This premium stuff has really reduced the stress watching the stock. I am no longer stressed, angry and upset about the stock not following macros on green days, or FUD in the media tanking the stock. Slow and steady wins the race!
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Wiki Selling TSLA Options - Be the House
- Thread starter adiggs
- Start date
TheTalkingMule
Distributed Energy Enthusiast
Keeping in mind that up til now we've never shown a massive pile of actual earnings, a clear picture of more to follow, and a PE ratio lower than annual growth. We need to think of classifying 3Q and 4Q and something more substantial than the traditional "good news" that CNBC and others are open to interpret as something else.
Keeping in mind this is exactly the kind of rational predictable run that Wall Street like to avoid. Rock you to sleep with a steady climb or slow burn, then.......BOOM......a rocket or plummet. I think we're more likely than not going to boom or bust between today and 4Q earnings. Watching all these CCs get written worries me!
SERIOUSLY NOT-ADVICE
When I had my SMA call, I read in the Fidelity term definition that you have 5 days to meet the call. I covered it the next day but in retrospect I would like to have waited an extra day. There are rules around meeting the call; and then your broker has incremental ability to just say "*f... it; gimme your money" and resolve it. My own plan is that as long as the house margin is pretty generously above the SMA call, I'll use more of those 5 days. That'll get me closer to that cash:BPS ratio that maximum loss would suggest. And I also wouldn't push the max loss.
I.e. - I'll rely on Fidelity's good sense that the position is really safe - it's just an artifact of the calculation trouble might be brewing in that account, and not make use of their power to liquidate if they feel like it.
My thinking (but I've got the good stuff from the ER right now) is that the 5 days Fidelity had in their definition and the 4 days you mention here are compatible. The extra day for the option / deposit to clear.
I doubt I'd leave an SMA margin call open for all of that time, but I might use more like 2 or 3 next time (and as long as SMA is < House surplus, there will be more next times).
This makes a lot of sense to me. *gets pen and paper* *scribbles notes*
Current interest rate on margin is around 2% annually, but the difference between calls and puts is 4-6% weekly. I wouldn't worry about the margin interest for this.
But as someone else opined, the advantages for puts when done weekly is tighter bid-ask spreads due to higher trading volume, and closing contracts for calls (e.g. $0.65 for TD) costs more than letting puts expire, and there's some assignment risk which causes more work. If the profit per contract is $200 though, the $0.65 doesn't bother me. Lots of considerations.
I wanted to try 600/700 today, but max gain dropped quite a bit today. I'll try modeling this for intervals besides 1 week to see if there's something more lucrative.
I have seen some statistical analysis positing that IV continues to rise into earnings (generally speaking, not Tesla specific) starting from a week to 10 days before that. Apparently, this IV rise tends to fully offset the theta as we get closer to earnings. Fair warning: I believe this analysis was done on monthly expiries, but not weekly, which is the flavor du jour here. While I have not looked at any back test for this, I am in no hurry to close out this weeks spreads, which are actually trading from above where I sold at today's highest price just above 800, and lowest vol.
That said, I did open a small post earnings bps to check on the IV thesis. I see several have already legged into post earnings spreads here. Would be good to see how these evolve rest of this week, into earlier next week.
That said, I did open a small post earnings bps to check on the IV thesis. I see several have already legged into post earnings spreads here. Would be good to see how these evolve rest of this week, into earlier next week.
I would think that retail is loaded up and has no change to spare. Those types that think TSLA is expensive and are waiting for a discount will not be buying on the pop either. Day traders might jump in.
If we get any volume, it should be from institutions. Those benchmarked to S&P underweight TSLA PMs that Gary Black talks about.
That is the problem I have if I sit at home on the computer. I'm trying to trade once a week, and enjoy the money the other days. But there is a sick part of me that feels the need to look at it constantly and find more trades. Maybe we need to start a support group....
This is with BPS's? I do similar with just puts and watching levels of resistance and max-pain put walls. I used to buy calls, but was burned twice and the puts saved me (aka, hide behind a big put wall...+10% buffer)
not being greedy is one key to success
although i am up 22 out of the last 24 weeks, the last 5 is when i was less reckless with margin (ie results became somewhat predictable and consistent)
this is the very first screenshot i took from the optionsalpha video when i first started and it's still on my office wall:
optionalpha.com
although i am up 22 out of the last 24 weeks, the last 5 is when i was less reckless with margin (ie results became somewhat predictable and consistent)
this is the very first screenshot i took from the optionsalpha video when i first started and it's still on my office wall:
Generate Consistent Income Trading Options | Option Alpha
Learn how to generate consistent income trading options with Option Alpha's guided video lesson.
optionalpha.com
InTheShadows
Active Member
I sold some LCC and CC 835’s today for this week. I bought them back for a loss an hour or so later when the share price started to head for 800 again. I just don’t have the stomach for short calls right now. 30 mins prior I tried to create an IC too and it was rejected. (Still not sure why, it matched my put spread exactly). I’m glad it didn’t go through.
All my put spreads closed near open at 50% gain. I was pissed. I was driving when they triggered and realized I was so busy this am I forgot to move them to 80% orders before I left for work.
I reopened most of them, all with the short legs at 745 (one at 735) which was a bit under 1 std deviation when I opened them. They are pretty much flat for the day right now.
All my put spreads closed near open at 50% gain. I was pissed. I was driving when they triggered and realized I was so busy this am I forgot to move them to 80% orders before I left for work.
I reopened most of them, all with the short legs at 745 (one at 735) which was a bit under 1 std deviation when I opened them. They are pretty much flat for the day right now.
I am surprised to see the number of posts today saying that they already closed positions for this week and opened for next week which is post IR. Wouldn’t it be better to wait until later to open new positions as you would expect IV to be higher closer to IR. For those who already had 80% profit on the positions this week, I can understand. But many others are already rolling out to 10/22 and it is just Monday! What am I missing here?
My positions for this week are only about 30-40% in profit, normally I would wait till about 75% to close. So no changes today.
My positions for this week are only about 30-40% in profit, normally I would wait till about 75% to close. So no changes today.
In my case, I closed the BPS that I opened on Friday for 80% gain today. Looking at premiums, next week looked better for me, compared to this week. This was in the morning, and may have changed during the day.
InTheShadows
Active Member
I closed mine at 70+% - if the SP keeps going up into next week, even if IV goes up, I’m thinking the price of the 10/22 puts won’t necessarily get better. So I’d rather sell 700s earlier than 750s later. I sold half my alotted number of contracts to see which way turns out better.
Playing around with cheddarflow, and wow, I knew TSLA had an active options market, but I had no idea to what extent compared to other companies. If I'm reading the data right, we were the top options market by a factor of 2 last week:
What makes me think I'm reading this wrong is that I don't see the SPY, QQQs, etc. on this. So I guess it's just individual stocks that we're ruling. Also, not sure if this is unusually high or not due to earnings.
What makes me think I'm reading this wrong is that I don't see the SPY, QQQs, etc. on this. So I guess it's just individual stocks that we're ruling. Also, not sure if this is unusually high or not due to earnings.
It seems to me some who close early in the week also open them earlier than Friday, i.e. positions might be sitting closer to a week and gained more than positions opened on Friday.
I'm wondering if someone made an observation that positions opened for 2 weeks ahead and closed 1 week later consistently earn more than weekly positions? Probably give you more leeway as to when to close them, can wait out some bad days? On the other hand the premium for 2 weeks should be less than 1 week ×2. But maybe if you close a week early you can get 60% of premium? I've thought about this, but have not yet tried to track the numbers.
The problem is with me having multiple accounts across which I bought/sold TSLA around the same time.
Tax discussion, strategies and questions
Job ending after 22 years do to Covid next month. Getting a severance package and paid for unused vacation time that could extend after the 39 week unemployment ends out to maybe almost another year. Already have 96 shares of TSLA at 400% gain. Its outperforming my 401k by miles. Completely...teslamotorsclub.com
Your brokerage should just calculate wash sales automatically. You should be able to export your trades to an Excel file from your brokerage website. My CPA just writes "Various" for my trades and then just uses the overall gain/loss numbers.
This affects Wash sale calculations.
Do you guys have any safeguards in place in case something happens, and you can't trade/adjust/roll?
I was thinking about this lately.. What if you get hit by a car, wake up in a hospital, same time TSLA crashes and you find out you have a bunch of positions liquidated because you couldn't react in time, well that would not be very nice.. it's a small risk, but non-zero one.
I try to keep my short positions OTM in any case, but I do tend to use 80-90% of my available margin backing. Lately it's all been bull put spreads. Might be a good idea to set a GTC close order at around halfpoint of the spread, just in case.. opinions?
I was thinking about this lately.. What if you get hit by a car, wake up in a hospital, same time TSLA crashes and you find out you have a bunch of positions liquidated because you couldn't react in time, well that would not be very nice.. it's a small risk, but non-zero one.
I try to keep my short positions OTM in any case, but I do tend to use 80-90% of my available margin backing. Lately it's all been bull put spreads. Might be a good idea to set a GTC close order at around halfpoint of the spread, just in case.. opinions?
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