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Definitely not advice because I'm just winging it most of the time but I roll into strength. I buy LEAPs with a Delta of 0.80 and roll when they hit >0.90. I take some profit and deleverage a bit when the stock goes up. I'm curious what others do so I can learn.I’ve been wanting to roll some of my DITM LEAPS in my non taxable accounts up, is it better to do this into weakness or strength?
No, but it could be an early warning sign. Years ago I had deep ITM naked PUTs out 1-2 years. Some got assigned. And then shortly after they all did....A little semi-OT option mechanics experience I wanted to share. I was trying an experimental arbitrage position in another stock and got early assignment on one of the DITM legs. No real effect to the position I think (I'll just reset it on Monday), but it did answer a long-standing question I had about early assignment. I had 40 contracts open and only 15 were early assigned. I don't know if it's already common knowledge for most here, but I found it good to confirm that early assignment doesn't necessarily affect your whole position in a particular contract.
Ouch that sounds like an uncomfortable situation. How bad was it and how did you recover, may I ask?No, but it could be an early warning sign. Years ago I had deep ITM naked PUTs out 1-2 years. Some got assigned. And then shortly after they all did....
(I don't remember any more details).
It was ugly. Worst margin call I ever got. Summer 2019. Account value had gone from a couple million down to less than $700k. I had to borrow $100k from my father to avoid selling my shares. Learned a Valuable lesson about Margin, and that the SP can go down much more than you think possible based on what we think are a lot of promising future catalysts. I almost threw in the towel. TMC kept me in it. I kept all my shares, so I recovered nicely....Ouch that sounds like an uncomfortable situation. How bad was it and how did you recover, may I ask?
Glad you have recovered. Exactly the situation I'm trying to avoid, while still selling enough puts weekly to keep income flowing / account growing...It was ugly. Worst margin call I ever got. Summer 2019. Account value had gone from a couple million down to less than $700k. I had to borrow $100k from my father to avoid selling my shares. Learned a Valuable lesson about Margin, and that the SP can go down much more than you think possible based on what we think are a lot of promising future catalysts. I almost threw in the towel. TMC kept me in it. I kept all my shares, so I recovered nicely....
Yea I have been trying to figure when to roll. Mine are at delta 94 now and I like being around 80 for entry as well. Delta says roll up into strength but if I’m understanding the other Greeks, I was thinking maybe rolling up into weakness would be better because the higher strike would have a higher gamma during a drop.Definitely not advice because I'm just winging it most of the time but I roll into strength. I buy LEAPs with a Delta of 0.80 and roll when they hit >0.90. I take some profit and deleverage a bit when the stock goes up. I'm curious what others do so I can learn.
Just like Lycanthrope, I also only consider gain or loss when I close the position. I have been using the Numbers on my mac as my spreadsheet software - with data organize, sort and categories as a way to calculate gains/losses. Usually can get the weeks calculations done in about 10-15 minutes. Used Excel earlier - with pivot tables as a way of calculating, but now finding Numbers so much easier.For @Lycanthrope and anyone else who tracks trades with spreadsheets:
How do you organize your trades into weeks to calculate your weekly profit/loss? Based on the day you opened the trade, the day you closed the trade, the expiration date of the option/spread, or something else?
Most of my trades are opened on one week and closed on another, but some of them are closed early on the same week they were opened, which might not be the week they expire, so no matter what I do it seems like there are some exceptions. I think I don't want to be in a position where I have to go back and change the total for a prior week, so I'm thinking the best way might be to group into weeks based on the day I close a trade, even if I got the income for opening those trades on a prior week, except then longer-dated options just hang out in the "future" bucket for a while (and if I sold them and got paid up front, I may have a lot of cash that's not yet reflected in the weekly totals).
Or do you just track the cash in/out instead of making the individual trades the thing? That seems weird because you get the cash up front for selling options, but you don't know at that time how much of it you'll get to keep (or how, much more you might lose, worst case).
How is this normally done?
Lol, yup, institutional buyers have been driving this stock up. Friday's sideways was a show of strength. A few weeks ago, Institutions out-bought retail by almost 10-1. Tonight, I'm seeing price analyst upgrades from Wedbush to $1800, Jefferies to $1400, and who knows what else will come. I just went from "Dear Grandpa, please help me." to Raging Bull. My forecast for Monday just went from -7% drop to +5%. Glad today wasn't a trading day. My emotions would've let me get swindled in an instant.The only thing that's gonna affect TSLA this week is institutional buying and selling. Any scared retail people selling a hundreds or thousands of shares isn't gonna overwhelm the dynamic of so many funds having a dramatic TSLA imbalance.
I keep pointing to the Thursday/Friday chart to illustrate how hard it was for MM's to even keep this thing around 1200. Why should that subside? I guess funds could keep gambling that TSLA won't roll higher and leave them in the dust.
I'll LMAO if we pop 5% tomorrow. Could easily see the normal +3% on covering of the MM shorting Thurs/Fri. More likely they push us down immediately and sharply Monday to trigger as much selling action as possible, then equally massive rebound to neutral. That sounds profitable for the house.
The biggest things I've learned is how to use the Margin Calculator tool in Fidelity that will let you see how much margin you have if the SP drops to a certain number, to never assume the SP can't drop 50% for almost no reason, and to not be Greedy and keep selling more and more Puts because it's "free money" while assuming the SP can't possibly drop to that level....How do you set your margin excess? Do you have some refined risk management formula or ratio that you use? Thinking I might as well learn from your mistake....
Wish e-trade had a margin calculator that lets you simulate a share price...The biggest things I've learned is how to use the Margin Calculator tool in Fidelity that will let you see how much margin you have if the SP drops to a certain number, to never assume the SP can't drop 50% for almost no reason, and to not be Greedy and keep selling more and more Puts because it's "free money" while assuming the SP can't possibly drop to that level....
Recovering already - now €984 -6.76%First quotes from German markets: 966€ = ~1116$, -8.5%