corduroy
Active Member
I know how you feel. Just when I think I've got a good working knowledge of options, bxr140 comes back and reminds us how fast and loose some of us are playing this game.
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Wiki Selling TSLA Options - Be the House
- Thread starter adiggs
- Start date
pz1975
Active Member
Usually the bid/ask spreads are awful at first so I tend to avoid new LEAPS for at least a month or so until the gap becomes reasonable.
willow_hiller
Well-Known Member
Thanks, I was thinking the pricing might be wonky at first until traders can decide on a price. I was also thinking there may be good arbitrage opportunities.
The relationship of prices at certain strikes seems relatively stable over time. So theoretically it should be possible to forecast where the market will eventually settle on those new LEAPS?
pz1975
Active Member
I’m pretty sure the prices will be set based on options fundamentals and there really shouldn’t be any reason for mispricing/arbitrage opportunities. It’s more just that the bid/ask spread will be very wide and thus LEAPS will be more expensive to buy and cheaper to sell at first compared to weeks later when the spread tightens.
I've mostly been seeing bid/ask spreads on the order of $10-15. I've also had pretty good success with quick fills at the mid point.
The way I look at it - I plan to own these things for most of their duration (to back call sales), and by being deep ITM the % of option premium in that $5ish b/a slippage is pretty small potatoes ($300 option premiums with +/- $5 due to b/a is about what I've seen on the options I've been buying).
But I'm $200+ ITM at purchase - I bet the wide b/a dynamic is a lot more important if one is buying OTM.
pz1975
Active Member
Good points. I’m pretty much only buy OTM LEAPS so that’s where I’ve noticed the big spreads. I even feel like they can be $20-30 at first if I remember correctly.
dc_h
Active Member
Looks like China numbers are very positive. Will be interesting if mm’s can keep control this morning. Per market 760. I won’t roll 755 yet.
Welp, glad I sold all of my unprotected call options yesterday.
Still have about 30 calls on inside of spreads @ 765 and 770. Let's see if the daily BB rises too far by Friday or (more likely since SP is already well over it pre-market) fails entirely. There's a technical resistance at 765 as well, but the call walls aren't as tall as I'd like to see them. We'll see if 760 can hold, but I'll be happy if it doesn't as well!
Still have about 30 calls on inside of spreads @ 765 and 770. Let's see if the daily BB rises too far by Friday or (more likely since SP is already well over it pre-market) fails entirely. There's a technical resistance at 765 as well, but the call walls aren't as tall as I'd like to see them. We'll see if 760 can hold, but I'll be happy if it doesn't as well!
AquaY
Member
well, looks like I'm glad ( again) I decided not to sell any calls yesterday and did a nice BPS for Friday instead.
I don't put too much into AHT but
($760.91+7.99 (+1.06%) Bid x Size $760.70 x 200 Ask x Size $761.24 x 100
Before hours: Sep 8, 2021, 7:58 AM ET)
seems indicative of a strong open especially with most futures looking flat
I don't put too much into AHT but
($760.91+7.99 (+1.06%) Bid x Size $760.70 x 200 Ask x Size $761.24 x 100
Before hours: Sep 8, 2021, 7:58 AM ET)
seems indicative of a strong open especially with most futures looking flat
When is too early to roll CC that are $5 OTM (nine days)?I've apparently missed out on the peak today. I'm holding onto me BPS for this week (710 and 720s). They're ahead 60%ish, and I'm probably better off closing and looking for a new entry tomorrow. But feeling safe with those and they're large enough to still have noticeable absolute $ to be earned. I'll revisit this position later in the day if we move back up.
On the big rise I've sold some 765 lcc for this week collecting 3.65. I'm looking for not much more run up this week.
And while I was at it I threw in some really far OTM call spreads to complete iron condors. 800/900s and 800/880s for around .45 (there isn't much different in option premiums for this week at the 880 level). In doing so I've learned something that applies at least to Fidelity. The 800/880s are in an IRA where I have $80 wide put spreads open. I tried to open these using $100 spread sizes and was told I need to increase buying power to complete that trade.
When I switched to an $80 spread size to match the put spread size, that order completed with no trouble. So apparently legging into an IC in an IRA, at least with Fidelity, needs matching spread sizes in addition to matching expiration dates (it's not an IC if the expirations are different).
They used to call it finding yourself.
This is your vacation. It’s always been your vacation . . .
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I'm on the fence here. I've got a 750 I sold, half with the intention of putting it through the wheel. I'm tempted to roll up to 760 next week for ~2$ profit. The shares are in short term with a relatively high cost basis so there wouldn't be much tax issue. I just worry that the stock might be starting to gap up. Then again, next week being the triple might send it back down. Good problems to have.
2024 LEAPS? I think it will be Sep 2023's listed next, on September 17, no?
I often make crazy low bids, always to no avail.
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Ok, did it. Timed the roll decently for a $4.21 profit. If only a penny less.
willow_hiller
Well-Known Member
It's part of the reason I asked. On the last question in the FAQ LEAPS® & Cycles it says:
"All of the 2024 LEAPS® will be introduced on Monday, September 13th, 2021."
pz1975
Active Member
I expect January 2024s to be released in September. They used to get released in November every year but the schedule changed at some point I think.
alterac000
Member
With several brokers charging $0.65 per contract trade you're basically there
Opened some -$800/+$850 bear call spreads for $0.96 per contract this morning, while keeping my covered -$800c position open. Also rolled my -$690p position to -$730p to milk an additional $1.00 in premium per contract. Will open more on a push below $750.
dc_h
Active Member
jeewee3000
Active Member
Joy to the MM's.
Closed all my 9/10 750cc's for 40% profit. Closed some of my 760cc's for 50% profit.
Leaving only some 760cc's run for the remainder of the week. If it pops again, I can sell more 760cc's or 770ccs. (But I think I'll stay away from 750cc's now).
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