Wiki Selling TSLA Options - Be the House

[AquaY]

The power of this forum is that it is open to anyone (except for those with a hidden agenda, and those usually get booted after a while). Input from newcomers is necessary to keep the forum vibrant and relevant. Closing off sections will make it bleed to death.

I didn't really know what private meant in the forum. I thought it was not open to non members so it was away from google search etc.
I thought it would be open to anyone that signed up to the forum.
Everything's a balancing act . You want protection and also free exchange .


ETA my BPS sold today for 10/15 and 10/22

STO 10/15 +600/700 @ $3.90
STO 10/22 +570/-670 @$7.60
STO 10/22 +625/-725 @$10.70

 

[bkp_duke]

Went with 70 x 695/725 BPS @ $3.00 each for 10/15.

Hopefully see a nice upswing and can sell the BCS early next week.

 

[ReddyLeaf]

Ok, someone put down the gauntlet for Oct 29th. 16,000 BPS 750/800, plus 19,000 c820s. For the BPS, I calculate $800M risk, $28M profit (3.5%) ($44.75-$27.2)x100x16,000=$28M, 16,000x100x50=$80M). Definitely not one of our lot. 3.5% for 3 weeks? I can almost get that selling CSPs and CCs.

Edit: Thinking a bit more about this suggests it might be an institutional hedge for the end of the month. The c820 is $20, close to the net BPS $17.5.

 

[samppa]

So, education time!
Sold a put credit spread -p785/+p685, oct 15, for $13.93. Only one contract. Way closer to the money that I'm comfortable with - plan is to see how to manage this if it gets ITM. My current thinking is that if short strike goes ITM, I will roll out a week for max strike improvement, and about zero credits.

My bigger position for next week is -p750/+p650. Opened these just now as well, after closing this weeks spreads that we're at around 80-90% profit.

If we get an IV crush tomorrow or a big pop, might close these.. we'll see. IV already slightly crushed this week after p&d, probably won't change much after tonight.

Today's dip brought TSLA down to 783, and so short strike was threatened.
I rolled this experimental learning contract to oct22 -p760/+p660 for $0.39 credit. Got a really nice strike improvement!

So now this contract is Bull put spread, oct22, -p760/+660, cumulative credit $14.32.

 

[KTC Lurker]

Opened a few positions this week after a stressful week last week and early this week managing my SHOP BPS -1390/+1320 that went in the money last week. This management has left me low on leverage, so I only opened a small TSLA position for next week:

10/15 - 50x -740/+690 & 50x -730/+670

The -740 position was opened yesterday before the big afternoon spike and the -730 this morning at the low. Not a bad setup for next week with a max premium yield of $55K

 

[ChefBoyardee]

View attachment 719143Ok, someone put down the gauntlet for Oct 29th. 16,000 BPS 750/800, plus 19,000 c820s. For the BPS, I calculate $800M risk, $28M profit (3.5%) ($44.75-$27.2)x100x16,000=$28M, 16,000x100x50=$80M). Definitely not one of our lot. 3.5% for 3 weeks? I can almost get that selling CSPs and CCs.

Edit: Thinking a bit more about this suggests it might be an institutional hedge for the end of the month. The c820 is $20, close to the net BPS $17.5.

The return on the 800/750 is 50%: 27m credit and 53m risk

| Options Profit Calculator

Calculator shows projected profit and loss over time.

opcalc.com

 

[deerfield]

Wow...10/15 calls took a beating. Closed out my -860/910 opened yesterday for 78% gain!

 

[tradenewbie]

For those open BCS for Oct 22nd already (because of high IV), are you guys planning to close it next week or wait till the week of Oct 22nd to close?

 

[ammulder]

So early on I sold some c850 for next week for $2, and when things turned down, I put in a buy order for $1. It triggered a few minutes ago. Nice dinner tonight?

One the rolling a 685/785 put spread out a week to 660/760 -- that's a better strike improvement that I would have expected, perhaps because action was taken early before things got too grim. But on the total proceeds of $14, it looks like the 660/760 for next week is going for about $9.50 now. If it was the same again next week (less a bit for rolling early), it would still be better to sell the 660/760 two weeks in a row than to sell higher for the first week and roll down for the second. Maybe the numbers were different earlier, but the bottom line is, I wouldn't seek out the strategy of selling ATM/ITM and then rolling down. I think this was instead preparation for a time one might be forced into that position, but good to be clear so nobody draws the wrong conclusion.

Finally, so long as we're being risky, I sold one 685/775 put spread for next week. I don't mind massaging it if needed. Maybe it won't be bad for me to have one trade that needs hand-holding, because having something to do will be a better way to pass those days when I'm otherwise grinding my teeth to force myself to do nothing. Or maybe I'm just kidding myself.

 

[sleepyinCA]

I was heavily into LEAPS from early 2020 and have still been buying and holding LEAPS with 2023/2024 expirations, but just started dipping my toes in the BPS game last week after admiring everyone's skills and absorbing all the wisdom on this thread over the last few months. In case anyone is interested in a newbie's journey...

I'm starting out very very conservatively since I don't feel confident on my rolling skills yet, but for 10/8 expiration I did:
STO +610/-660 @ 3.1 on 10/1
BTC 1/3 of above @ 0.62 on 10/5
BTC 2/3 of above @ 0.20 on 10/7

STO +600/-650 @ 0.58 on 10/5
BTC above @ 0.04 on 10/8

For 10/15 expiration, so far I've STO +640/-690 @ 2.85 this morning. Will look to add more later today or early next week.

Thank you all for your wealth of knowledge! Feel so grateful to be a part of this community.

 

[samppa]

So early on I sold some c850 for next week for $2, and when things turned down, I put in a buy order for $1. It triggered a few minutes ago. Nice dinner tonight?

One the rolling a 685/785 put spread out a week to 660/760 -- that's a better strike improvement that I would have expected, perhaps because action was taken early before things got too grim. But on the total proceeds of $14, it looks like the 660/760 for next week is going for about $9.50 now. If it was the same again next week (less a bit for rolling early), it would still be better to sell the 660/760 two weeks in a row than to sell higher for the first week and roll down for the second. Maybe the numbers were different earlier, but the bottom line is, I wouldn't seek out the strategy of selling ATM/ITM and then rolling down. I think this was instead preparation for a time one might be forced into that position, but good to be clear so nobody draws the wrong conclusion.

Finally, so long as we're being risky, I sold one 685/775 put spread for next week. I don't mind massaging it if needed. Maybe it won't be bad for me to have one trade that needs hand-holding, because having something to do will be a better way to pass those days when I'm otherwise grinding my teeth to force myself to do nothing. Or maybe I'm just kidding myself.

Yes, my intention here was to force myself into a position where I have to roll a bull put spread. That's why it's only one contract. Not really seeking to do this as a strategy, but to prepare for such a scenario.
Rising IV into oct22 probably has some effect here too.

 

[tradenewbie]

Both yesterday and today is also range bound for couple hours, yesterday decided to be up starting from 2:30am, wondering what would happen later today

 

[Discoducky]

Yes, my intention here was to force myself into a position where I have to roll a bull put spread. That's why it's only one contract. Not really seeking to do this as a strategy, but to prepare for such a scenario.
Rising IV into oct22 probably has some effect here too.

I also forced a role from a tight position to feel the impacts, ensure I understood the mechanics, timings, fluctuations...yatta yatta. I'm an engineer pretending to be an options trader. Fake it til ya make it. In reality I've retired on these earnings so I'm grateful for this thread as well and all y'all.

 

[mannix]

I am one of the many lurkers who watch and learn from all the generous sharing of positions and strategy on this thread. Thank you for taking the time to share with us newbies! I have tried a few covered calls, and a month or so of selling a cash covered put (my broker doesn’t allow IRA spreads), and so far have never come close to ending in the money. But I close out the put to avoid after-hour surprises based on your recommendations.

Two quick questions:
1. I am thinking of transferIng to Interactional Brokers because of the low margin rates. I have seen people mention fidelity, Schwab, and Etrade here but less about IB. I understand that it is challenging to use? Can anyone share your experience with IB in the US for IRAs? If you have a referral code feel free to pass it on by message or dm.

2. Since I have never been able to sell spreads, I have a beginner question. If the stock price ends up lower than the insurance leg of a BPS, do you have to notify the broker that you want to use the bought put or does it happen automatically? In other words, is the spread max risk cost something that is automated or do you have to manually contact the broker to use it? Let me know if that doesn’t make sense.

Thanks again!

 

[rikkert]

Rookie question: When using spreads, essentially selling and buying an option with the same expiration date (but a different strike) I would expect the theta value to be equal for both options.

So, being long and short the same time value would mean that time does not impact spreads, right?

But, if that is the case though, why do spreads with expirations further into the future have a higher value (for the same strikes)?

For example:
- a 700/600 BPS for 15 Oct nets $337 of credit.
- for 22 Oct this is already $920 of credit.

Given the 3 dimensions of options pricing (delta, theta, volatility)
- I expect delta should be the same for these spreads
- I expect IV should be the same too
- ... so does theta impact BPS after all?

Which one of my assumptions is wrong?

 

[generalenthu]

I am one of the many lurkers who watch and learn from all the generous sharing of positions and strategy on this thread. Thank you for taking the time to share with us newbies! I have tried a few covered calls, and a month or so of selling a cash covered put (my broker doesn’t allow IRA spreads), and so far have never come close to ending in the money. But I close out the put to avoid after-hour surprises based on your recommendations.

Two quick questions:
1. I am thinking of transferIng to Interactional Brokers because of the low margin rates. I have seen people mention fidelity, Schwab, and Etrade here but less about IB. I understand that it is challenging to use? Can anyone share your experience with IB in the US for IRAs? If you have a referral code feel free to pass it on by message or dm.

2. Since I have never been able to sell spreads, I have a beginner question. If the stock price ends up lower than the insurance leg of a BPS, do you have to notify the broker that you want to use the bought put or does it happen automatically? In other words, is the spread max risk cost something that is automated or do you have to manually contact the broker to use it? Let me know if that doesn’t make sense.

Thanks again!

I am with IB, but not in an IRA. Keep in mind you cannot go negative balance on an IRA. So the low margin rates dont make any difference.

Other than that, for regular accounts IB is a bit stingy with lending against TSLA relative to other brokers, though their margin rates are low. While I use margin, the amount IB gives is good enough for me. They can also close your positions against you without a ton of notice unlike other brokers. (Hello SEC! Those were the dark days).

On the last question, most brokers auto execute ITM options. So the spread will be closed out at max loss. But shenanigans can occur when price is close to any of the strikes. So better safe than sorry.

Ideally these should be discussed elsewhere and not in this thread. If you search there might be a thread for brokerages discussion from a while back.

 

[ammulder]

Rookie question: When using spreads, essentially selling and buying an option with the same expiration date (but a different strike) I would expect the theta value to be equal for both options.

So, being long and short the same time value would mean that time does not impact spreads, right?

But, if that is the case though, why do spreads with expirations further into the future have a higher value (for the same strikes)?

For example:
- a 700/600 BPS for 15 Oct nets $337 of credit.
- for 22 Oct this is already $920 of credit.

Given the 3 dimensions of options pricing (delta, theta, volatility)
- I expect delta should be the same for these spreads
- I expect IV should be the same too
- ... so does theta impact BPS after all?

Which one of my assumptions is wrong?

Logically, there must be some effect of time, since a 600/700 put spread for today is virtually guaranteed to expire worthless, but there's still some chance a major event next week could send a 600/700 put spread into the money by next Friday, and the farther out you go in time, the greater the chance that some turn of events between now and then could send it into the money.

 

[InTheShadows]

My 2 cents- title should have “selling options” because the focus here has been generating income via selling options. There were several other threads regarding trading options which fell off the front page as the discussions were all over the place.

Also, how does a private forum work? Is it controlled membership or just anonymity?

What about “selling time value with options.” Or do we want to keep the name more technical so as to only attract people with at least a basic concept of options. Like
How to sell theta to yolo suckers.
How to become a retail MM.

I was first attracted to this thread because I knew what the wheel was, and although I personally don’t like wheeling. I knew half of what I liked doing would be in here, selling puts. Which has since turned into BPS and turning those into IC when I am not concerned about a big rally.

 

[Knightshade]

Title idea: The house always wins. Be the House.

BTW is there a name for that weird state when you sell a spread and somehow both sides of it are green?

STO some put spreads for 10/15 this morning, +635/-735 for $7 net credit per share and just noticed they're up 12.9% and 4.11% respectively right now (SP about same as when I sold this morning)

 

[stealthyc]

BTW is there a name for that weird state when you sell a spread and somehow both sides of it are green?

#winning