Wiki Selling TSLA Options - Be the House

[jeewee3000]

Remember our theories about Max Pain? Wait...

 

[Cherry Wine]

$200B increase in market cap in one week. Bonkers.

 

[BornToFly]

I was considering selling some BCS for 1350/1550 before close, but the climb into close was seen by some folks earlier in the week as a sign that we are going to keep climbing, so I decided to wait until next week. I did sell 880/680 and 850/650 PBS.

 

[corduroy]

Is this real life?

 

[Tempus]

closed the last of my 1100 - 1200 BCS that i was hanging on to hoping for a last minute close under 1100. Got it when we dipped down to 1093 earlier this afternoon. Took a few k loss on it, but it could have been MUCH worse. Fully out of the call side for right now. Will see what happens monday to decide whether to dip back into straight covered calls (staying away from the call spreads for now).

 

[Cherry Wine]

I was considering selling some BCS for 1350/1550 before close, but the climb into close was seen by some folks earlier in the week as a sign that we are going to keep climbing, so I decided to wait until next week. I did sell 880/680 and 850/650 PBS.

Yeah, wise decision imho. I'm thinking of waiting for Tuesday before I sell any 11/5 expiries. I also rolled my 11/19 1150s to 12/3 1200s now, figuring we could easily get a gap up at open on Monday that will make it much more expensive to do so.

 

[jeewee3000]

I remember the good old days of us complaining that the stock price never broke $380. We were always talking about whenever we were going to hit the elusive $400 (pre-split!).

Now we made 2.5x that elusive $400 entirely in one week.

I can only hope we'll have similar experiences in 5-10 years. "Oh no, TSLA went up $2.500 (post-split) in one week and my cc's are busted!"

 

[BornToFly]

Correct, but be advised that as the SP drops they will raise that $23k margin requirement on you (sometimes a lot), at the same time that your avaiable margin is dropping. That is why I like the idea of the spreads. Less likely to get a margin call since the margin required doesn't suddenly double on you.

I should add, that now that you have those Puts, go into the Price Adjustment Tool (if your brokerage has one) and put a hypothetical SP drop to 700 into the computer. You will see how much the $23k margin requirement will increase and how much your available margin will decrease (like two high speed trains coming at each other)....

 

[buttershrimp]

So 200 points in a week? This confirms my theory… take my prediction and then add or subtract 200 points.

 

[pz1975]

Anyone thinking about what Friday moves may look like if there was going to be another gamma squeeze Monday? If there is a quick move up in the last 20-30 mins I will probably buy some OTM calls for next week to try and take advantage. One of those good risk:reward situations I always look for when buying short-term calls (which I rarely do).

For covered calls for next week, the lowest I am going is 1,500 at this point. Only $1 but better than nothing.

To follow-up my own question above, the spike into close makes me feel strongly that there will be another big “gamma squeeze” move at open Monday. I bought a *sugar*-ton of OTM calls for next week 10 mins before close that I plan to sell off during the spike Monday if it happens. I sold a bunch of OTM BPS for next week that will more than pay for those calls should I be wrong.

 

[Ogre]

Sold a few naked puts and used the proceeds early in the day to buy December calls 1100/ 1120. They are almost in the money already. Now I guess I gotta wait them out. Fortunately puts expire next week.

Semi-related. If you have a bull put spread, do you usually let it expire or cash it out before it closes?

 

[Oil4AsphaultOnly]

wow, and the SP is still rising after hours!! So GLAD I closed out my BCS (for a VERY TINY profit of ~$0.30 per share!)

 

[bonk3125]

Sold a few naked puts and used the proceeds early in the day to buy December calls 1100/ 1120. They are almost in the money already. Now I guess I gotta wait them out. Fortunately puts expire next week.

Semi-related. If you have a bull put spread, do you usually let it expire or cash it out before it closes?

I never let anything expire. BPS, BCS, puts, calls. Too much uncertainty and shenanigans can happen after close. Better to pay a little and close than wake up Saturday morning in the hole.

 

[jeewee3000]

Sold a few naked puts and used the proceeds early in the day to buy December calls 1100/ 1120. They are almost in the money already. Now I guess I gotta wait them out. Fortunately puts expire next week.

Semi-related. If you have a bull put spread, do you usually let it expire or cash it out before it closes?

Bonk beat me to it, but the general consensus here is that it is always worth it to close out short positions before market close on expiration.

This concept was called "practicing good options hygiene" by @adiggs .

Closing out winners for peanuts buys you 100% peace of mind. If you don't close out the short options and the stock goes bonkers after hours (with TSLA this is more likely than most stocks, IMO) your options could get exercised. And you can't adjust the position anymore so you're completely stuck.

Most of the times nothing will happen of course, but that one time something does come up it will cost you more than all the penny-closes you can ever do.

ADVICE.

 

[adiggs]

Correct, but be advised that as the SP drops they will raise that $23k margin requirement on you (sometimes a lot), at the same time that your avaiable margin is dropping. That is why I like the idea of the spreads. Less likely to get a margin call since the margin required doesn't suddenly double on you.

At least to start I'm going with mostly BPS in that account. And as big as the position is overall, I had to goose it a bit there at the end to finally consume all of the margin. My account is, I think, backwards from most that are using margin. I have a lot of that account in cash and I've been sizing my positions (until today) based on the cash. So as I think of it, I'm using an itty bit of margin now.

AND I figure I can add in the insurance put later if the increasing margin requirement becomes a problem.

I do appreciate the heads up - actually making use of the margin is new to me.

 

[InTheShadows]

Sold lcc for next week at 1225 in my tax sheltered accounts only. I set a GTC at 50% order for them. They are -42% right now. I. Am ok if these get called away. I will watch the delt on them and if they start to match the leaps I might look at closing them.

I’m afraid to write anything against my shares or leaps in taxable accounts because most of them wouldn’t qualify for long term gains yet if they get called away. And now thanks to this past week they have quite a bit of gains.

Opened some more aggressive put spreads with short leg ranging from 895 to 980. The 980’s have 780 long side. The others are all 100 and 150 wide spreads. And a small account has 1 880/-900.

Easily met my trading goals this week. Unrealized gains are off the charts. (Literally, I had to rescale my yearly charts on my google sheet) Doubled my monthly goal, that was nice as it made up for my two negative months this summer.

I feel kinda stuck with my taxable accounts. I want to set stop losses on my leaps but if they trigger the tax man will come knocking. First world problems I guess.

 

[Bunky]

Welp, decent week on the put side. I have some cc's that are now pretty DITM though. Will do a combination of split rolling and buying to close on dips with proceeds from BPS. If we ever get a dip again

 

[MP3Mike]

Was anyone still holding 10/29 -1120 calls that got executed in AH? (It only got there a few minutes before the cut-off, so I wouldn't think most people would be able to get ahold of someone at their broker to execute them in time...)

 

[BornToFly]

Thanks everyone for the split rolling idea, should my Jan 2024 CCs be well ITM by that point. The idea of saving one call at a time never crossed my mind. The folks here are WAY cooler than the ones in the "other" thread....

 

[corduroy]

Here's a recap of my week.

Like many others, I opened BCSs first thing Monday morning, thinking we would come back down after the huge pre-market pop. When it started to run towards $1,000, my first instinct was to close everything immediately. But looking back on my trading spreadsheet, that is what resulted in the largest loss I have taken in the past. So this time I was going to be patient and use the "do nothing" strategy. I was absolutely convinced we come back to earth by Friday afternoon, so all I needed to do was wait it out until Friday. This was not an ordinary week though.

There were times during the week when I could have rolled the 1050/1150s for free with a strike improvement of 1090/1190, but I still felt they would expire OTM. Stomach acid was high all week, but I kept waiting, everyday watching us go higher. By Friday, 30 minutes to close, I finally had to take what I could get - free rolls for my 1050/1150s to 11/5, which are now $75 ITM. The 1100/1200s I closed for a $4 loss each (net $2) and was lucky to do that because 10 minutes later by the close they were $18. I was really not wanting to carry these positions forward over the weekend. By the looks of things, the remaining 1050/1150s could go to max loss which would be about 2 months trading income. Even though I actually hit my profit target this week, it was only by kicking this can down the road.

The thing is, I don't even know if I should change my trading style. I'm already conservative to the point where I haven't even had to manage a position for 5 months. How many times does a mega cap stock go up 20% in one week? Usually opening a position expiring only 4 days away at 18% OTM is safe, until it wasn't. This really was a "white swan event". It might never happen again with TSLA. Or it might happen again next week.

I still think we have to mean revert to the mid 1,000s at some point, so we'll see how long I can continue to roll these.