juanmedina
Active Member
we should open a call rolling club
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Folks looking at rolling their 04/16 calls 775+, will you be considering rolling first to a nearer expiry lower strike like 820 for 04/23, or go one more week out at a safer strike, 04/30 860C?
I'm looking at 4/23 as I don't want to go past the earning report (yet). Also, I believe that IV will be higher on 4/23 so that I should get a higher credit from doing 2 weekly rolls compared with a 2-week roll now. Someone please correct me if I am mistaken.Folks looking at rolling their 04/16 calls 775+, will you be considering rolling first to a nearer expiry lower strike like 820 for 04/23, or go one more week out at a safer strike, 04/30 860C?
At this point they might expire OTMFolks looking at rolling their 04/16 calls 775+, will you be considering rolling first to a nearer expiry lower strike like 820 for 04/23, or go one more week out at a safer strike, 04/30 860C?
While you have time (waiting for earnings) go to page one and watch the videos that @adiggs linked. Its a time investment but will really help with the Greeks and give you a baseline.Hi gang, I finally decided to give 'the Wheel' a shot, since my portfolio has grown enough that I wouldn't be terrified of parting with some shares. However my main goal is share accumulation so if shares get called I'll be selling puts the week after to convert that money back to shares.
I've been following this thread on and off since it's inception, but now things will get real I have some questions.
1) without going into numbers, do you generally only sell calls for a fraction of your holding or do you squeeze out all you can by selling calls against all your shares?
For example, say I have 1000 shares. Do I sell for example 1 agressive call, 2 less agressive calls and 7 very non-agressive calls (way OTM) to squeeze all the value I can out of my share holding? Or do you keep some shares safe in case of an uber bull run?
2) how agressive are you generally? I've read 20% OTM for weeklies a lot. But given the coming ER that seems risky to me.
3) do you try to time tops or not? Or do you dollar cost average (see question 1) by selling the same call for days on end?
4) in case your calls get near the money, do you:
a- try and roll upward to keep your shares?
b- take the loss (of shares) and switch to selling puts?
c- ... ?
Thanks a bunch. Will sit on the sidelines paper trading the Wheel till ER most likely. But want to inform myself as much as possible before starting to sell options.
(Note: I have experience in options, but mainly buying LEAPS on dips and converting them to shares/cash on highs. The Wheel is played using weeklies/monthlies I imagine, so on that front I've got to get a better feel for how the greeks fluctuate short term)
Regarding #1, personally I don't want to part with shares either, so I started by selling naked puts, and from a "wheel" perspective don't sell CCs against my main holdings. That is not to say I never sell CCs against them, but it's less frequent and more opportunistic (for instance as I recall in Jan I sold 10x Mar 1400c for $20 premium). Obviously though if I decide to let myself get assigned vs rolling, it will be on margin. I sell or roll weekly, and generally do not sell any over an ER. I modify my aggressiveness depending on the situation, for instance I had some 730p which were actually something like 15% OTM when I sold them but were ITM over the past weeks so I was rolling those for good premium, but simultaneously when the stock was bouncing off the 500s I sold some that were basically ATM. I'm not an expert and I'm sure I do some really dumb stuff, but so far it has been working ok for me.Hi gang, I finally decided to give 'the Wheel' a shot, since my portfolio has grown enough that I wouldn't be terrified of parting with some shares. However my main goal is share accumulation so if shares get called I'll be selling puts the week after to convert that money back to shares.
I've been following this thread on and off since it's inception, but now things will get real I have some questions.
1) without going into numbers, do you generally only sell calls for a fraction of your holding or do you squeeze out all you can by selling calls against all your shares?
For example, say I have 1000 shares. Do I sell for example 1 agressive call, 2 less agressive calls and 7 very non-agressive calls (way OTM) to squeeze all the value I can out of my share holding? Or do you keep some shares safe in case of an uber bull run?
2) how agressive are you generally? I've read 20% OTM for weeklies a lot. But given the coming ER that seems risky to me.
3) do you try to time tops or not? Or do you dollar cost average (see question 1) by selling the same call for days on end?
4) in case your calls get near the money, do you:
a- try and roll upward to keep your shares?
b- take the loss (of shares) and switch to selling puts?
c- ... ?
Thanks a bunch. Will sit on the sidelines paper trading the Wheel till ER most likely. But want to inform myself as much as possible before starting to sell options.
(Note: I have experience in options, but mainly buying LEAPS on dips and converting them to shares/cash on highs. The Wheel is played using weeklies/monthlies I imagine, so on that front I've got to get a better feel for how the greeks fluctuate short term)
Yah, I’ve heard of an iron condor, but you’ve got iron balls on that one.
Regarding #1, personally I don't want to part with shares either, so I started by selling naked puts, and from a "wheel" perspective don't sell CCs against my main holdings. That is not to say I never sell CCs against them, but it's less frequent and more opportunistic (for instance as I recall in Jan I sold 10x Mar 1400c for $20 premium). Obviously though if I decide to let myself get assigned vs rolling, it will be on margin. I sell or roll weekly, and generally do not sell any over an ER. I modify my aggressiveness depending on the situation, for instance I had some 730p which were actually something like 15% OTM when I sold them but were ITM over the past weeks so I was rolling those for good premium, but simultaneously when the stock was bouncing off the 500s I sold some that were basically ATM. I'm not an expert and I'm sure I do some really dumb stuff, but so far it has been working ok for me.
Question about rolling CC..
Rollingwise, is there some difference whether to roll on an upday, or on a more stable day or down day?
Further to the rolling question, is it better to roll on Thursday? Did I learn here that most often if someone is going to exercise early, they do it between Thu and Fri?
Hi gang, I finally decided to give 'the Wheel' a shot, since my portfolio has grown enough that I wouldn't be terrified of parting with some shares. However my main goal is share accumulation
1) without going into numbers, do you generally only sell calls for a fraction of your holding or do you squeeze out all you can by selling calls against all your shares?
2) how agressive are you generally? I've read 20% OTM for weeklies a lot. But given the coming ER that seems risky to me.
3) do you try to time tops or not? Or do you dollar cost average (see question 1) by selling the same call for days on end?
4) in case your calls get near the money, do you:
a- try and roll upward to keep your shares?
b- take the loss (of shares) and switch to selling puts?
c- ... ?
Hey! Welcome!!Hi gang, I finally decided to give 'the Wheel' a shot, since my portfolio has grown enough that I wouldn't be terrified of parting with some shares. However my main goal is share accumulation so if shares get called I'll be selling puts the week after to convert that money back to shares.
I've been following this thread on and off since it's inception, but now things will get real I have some questions.
1) without going into numbers, do you generally only sell calls for a fraction of your holding or do you squeeze out all you can by selling calls against all your shares?
For example, say I have 1000 shares. Do I sell for example 1 agressive call, 2 less agressive calls and 7 very non-agressive calls (way OTM) to squeeze all the value I can out of my share holding? Or do you keep some shares safe in case of an uber bull run?
2) how agressive are you generally? I've read 20% OTM for weeklies a lot. But given the coming ER that seems risky to me.
3) do you try to time tops or not? Or do you dollar cost average (see question 1) by selling the same call for days on end?
4) in case your calls get near the money, do you:
a- try and roll upward to keep your shares?
b- take the loss (of shares) and switch to selling puts?
c- ... ?
Thanks a bunch. Will sit on the sidelines paper trading the Wheel till ER most likely. But want to inform myself as much as possible before starting to sell options.
(Note: I have experience in options, but mainly buying LEAPS on dips and converting them to shares/cash on highs. The Wheel is played using weeklies/monthlies I imagine, so on that front I've got to get a better feel for how the greeks fluctuate short term)
Hi gang, I finally decided to give 'the Wheel' a shot, since my portfolio has grown enough that I wouldn't be terrified of parting with some shares. However my main goal is share accumulation so if shares get called I'll be selling puts the week after to convert that money back to shares.
I've been following this thread on and off since it's inception, but now things will get real I have some questions.
1) without going into numbers, do you generally only sell calls for a fraction of your holding or do you squeeze out all you can by selling calls against all your shares?
For example, say I have 1000 shares. Do I sell for example 1 agressive call, 2 less agressive calls and 7 very non-agressive calls (way OTM) to squeeze all the value I can out of my share holding? Or do you keep some shares safe in case of an uber bull run?
2) how agressive are you generally? I've read 20% OTM for weeklies a lot. But given the coming ER that seems risky to me.
3) do you try to time tops or not? Or do you dollar cost average (see question 1) by selling the same call for days on end?
4) in case your calls get near the money, do you:
a- try and roll upward to keep your shares?
b- take the loss (of shares) and switch to selling puts?
c- ... ?
Thanks a bunch. Will sit on the sidelines paper trading the Wheel till ER most likely. But want to inform myself as much as possible before starting to sell options.
(Note: I have experience in options, but mainly buying LEAPS on dips and converting them to shares/cash on highs. The Wheel is played using weeklies/monthlies I imagine, so on that front I've got to get a better feel for how the greeks fluctuate short term)
Naked puts by definition are on margin no? That said, if you have portfolio margin and you are rolling the puts if they are ITM, you are not paying any interest and are just "reserving" your margin at likely a much lower amount than the full cost to exercise.I do something similar. My methods have been highly unscientific though and I've been burned a few times as I took on too much risk through margin (note to self don't sell naked puts on margin - the past few months forced me to take enormous losses due to this)
I have also learned generally not to sell CCs through an ER, especially TSLA.
Naked puts by definition are on margin no? That said, if you have portfolio margin and you are rolling the puts if they are ITM, you are not paying any interest and are just "reserving" your margin at likely a much lower amount than the full cost to exercise.
I closed the 100 contracts for May 7 '21 $620 Put today for 70% gain. Not bad, felt lucky!This is really a good thread to learn option trading. Want to share some trades I made today.
First trade is I sold 100 contracts for May 7 '21 $620 Put at $23.8.
Second trade is I sold 30 contract for Jan21 '22 $500 Put at $63.6.
Wish me luck! Thanks!
Ouch, yeah it's more about managing margin leverage I suppose. I am comfortable selling naked puts, but I limit my margin use to about 10%.I looked it up after your post and believe naked put just means there is no corresponding offsetting position. In other words, if I'm selling a put = bullish position, but don't have a corresponding bear position of some kind i.e. a Covered Call, then it's considered a naked put. Maybe? I'm not an expert.
In any case, my major and extremely costly mistake was that during the runup of Dec 20' to Jan 20', I was highly leveraged and basically full on bullish positions such as sold puts. When the share price began to decline in late January, I wasn't fast enough in rotating out these positions...along with my stubbornness and maybe misguided optimism, and as the SP declined, so too did my margin leverage. While I was able to extend some of my sold puts out into later expiry and lower strikes, my margin decreased so much that ultimately I was forced to close out a large amount of sold put positions at a major loss. This combined with an ill-timed and bad strike Call position equated to watching my portfolio drop by about 55% between January to the Tesla low ~March 8. Maybe the worst 6 weeks of my trading life. Hence why I started to seek out information and advice on these forums, learning more about the wheel, rolling strategies, and so forth from those smarter than I!