Wiki Selling TSLA Options - Be the House

[ammulder]

Volume looks higher than normal, price is going up though NASDAQ is down... I'm pretty nervous holding cc730... but week after week there's a pulldown later on a lower volume day. Max pain still says 700. Not an easy decision, but for now I plan to wait and see.

 

[Drezil]

Volume looks higher than normal, price is going up though NASDAQ is down... I'm pretty nervous holding cc730... but week after week there's a pulldown later on a lower volume day. Max pain still says 700. Not an easy decision, but for now I plan to wait and see.

i chicked out and rolled 730c to 740c next week for $1.4 credit.

 

[cbh03]

Volume looks higher than normal, price is going up though NASDAQ is down... I'm pretty nervous holding cc730... but week after week there's a pulldown later on a lower volume day. Max pain still says 700. Not an easy decision, but for now I plan to wait and see.

I am in the same position (holding cc730 for this Friday) and am also going to wait and see. If it breaks 750, then I will consider a 1/2 week roll vs. BTC and take a loss.

 

[Chenkers]

I opened 120 x 680/705 750/775 IC's at $4.50 just after open and just added another 105 at $4.20.

I also have a bunch of $750CC and 90 x 750/775 BCS open for this week.

 

[juanmedina]

I roll up a 750lcc that I sold by mistake earlier to 780lcc. I sold 780/810 BCS. I still have all my 750cc's.

 

[bkp_duke]

I opened 120 x 680/705 750/775 IC's at $4.50 just after open and just added another 105 at $4.20.

I also have a bunch of $750CC and 90 x 750/775 BCS open for this week.

Thanks for this. Did something similar with 20 x 680/720 750/780 IC for $4

Probably larger than I should have gone for my first IC, but why not jump in head first?

 

[Drezil]

Why now? If you wait until Friday you will get a better roll once the theta is drained out, no?

depends. δ-difference was ~0.1. If SP rises further, then the roll becomes more & more expensive. At least it seemed this way during the rise.
If SP would stay ~730, then i would not need to roll at all.

Thats why i said i "chickened out". In hindsignt (with SP @739) it was the right decision. I even managed to squeak out 1.1k (selling @13, buyback 50% @9, sell again @13.xx Increased cost-basis by 0.43 while reaking in 1.1k).
This bought me a lot peace of mind.

Also overall it is a huge gain. If SP rises to 740 by next friday the long-sided call will also gain an additional $10 compared to the 730 i had for this friday.

 

[Mulligan Jake]

I am in the same position (holding cc730 for this Friday) and am also going to wait and see. If it breaks 750, then I will consider a 1/2 week roll vs. BTC and take a loss.

If my -3CC735 (cost 700) for this Friday execute then I just get aggressive with selling puts next week.

 

[AquaY]

Well…I finally sold some calls today 5X Sep 10 750 calls for 7$ each, 5X Oct 1 800 calls for 8$ each. Also sold 3X sep 10 700 puts for 8$ each.

There is an obviously strong momentum in the stock and my guess is we will see 750$ tomorrow for sure. Might roll the 750 calls if we end up around 750 for this week.

I think we have some more up side and am holding off on selling calls.
Especially since I have short calls ( 750s and 770s) for 9/3 and I don't want to roll them yet because
1) They are not ITM,.
2) Probability is they still expire OTM
3) I think we have more upside and don't wish to short more calls leaving $ on the table.

Maybe this is the time to buy some LEAPs?

I just traded 20 BPS +540/-690 for 9/3 @ 1.47 credit.
While I generally don't sell Puts in a rally for small credits I'm looking at this as a short time gravy trade. Or to borrow @Lycanthrope's terms, shitputs. LOL
Running the #s there's like a 97% chance they expire worthless, I had the margin and I figure with those odds why not? While it is less than a 1% return ( .00767) for 4 days that's $2900+.
I had wanted to do 50 contracts but the volume was light and I didn't want to make my execution *sugar*.
So I did 20

 

[UltradoomY]

Something to consider before opening leaps this week is that the new September 23's will be available the week of this September 17th expiration.
I am loading up some dry powder for these opening up and will be getting a mix of ITM, ATM and OTM calls for the farthest date out possible.
Also anyone looking to roll leaps because time value is running low might want to look at these as well.

 

[adiggs]

After stressing about it in bed for much of last night I closed out one of my 755cc at a loss, didn't roll. Still up pretty well for the week. I didn't want to get shares called away that are currently in long term status. If the 755 hits I'll take the advice and do the wheel for the first time.

I know that I'm very small potatoes in this thread but I hope that my n00b posts can be of help to others with ~500 shares.

My focus is on the positions, why chosen (entry and exit), strategies, stuff like that. At our scale it appears that this works, with the market easily absorbing our volume.

Now if we were handling a $200M account and moving $100M in and out of BPS - my guess is that the market would stop absorbing that weekly volume as if it were nothing. Heck a $100 spread size is 10k contracts - that might even be enough to get written about periodically regarding big market positions.

This week it’s my 755s that have me a little nervous. Do I simply roll now or wait? Do options often get executed before Friday? Best to wait to be ITM or best to roll before?

Whether to wait or not - I dunno. But outside of the hour just after expiration I've never heard of an OTM option being exercised early. On those 755s if somebody were to exercise right now (shares at $737) you would get to keep all of the premium you originally received PLUS you would sell those covered shares at $755.

On lcc's, you would find that you had just sold 100 shares you don't own (your account would be short 100 shares), and would need to buy to close those shares at $737. So you'd get $18/share over the current share price PLUS the original premium.

I would view early exercise on that position as a gift. Of course you might also have a low cost basis and be presented with a tax bill you hadn't planned on. That's part of the risk with selling covered calls against low cost basis shares (I've done a fair bit of that in the past).

 

[adiggs]

That is an awful lot of 700 strike calls already accumulated

 

[ReddyLeaf]

i chicked out and rolled 730c to 740c next week for $1.4 credit.

Same here. Rolled everything to next week for a small credit. If we get a pull back after China numbers I will close out and wait it out. I knew that I shouldn’t sell calls this week because of a likely $50-$70 SP rise, even closed my GTC orders on Sunday night. Then, got courage (stupidity?) on Monday. Oops. Oh well, kicking the can down the road.

 

[EnzoXYZ]

I have 730cc, 740cc, 755cc for this week. Won’t roll until Friday. Been doing well letting most expire worthless. Since I have 400 shares margined been debating of letting some go as I feel short term 730-740 is a ok price.

 

[phantasms]

Whether to wait or not - I dunno. But outside of the hour just after expiration I've never heard of an OTM option being exercised early. On those 755s if somebody were to exercise right now (shares at $737) you would get to keep all of the premium you originally received PLUS you would sell those covered shares at $755.

On lcc's, you would find that you had just sold 100 shares you don't own (your account would be short 100 shares), and would need to buy to close those shares at $737. So you'd get $18/share over the current share price PLUS the original premium.

I would view early exercise on that position as a gift. Of course you might also have a low cost basis and be presented with a tax bill you hadn't planned on. That's part of the risk with selling covered calls against low cost basis shares (I've done a fair bit of that in the past).

Thank you very much. I wouldn't figure the 755 would get exercised OTM but my concern was the price goes up to 755+ mid week before the MMs are able to pull it to 750 or less on Friday. Would you say it's equally rare for an option to get exercised before Friday if it's already ITM?

As always, Thank you!

Best,
Gene

 

[stealthyc]

Thank you very much. I wouldn't figure the 755 would get exercised OTM but my concern was the price goes up to 755+ mid week before the MMs are able to pull it to 750 or less on Friday. Would you say it's equally rare for an option to get exercised before Friday if it's already ITM?

As always, Thank you!

Best,
Gene

It is extremely rare unless it is DITM.

 

[InTheShadows]

The size of your potatoes doesn't matter. All the info here is applicable to any account balance.

Well almost. Trying to figure out how to make it applicable to my sons $6000 account.

 

[Yoona]

Well almost. Trying to figure out how to make it applicable to my sons $6000 account.

Very interesting you mentioned this. Today is the first day my son's CAD TFSA (aka US Roth IRA) was activated . Gave him $6k (the max annual contribution limit allowed) this morning and he now has 6 TSLA @729 to start his journey.

 

[corduroy]

Very interesting you mentioned this. Today is the first day my son's CAD TFSA (aka US Roth IRA) was activated . Gave him $6k (the max annual contribution limit allowed) this morning and he now has 6 TSLA @729 to start his journey.

Already up $55. Great start!

 

[pz1975]

Since the “wheel” idea is really no longer part of this thread, I suggest a thread title change.

I would recommend “adiggs TSLA Options Strategy Thread”