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Wiki Selling TSLA Options - Be the House
- Thread starter adiggs
- Start date
My philosophy is that if you're not comfortable in a position and can exit for a profit, you should absolutely do so. No one ever died from taking a profit. On the other hand, most of the time I'd make more money if I just stayed in a trade. Those few times where I've been caught holding the bag have made me a little gun shy.
I'm also holding 700c this week, and I almost closed them during the MMD today, but we didn't go down far enough for me. So instead I opened up some 720c and will try to close the 700cs on a MMD. I'm hoping that uncertainty around Jackson Hole and JP's speech on Friday will tamp us down to around 700 for part of the day.
If your original investment thesis for selling the $700's is the same, then don't do anything.
If it has changed, then I (not advice of course) would roll Friday before the fed meeting.
Market in general has been down on fed meeting days even if the news is good. Just the algo bots seeing it and selling.
So, that would be where I would look to roll if needed.
Golden cross looks to be happening Friday or Monday as they are less than $2 a part now. They have been converging this week about $0.75 a day.
jeewee3000
Active Member
The investment thesis of "What would the S3XY old dude do?"
or "What can I get away with this week?"In all seriousness, I'm still expecting the MM's have a good shot at keeping the SP close to $700. Being ITM just makes me antsy.
jeewee3000
Active Member
Given the trading volume in today's first hour, I'm more confident the MM's will keep control this week (well, at least today):
Monday's first hour: 6.43M
Tuesday: 5.68M
Today: 4.06M
Also the second trading hour (which isn't over yet), is absolutely devoid of volume. <insert Mr. Burns "Excellent" meme>
Monday's first hour: 6.43M
Tuesday: 5.68M
Today: 4.06M
Also the second trading hour (which isn't over yet), is absolutely devoid of volume. <insert Mr. Burns "Excellent" meme>
Agreed, me too, but I decided to roll my -c715s, -c720s, -c725s to next week -c725s for about $6.50 credit. Also rolled to -p700s for $9 credit. I still think everything would have expired worthless, but just decided to stop watching the SP this week. My cash buffer is much better now, so will put in a few GTC share purchases around and below MaxPain.
Be careful about next week. If I recall correctly, the last time TSLA had a Golden Cross, the stock ripped upward over $50 that week.
To me this week's price action tells me a whale is accumulating. Even with the miniscule volume, the MM's can't push the price down, and quite the opposite, a large buy order comes in, spiking the price, basically daring the MM's to naked short to bring it back down. Bear Trap. Wait till a price spike occurs with sustained volume, the stock will rip higher. I'm going to hold off on selling Calls until well after the Golden Cross. Bought back some 705s and 720s I had sold on Monday.
To me this week's price action tells me a whale is accumulating. Even with the miniscule volume, the MM's can't push the price down, and quite the opposite, a large buy order comes in, spiking the price, basically daring the MM's to naked short to bring it back down. Bear Trap. Wait till a price spike occurs with sustained volume, the stock will rip higher. I'm going to hold off on selling Calls until well after the Golden Cross. Bought back some 705s and 720s I had sold on Monday.
dc_h
Active Member
Looking at max pain and today's option activity, it looks like max pain will reset to 700 or 710 tomorrow. I have a covered calls going from 1 cc@715, 2 at 720, and more up to 740. I have nothing going out to next week yet. If we hold 710Papafox is calling for mm to push for a 700 close on Friday, but today's activity appears to be pushing the range higher. I hope to start my cc's higher next week, being cautious ahead of more news about big Europe shipments, more S deliveries and positive feedback from beta 9.3 going into next week. I'll start looking at rolling my farther OTM 740's tomorrow and probably shift up to 760. If we don't rise next week, I'll roll the 760 down. Wish I had Lycanthrops and others courage and luck.
I agree - I think we're setting up for an upward move. Honestly, I think it would have happened last week if not for the NHTSA news.
EDIT: Of course, with that said, the wild card is what Fed Chair Powell will say on Friday about tapering, etc.
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corduroy
Active Member
Sounds like a good time to sell some aggressive puts/BPSs if we get any dip. (Not advice)
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OT post here - Has anyone gone ahead and set up to be a Professional Trader?
I am considering it heavily as I spend more time and effort in trading.
Huge benefit to taxation and losses along with being able to expense out everything I am paying for and upgrading.
Just need to pay taxes quarterly, which a I am familiar with anyway.
Don't need to reply here if you want to PM that is fine as well.
Appreciate any feedback and or hurdles, problems, benefits.
Cheers
I am considering it heavily as I spend more time and effort in trading.
Huge benefit to taxation and losses along with being able to expense out everything I am paying for and upgrading.
Just need to pay taxes quarterly, which a I am familiar with anyway.
Don't need to reply here if you want to PM that is fine as well.
Appreciate any feedback and or hurdles, problems, benefits.
Cheers
Never crossed my mind before, but I'm curious as to how it benefits taxation? With transaction fees as low as they are ($0 per trade and 50c per contract * 1000 contracts per month gets lost in the noise), not sure if being able to expense that would outweigh any costs (those professional trader warnings seem to indicate that there's a price to be paid)?
Just decided to take my 725cc for this week off the table. Roughly 25% gain on the position but I agree with others - I see a better entry (higher share price) arriving soon.
Counter to my recent and new pattern I decided to sell BPS anyway (sell puts on a down day; sell calls on an up day). I am both feeling like a move up is likely, as well as 700 being a solid support to the downside.
Therefore - open a pile of BPS at the 700 strike and a variety of spread sizes. 500/700 in my most important and conservative account. 550/700 in a second account, and 630/700 in the account I'm most aggressive in (maximize leverage here).
For those following along at home you'll see that I am expanding my spread sizes above $100 in this round. What I'm really focused on is the midpoint of the spread and keeping that midpoint in a range I consider highly unlikely while also expanding the window in which effective management is possible. This means that my aggressive position is effectively manageable (net credits required, strike improvement possible) down to $665; safe but not my own definition for conservative.
I think (today - I change what I think constantly
) that I like this variety of spread sizes and I'm looking forward to seeing how these positions evolve. Bigger picture I expect the spread sizes to increase and decrease as the shares go up and down, and as the IV goes up and down. If the shares were $1500 today (roughly 2x) then I think that a $200 spread size won't be nearly as conservative as it is today for instance. And if IV has doubled back into the high 70s area, then I am certain that a $200 spread size won't be as conservative as I'd like to be.
Counter to my recent and new pattern I decided to sell BPS anyway (sell puts on a down day; sell calls on an up day). I am both feeling like a move up is likely, as well as 700 being a solid support to the downside.
Therefore - open a pile of BPS at the 700 strike and a variety of spread sizes. 500/700 in my most important and conservative account. 550/700 in a second account, and 630/700 in the account I'm most aggressive in (maximize leverage here).
For those following along at home you'll see that I am expanding my spread sizes above $100 in this round. What I'm really focused on is the midpoint of the spread and keeping that midpoint in a range I consider highly unlikely while also expanding the window in which effective management is possible. This means that my aggressive position is effectively manageable (net credits required, strike improvement possible) down to $665; safe but not my own definition for conservative.
I think (today - I change what I think constantly
) that I like this variety of spread sizes and I'm looking forward to seeing how these positions evolve. Bigger picture I expect the spread sizes to increase and decrease as the shares go up and down, and as the IV goes up and down. If the shares were $1500 today (roughly 2x) then I think that a $200 spread size won't be nearly as conservative as it is today for instance. And if IV has doubled back into the high 70s area, then I am certain that a $200 spread size won't be as conservative as I'd like to be.
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I'm interested in learning more about the Professional Trader thoughts and rationale as well @UltradoomY . Is this a big enough topic to be its own thread? That might also draw other options traders that aren't already here in this thread
When I've looked at something that I think is in this space - setting up an LLC / company in which to do my trading - I either didn't qualify or the benefits seemed minimal next to the work to set it up and manage it.
WHere are you getting .50/contract @Oil4AsphaultOnly ? I'm paying .65 both ways!!! Cuz that .15/contract totally makes the difference (not)
I'm getting $0.20/contract (each way, though a BTC at/under $0.10 is free) at E*TRADE. (I did have to ask/negotiate to get the 60% discount from their normal $0.50/contract price.)WHere are you getting .50/contract @Oil4AsphaultOnly ? I'm paying .65 both ways!!! Cuz that .15/contract totally makes the difference (not)
Sure, I will create a thread.I'm interested in learning more about the Professional Trader thoughts and rationale as well @UltradoomY . Is this a big enough topic to be its own thread? That might also draw other options traders that aren't already here in this thread
When I've looked at something that I think is in this space - setting up an LLC / company in which to do my trading - I either didn't qualify or the benefits seemed minimal next to the work to set it up and manage it.
WHere are you getting .50/contract @Oil4AsphaultOnly ? I'm paying .65 both ways!!! Cuz that .15/contract totally makes the difference (not)
The basics are if you trade "a majority" of the time the market is open and make your income from trading you qualify.
This allows you to take all expenses out of profits / losses - monitors, trade fees, margin interest, home office exp, any seminars or platform expenses and forums or organization expenses as well.
Instead of being subject to capital gains, it is treated as ordinary income and you are not capped at $3k a year losses.
There is a lot more to it, but those are the basics.
One question I have is regarding margin management. I assume 500/700 spread is close to 20k margin depending on premium, and at least for me typically a sold put on portfolio margin is approximately 24k. So my question is that large of a spread worth it vs a straight sold put?Just decided to take my 725cc for this week off the table. Roughly 25% gain on the position but I agree with others - I see a better entry (higher share price) arriving soon.
Counter to my recent and new pattern I decided to sell BPS anyway (sell puts on a down day; sell calls on an up day). I am both feeling like a move up is likely, as well as 700 being a solid support to the downside.
Therefore - open a pile of BPS at the 700 strike and a variety of spread sizes. 500/700 in my most important and conservative account. 550/700 in a second account, and 630/700 in the account I'm most aggressive in (maximize leverage here).
For those following along at home you'll see that I am expanding my spread sizes above $100 in this round. What I'm really focused on is the midpoint of the spread and keeping that midpoint in a range I consider highly unlikely while also expanding the window in which effective management is possible. This means that my aggressive position is effectively manageable (net credits required, strike improvement possible) down to $665; safe but not my own definition for conservative.
I think (today - I change what I think constantly
I think one of the main differences is that cost basis becomes all mark to market and you can deduct all losses and expenses, but you also might need to pay self-employment tax.I'm interested in learning more about the Professional Trader thoughts and rationale as well @UltradoomY . Is this a big enough topic to be its own thread? That might also draw other options traders that aren't already here in this thread
When I've looked at something that I think is in this space - setting up an LLC / company in which to do my trading - I either didn't qualify or the benefits seemed minimal next to the work to set it up and manage it.
WHere are you getting .50/contract @Oil4AsphaultOnly ? I'm paying .65 both ways!!! Cuz that .15/contract totally makes the difference (not)
corduroy
Active Member
Investment income is not subject to self employment tax for professional traders, one of the advantages.
LN1_Casey
Draco dormiens nunquam titillandus
Huh, I bet the MM's are struggling to keep the Stock price as low as they can as they scramble to close their calls. The Call Walls at 700 and 710 have dramatically shrunk these last couple days, though 715 has popped a bit and there is still the monster of 720 to tackle.
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