that will create a buying opportunity.
Win-Win. If the premiums are too tempting, might sell a Oct 30 call for a higher strike next week regardless of this call or not. If that gets called too, than I'd start selling puts for post-election dips. One way or another, I see volatility in the market post election that will create a buying opportunity.
Thoughts on selling Jan-2021 C600 as protection post ER and post election?
Before ER, I am planning to cut down my leverage by moving my ATM LEAPs (expiring in 9-18 months) into DITM LEAPs expiring > 15 months.
And on top of that, selling Jan-2021 C600. And, use the money from the calls to buy shares.
My eventual goal is to move from being primarily in LEAPS to primarily common stock, even if it means some stock on margin.
The idea is to protect from SP and IV drop (even if SP doesn't drop) in the near term.
The plan is to buyback the Jan calls sometime before expiry.
I am hoping I won't be assigned unless it's close to the expiry.
If SP seem to be going beyond $600+premium as we approach Jan-2021, I plan to buy back at a loss. My long calls would've appreciated anyhow. The only factor I see making this risky is S&P inclusion anticipation again like in July-August.
Before ER, I am planning to cut down my leverage by moving my ATM LEAPs (expiring in 9-18 months) into DITM LEAPs expiring > 15 months.
And on top of that, selling Jan-2021 C600. And, use the money from the calls to buy shares.
My eventual goal is to move from being primarily in LEAPS to primarily common stock, even if it means some stock on margin.
The idea is to protect from SP and IV drop (even if SP doesn't drop) in the near term.
The plan is to buyback the Jan calls sometime before expiry.
I am hoping I won't be assigned unless it's close to the expiry.
If SP seem to be going beyond $600+premium as we approach Jan-2021, I plan to buy back at a loss. My long calls would've appreciated anyhow. The only factor I see making this risky is S&P inclusion anticipation again like in July-August.
LN1_Casey
Draco dormiens nunquam titillandus
I dunno, Jan 21 will be post Q4 numbers, and likely post 500k/year. S&P inclusion can happen after this Q3 results, as they finally admit that Tesla is profitable even without the credits, or that the credits are going to be a part of their bottom line for a while and not a one off thing.
I can see SP600 happening in December, after the election is over and the market finishes panicking, let alone the month following with the Q4 P&D.
I wouldn't sell those calls right now the premium is not good IMO. I want to sell leaps as soon as the IV picks up as protection as well but I been looking at Sep 21 c800s and January 22 c1000 at they peak they were $90 so when they hit $80 I will start selling some. My intention is to close them out early.
IV keeps dropping now at 73% I am kind of tempted about start buying calls instead of selling calls. I have some 505-520s still that I am thinking about closing but they still have $3 in them.. decisions
Part of my decision criteria for when to close an open covered call (or put):
1) Given that I've hit my profit criteria, do I consider the risk 'high' for the position? If so, close - no more thought necessary.
2) Do I have another position I would rather be in? If so, then close the current and open the new position.
3) Do I have a new position I would like to be in, but there will be a delay (such as post-earnings), then it's a bit more tricky. If I wait to earn those last few $, then the increasing IV might offset time decay or moves in my direction, and I end up not being ready for that new open.
4) If I don't really have something else I'd rather be doing, then sitting on that last few $, even if it isn't very much, is still more than being out of the market without a new position ready to go.
- This last criteria has led to a few positions that were easily ready to close, but since I didn't have anywhere to go yet, I just hung onto them to squeak out another few $, and in a few cases, a few more dimes.
I'm usually more focused on closing early for that 2/3rds, 3/4th, or even 9/10th profit level, even if it leaves me out of the market for a few weeks or even a month. A closed position can't ever move against me!
If you do figure that out and can make it happen, or at least find out how to make the requests, let us know what you learn. If it's a voting type of mechanism, where more requests increases the likelihood of action, I suspect we can organize a ballot stuffing
If you do figure that out and can make it happen, or at least find out how to make the requests, let us know what you learn. If it's a voting type of mechanism, where more requests increases the likelihood of action, I suspect we can organize a ballot stuffing
Seems like you give them a call and they may or may not fulfill your request. Will give it a try tomorrow.
New Strike Price Requests.
I plan to be ready to buy them back at some point of time before end of November.
I agree on S&P likelihood, and certainly Q4 results should give a big boost, barring really bad macros. I am looking at Jan-2021 calls due to combination of decent premium and decent theta decay.
> Jan-2022 C1000
I had the plans to sell them ~Aug-31
Somehow my emotional side tricked me into ignoring my rational side
I would love to sell calls if they reach such level again. I want protection for the next 1 month. For that was looking for the calls with decent premium + decent theta decay. Picked Jan-2021 C600 for that combination. Plan is to buy them back when macros seemingly get stable, likely after elections.
> IV 73%
Doesn’t seem low if we look at it from historical perspective. The last few months are a bad comparison, as we had back to back catalysts, S&P + BatteryDay?
IMHO, This is maturity.
With short to mid term options you need to act like a trader, rather than like a HODL investor, in other words err on the side of taking the profit sooner, rather than waiting longer.
That said, the point of opportunity cost applies to all kinds of investments.
I am curious if you have any thoughts on selling Dec, Jan ~600 calls as protection for downturn in the next 3-6 weeks?
@All I've been pretty much passively reading here and other TMC threads for many years. For various reasons it's been a nightmare of a task for me to get some of my TSLA shares to be transferred to a broker that supports options trading.
Short story: my normal broker in Germany (comdirect) doesn't support trading non-German options. Finding a reliable broker in Germany that does was not simple. Actually moving TSLA to the new broker (InteractiveBrokers) has been a 3 month struggle. Then getting the depository location of the shares transferred to the US (so that I can trade options in US) took 3 weeks...Getting approval to trade options at IB is pending "due to overload of staff from COVID". Now we have Brexit looming with a transfer of IB customers from UK to locations within to EU pending (with unknown impact)..... Shitshow
Anyways, now I'm almost ready to become active and I wanted to thank @adiggs for opening this thread and everyone else who contributes here regularly for their posts and insights. I hope I can return something of value in the near future.
Always learning....
Short story: my normal broker in Germany (comdirect) doesn't support trading non-German options. Finding a reliable broker in Germany that does was not simple. Actually moving TSLA to the new broker (InteractiveBrokers) has been a 3 month struggle. Then getting the depository location of the shares transferred to the US (so that I can trade options in US) took 3 weeks...Getting approval to trade options at IB is pending "due to overload of staff from COVID". Now we have Brexit looming with a transfer of IB customers from UK to locations within to EU pending (with unknown impact)..... Shitshow
Anyways, now I'm almost ready to become active and I wanted to thank @adiggs for opening this thread and everyone else who contributes here regularly for their posts and insights. I hope I can return something of value in the near future.
Always learning....
With earnings, I think there will be a sell-off down to 370.
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Because with earnings sometimes there is a sell-off even with good news.
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To the first point, that buy and hold mentality has served me extraordinarily well for the TSLA shares I've accumulated over the years. And has failed me spectacularly on the few calls I've purchased (leading me to stop trying to leverage up results using call purchases
).For some reason, the mentality for selling options does work for me. I think because at the limit, I can "sell and hold" and at the end of the option, I will have earned all of the premium (whether I'm also assigned or not, the premium is all mine).
That idea of opportunity cost, risk, and reward applying to all investments - so very very true. One reason for the bias towards early close is that it also ends the possibility (in that position) of something suddenly going very, very wrong (a risk that is always present, even if the odds shrink towards zero, they never reach zero until the position is closed).
For your direction question, that's approximately the covered call position I am currently contemplating. I like the 600ish strike as that will be ~$100 beyond the ATH, so I like that gap the distant strike provides. For me, I think of covered calls as "pre-selling" shares at a desirable price point, with the outcome being that I collect a premium now for the privilege of pre-selling my shares, and the downside of collecting a premium and keeping my shares if/when we finish OTM.
Which is sort of like protection for a downturn - it's at least income / earnings that you can collect along the way while you wait for the share price to recover.
I have been planning to open a position today or tomorrow along those lines. I was also expecting the stock to be trading up today and tomorrow in anticipation of earnings - with the moves down the last couple of days, I might wait another few days.
Welcome aboard @FS_FRA . I like your ending observation - always learning. Good luck in your adventures, and I hope you'll share with us what you learn along the way. That's always been my purpose in this thread - learn what I can from people with more knowledge and experience.
And I think that means contributing back as well, to whatever degree that I can. At least if I wander into a hole, y'all will likely know how I got there so you can maybe avoid it yourself!
LN1_Casey
Draco dormiens nunquam titillandus
I hope not, because after earnings is when I need to sell my share for my car purchase.
Also, because shortly after earnings is the election, which may also cause a drop due to the uncertainty of everything (like if the Orange one loses and makes a statement that he'll refuse to step down). So it'd be a double impact. Great for future call buying, but not so much for those who need immediate use.
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