Wiki Selling TSLA Options - Be the House

[JustMe]

Hi folks,

I did some intense day-trading of TSLA options today to deal with some sub-$900 strike CCs I’m carrying. A lot more work to do but I made some progress

This week’s adventure shows that what we’re doing is anything but “passive income”

Cheers

 

[ReddyLeaf]

Ok, I rolled those 150,000 pesky naked -p750s to next week for $3.30 credit. You’re welcome, now tomorrow we should all be able to visualize the OI MaxPain graph easier. /s

 

[mickificki]

Hi folks,

I did some intense day-trading of TSLA options today to deal with some sub-$900 strike CCs I’m carrying. A lot more work to do but I made some progress

This week’s adventure shows that what we’re doing is anything but “passive income”

Cheers

no pressure but care to share what you did to deal with the sub-$900 CC's? Thanks.

 

[corduroy]

Maybe I need to start watching the option flow and being careful around good or bad news. Good video, he thinks we will drop to around $1000 on Friday and possibly trend up on Monday.

Fascinating analysis! I wish we could recruit that guy to join our forum for daily updates.

Edit: found this on his twitter feed, now I understand gamma squeezes:

 

[MikeC]

Fascinating analysis! I wish we could recruit that guy to join our forum for daily updates.

Edit: found this on his twitter feed, now I understand gamma squeezes:

View attachment 726456

It makes sense, but I feel like there's some chicken and egg stuff going on.

Is it that bought calls lead to market makers hedging and stock price goes up? Or is it that when the stock price shoots up, more people buy calls and *ahem* more people panic buy/roll their sold calls?

If it was a real "squeeze", shouldn't the share price have come most of the way back down? I know it dropped 90 points from the high, but we're still well over 100 points higher than we started on Monday morning.

 

[JustMe]

no pressure but care to share what you did to deal with the sub-$900 CC's? Thanks.

Three things - bought back the sold options on a couple of dips and sold new CCs for the same expiration at $5-10 higher strikes for about the same premium. This was cost neutral but the calls are at higher strikes now. Risk here is the stock price never recovered

I sold all our other positions and went all-in on TSLA on Monday morning at around $950/share. This added 200 shares. Today I sold and re-bought 11/5 $1100 strike covered calls against these shares twice making $6/share. This was relatively low risk, I think. Used the proceeds to move the ITM CCs to higher strikes

I bought and sold $1050 TSLA puts several times, surfing the waves. Used the proceeds to move CCs to a higher strike. This was definitely risky, but I was successful each time

 

[scubastevo80]

I ended up executing an Iron Condor today for 10/29 expiry to collect $100 premium with a max loss of about $9600. The strikes on both sides were ~$250 away ($775/$875 and $1250/$1350). Figured I would dip my toe in. To those who said start small and well out of the money - great advice. I'll consider tightening the strikes as some point, but for now, I'm happy to take baby steps a week at a time.

For those of you that trade weeklies, do you let the options expire on Friday and then open a new position on Monday, or are you closing and opening at any given time simultaneously. Any advice?

 

[deerfield]

Hi folks,

I did some intense day-trading of TSLA options today to deal with some sub-$900 strike CCs I’m carrying. A lot more work to do but I made some progress

This week’s adventure shows that what we’re doing is anything but “passive income”

Cheers

How are folks dealing with CCs other than rolling or taking the loss?

 

[InTheShadows]

I just need to figure out how I can put a stop loss order in for a spread in Fidelity. It seems like I can only do it for individual legs in the spread, which doesn't work very well since the two legs move differently.

I don't think this is possible. I only see Net credit, Net debit, and even for spread closing options. In advanced account features I don't see an option either. I only have Fidelity IRA's so if your outside of an ira you might have this. In TD Ameritrade I have an agreement for "Contingents (Trade Triggers™)" that allowed me to do that. I don't have that option in our roths at Etrade either.

 

[FlamingPIG]

Im new to selling option, so forgive my ignorance.
Been thinking about ways to take advantage of IV

IV play - Sell both put and call at the money and same expiry
Nov 5 $1,040 put 40.00 call 38.00

Stock Loss break even point at $962
Stock Gain break even point at $1,118

What if stock 1,100? - 1040 = 60 - 38 = (22) call lost + 40 put sold gain = 18.00 gain
What if stock 1,000? Put price sold cancel out - gain sold call 38 = 38.00 gain
What if stock flat 1040 78.00 gain

 

[Yoona]

any opinions on 10/29 1040 short straddle? credit starts at 37 then tapers off; breakeven 1003/1077

2 DTE and theta (+) and vega (-) = good, no? open it Thurs morning then close it Fri morning.

TIA!

 

[Ogre]

any opinions on 10/29 1040 short straddle? credit starts at 37 then tapers off; breakeven 1003/1077

2 DTE and theta (+) and vega (-) = good, no? open it Thurs morning then close it Fri morning.

View attachment 726479

TIA!

Pretty sure that’s called the Cybertruck straddle now.

 

[bkp_duke]

I ended up executing an Iron Condor today for 10/29 expiry to collect $100 premium with a max loss of about $9600. The strikes on both sides were ~$250 away ($775/$875 and $1250/$1350). Figured I would dip my toe in. To those who said start small and well out of the money - great advice. I'll consider tightening the strikes as some point, but for now, I'm happy to take baby steps a week at a time.

For those of you that trade weeklies, do you let the options expire on Friday and then open a new position on Monday, or are you closing and opening at any given time simultaneously. Any advice?

The "not advice" here is generally this, if you are aiming for an Iron Condor:

1) Open the BPS wing of the condor on a down-trend during the day, that will net you a little more premium on that wing
2) Open the BCS wing of the condor on an up-trend during the day, that will also net you a little more premium on the opposite wing
3) Many here close the wings separately, just like they opened them separately. Opposite of the above, in order to maximize profit.
4) Vast majority here close their IC/BPS/BCS on or before Friday and do not let them go to expiration. Main reason is they are already looking at the next week for positions to enter favorably (see 1 and 2 above), and get a little extra Theta by not waiting till Monday. There is some difference of opinion on this, as some people want to wait till Monday (or even Tuesday) and see what the general trend is for the stock and what max pain would be before entering into a position.

I think for a first Iron Condor to learn the ropes, you really picked well. Good luck.

 

[bkp_duke]

any opinions on 10/29 1040 short straddle? credit starts at 37 then tapers off; breakeven 1003/1077

2 DTE and theta (+) and vega (-) = good, no? open it Thurs morning then close it Fri morning.

View attachment 726479

TIA!

Intriguing. What is the margin backing for something like this?

I just closed my BPS right before market close, and might give this a try tomorrow.

 

[Drezil]

Intriguing. What is the margin backing for something like this?

I just closed my BPS right before market close, and might give this a try tomorrow.

Backing for this is usually high.
You can lower it massively when you turn it into an ironfly. Just buy a very otm call & put with it.

 

[bkp_duke]

any opinions on 10/29 1040 short straddle? credit starts at 37 then tapers off; breakeven 1003/1077

2 DTE and theta (+) and vega (-) = good, no? open it Thurs morning then close it Fri morning.

View attachment 726479

TIA!

Options profit calculator shows the odds on this trade at 57.1%. That's pretty risky for my tastes (I'm aiming for 95% or higher usually), but the profits are bonkers good too.

After hours, we are back up to 1062, FYI.

 

[adiggs]

For those of you that trade weeklies, do you let the options expire on Friday and then open a new position on Monday, or are you closing and opening at any given time simultaneously. Any advice?

I pretty much always close my positions actively, and never let stuff go to expiration. Even when its really far OTM AND I know that I'm waiting for Monday to open a new position.

The starting point for this pattern is that options can be exercised, depending on the broker, up to an hour and a half after close of trading. Reason for somebody doing this - maybe they see a big move after hours, or there is big news right after close of trading, and suddenly that OTM option is a great price to buy/sell the shares at. So exercise to get/give the shares at that desirable price. We've had posts in the thread from people that had this happen to them; that was good enough experience for me to take that to heart (learning from other's experience - golden).

I don't ever want to wake up over the weekend and discover that a batch of options that I thought done and buried, aren't.

And its cheap - I might close at .10 to .50 (usually a 90%+ gain) to keep the cost small, with a bias towards .10 for the situation where I'm waiting for Monday to start anew. Part of my thought process - if I opened a position at $5 and now its worth $0.50, then there just isn't much value left to earn. If I've earned $20k out of $22k ($2k left to go), how badly do I want to stress over that last little bit? My answer tends to be "not at all" . Especially when it might consume as much or more energy to get that last $2k than the first $20k.


Actually - I did let an OTM position go to expiration once as a learning exercise - I wanted to see what my account would look like over the weekend and who knows what else I would learn. I got to see it - nothing all that shocking - and now I prefer paying the pennies to eliminate any late assignment risk, and I sleep better at night

I also tend to open on Thursday/Friday for next week, and that also pushes me into early closes.

 

[adiggs]

Options profit calculator shows the odds on this trade at 57.1%. That's pretty risky for my tastes (I'm aiming for 95% or higher usually), but the profits are bonkers good too.

After hours, we are back up to 1062, FYI.

That's good info as well.

My immediate reaction is that I might need to try out a few of these. I like the ironfly idea as well to keep the margin / risk defined. If one had a strong opinion about the closing price for next week, then the straddle could be positioned at that strike. I invariably start turning the straddle into a narrow strangle. Like $10 or $20 OTM on each side. And then the trade starts turning into something different.

Still....

 

[Yoona]

Intriguing. What is the margin backing for something like this?

I just closed my BPS right before market close, and might give this a try tomorrow.

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[MrMoo]

Just thought I would touch base with all my fellow option sellers. Has anyone else has a pretty rough week in terms of contract rolling? I probably should of just bought everything back when we broke 1000 but my stubbornness told me to roll instead since usually in these situations it is time to be selling calls not buying. As a result of my rolling I ended up paying a pretty heavy cost to roll my strikes up without moving my expirations further out.

Just wanted to see if anyone else is in the same boat and what your plays are?

I sold a few far OTM Puts which helped soften the blow, but I'm still down about 4% of my entire portfolio rolling options lol. Will probably take me months to get that back selling options.