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Wiki Selling TSLA Options - Be the House
- Thread starter adiggs
- Start date
All right, I've exceeded half my weekly income goal by opportunistically rolling, and splitting 3x$150 put spreads into 5x$100 at a lower strike with slightly more margin consumed. That's pretty good for a week where mostly all my put spreads have been partly or fully ITM. On paper it's been a loss equalling the two weeks of amazing gains before The Tweet, but my cash balance is happy. Just need the stock price to recover to, well, $1100 would be nice, in the not terribly distant future. 
But I'd be more than OK with this week's kind of action if it takes a while to get there. That one Tuesday felt like the hammer had fallen, so I'm really pleased carrying on with modest income instead of terrible losses. (Even if it still looks bad on paper.)
But I'd be more than OK with this week's kind of action if it takes a while to get there. That one Tuesday felt like the hammer had fallen, so I'm really pleased carrying on with modest income instead of terrible losses. (Even if it still looks bad on paper.)
How are those going? Have you cleared out some of those options? It sort of sounds like you have (grats!) and that's a good thing.
I know it takes some effort - if you'd be willing to share some of the specific trades that you've used to make progress I think that many would find that interesting (I leave out position sizes, or maybe talk %s; it's the specific options and spreads - the ones that got into trouble, and then the positions that are getting you out that is interesting, at least to me).
I opened a small "safe" RIVN-Gamble position. Jan '24 160/200 Bear Call Spread.
Only 3k in it, but margin-requirements were 1.5k .. so .. 200% ROIM
Otherwise im kind of knocked out physically, as the covid-shot made me tired, slow & sleepy the last days. But better than getting taken out completely
As i don't want to babysit things & most positions are under water i just rolled everything out for the SP to go back to 1200
Most things are now 1100/900 BPS for nov 26, dec 17. Only exception was a "i dare you BPS" i opened @1250 or so (turned it into a spread so margin does not kill me) & now it is 1250/900 for dec 3. Was nov 19 1250/900 earliier today & i rolled for a small debit (~5$) as i feared we go down after the rise soon after open.
Turned all my long-calls into 1210/x BullCS (lcc) for this friday. If we hit 1200 then i will close them & be very happy with the results (because that will make all my BPS ITM) & restore everything lost on paper since ATH. I thought about doing BearCS accompanying my BPS, but that increased my margin somehow & i feel better with the lcc.
All in all i managed the downtrend from ATH pretty awful. Entire portfolio crashed ~40% in value (on paper) & that hurt morally. Even though i rolled early & closed some positions aggressively, rolled my LEAPS up (to reduce delta-exposure) i will be happy if i can break even if we hit 1200 again.
But as always i am too bullish ..
Yeah, of course. I have made all sorts of evasive maneuvers so I have lost track of all of the specifics, but I was essentially caught pantsdown with a bunch of cc's around $900 when the stock decided to take off. I always used to roll up and out to get out of this situation previously which ultimately worked but took a very long time. This time I tried a couple of different strategies thanks to ideas shared in this incredible thread that I think have expedited the exit of some of these. In my IRA I am a bit hamstrung so I'm doing a split roll - Sending one contract at a time off to get help. Specifically rolling say 4 contracts to the next week or a couple weeks out at the same strike and using the credit to roll 1 contract to a higher strike. And repeat. This will still take some time but I think it will be quicker than just rolling all up and out.
In my normal brokerage account I have been doing flip/splits - I flipped a couple of ITM cc's to ITM puts, some of them 1 for 1 and some 2 puts to 1 call for example to get closer to the money. Even with the dip in SP I think these have helped to speed things up. With the 1 to 2 split flip each contract is also worth less so its easier to BTC in chunks also. The effect has been to break down these expensive ITM cc's into several smaller put chunks that are closer to the money. I also feel better about having the SP in the intermediate/long term going towards ITM puts rather than away from ITM cc's. I have been using the proceeds from BPS to close any positions out when they get small enough. I have about half of my cc's back, and can now use them to help rescue others also.
I do think I will get out of my jam quicker but i'm also just very grateful to have these tools at my disposal in the future.
I am thinking of trying something slightly different - not really in 'being the house' category but might work in the current circumstances. I think the volatility and SP drops are very much due to EM selling related events - even though the actual quantities of shares he is selling seem to be quite small per day compared to volume.
A few folks here have started selling BCS or CCs - my worry is once it is known Elon is done with his selling, the stock suddenly spikes hard again putting us in the same situation as a few weeks back when it spiked over 20%. BCSs over 20% away from current SP with short leg above 1300 are not giving much in terms of premium - not worth the risk to me.
So, I am thinking of doing some debit call spreads. My rationale being that the current pressure holding down the stock is limited duration and after Elon is done selling, we will see an increase.
These are the specific ones I was looking at
Dec 17 expiration -c1250/+c1200 for a debit of ~7.8. Max loss per option 780. Max profit per option 4217
Feb 18 expiration -c1250/+c1200 for a debit of ~13.5 Max loss per option 1350. Max profit per option 3700
The plan would be to exit the positions at 50% of max profit.
What do folks here think? Any reason this is worse than BPS for the current market?
A few folks here have started selling BCS or CCs - my worry is once it is known Elon is done with his selling, the stock suddenly spikes hard again putting us in the same situation as a few weeks back when it spiked over 20%. BCSs over 20% away from current SP with short leg above 1300 are not giving much in terms of premium - not worth the risk to me.
So, I am thinking of doing some debit call spreads. My rationale being that the current pressure holding down the stock is limited duration and after Elon is done selling, we will see an increase.
These are the specific ones I was looking at
Dec 17 expiration -c1250/+c1200 for a debit of ~7.8. Max loss per option 780. Max profit per option 4217
Feb 18 expiration -c1250/+c1200 for a debit of ~13.5 Max loss per option 1350. Max profit per option 3700
The plan would be to exit the positions at 50% of max profit.
What do folks here think? Any reason this is worse than BPS for the current market?
I had 11/19 BPS 1130/1090 that I closed today for a loss. I was about to throw a few thousand more at it to roll to 11/26 but I had to take the "sure" 1050 jump up today vs. potential down days from another dramatic weekend. A part of me wanted to close 1/3 out and roll 2/3 out to give myself a chance. But when I saw the stock dip from 1050 to 1039 midday, I figured I'd take what I could get. After staring at 980s yesterday and holding out for a jump up, I figured my wishes were answered and I should close it.
I still have 11/26 ITM BPS that I hope make it through. In terms of near-term catalysts, I feel like 11/26 is riding so close to Elon concluding his sale, Berlin getting approvals, etc. that I'd be looking for the next jump up to roll up to December.
I still have 11/26 ITM BPS that I hope make it through. In terms of near-term catalysts, I feel like 11/26 is riding so close to Elon concluding his sale, Berlin getting approvals, etc. that I'd be looking for the next jump up to roll up to December.
scubastevo80
Member
I ended up closing my remaining (2) BPS 11/19 today on the bounce and writing two BCSs for 11/26. Both BPS were up over 90%, but to be transparent, these were rolls from last weeks scare, so over the two week period, I'm net positive but not as much. If I factor in the 11/12 and 11/19 BCS that were both closed, I'm happy with the results and learning experience.
Since you're asking...., I don't like it. You're gambling that we hit 1200 in mid-December. Might not happen. Much more likely we don't significantly breach 800 or 850, so I like taking the sure bet of BPS 850/650 or 800/600 each week for the next 4 weeks. But you and I have very different styles. You like to get much closer to the SP than I do, and at least for the last few weeks, my strategy seems to have worked better as I am making money each week, and you are rolling/trying to survive. But you probably did better June-October by being more aggressive.
Honestly, I don’t know why roll down puts.
I think it makes more sense to roll them up.
At least a manageable number.
I was out of margin, so I sold only 1 yesterday - 1050 strike for 11/26, premium $80.
Today sold 1 more 1100 strike for 11/26 @ $71.
With a bit more margin from appreciated SP. I can start closing bps soon for this week, so the risk of running out of margin is lower.
If SP gaps up, you capture this move with your ITM put. Maybe it becomes worthless, maybe you close it for the fraction of your premium. Worst case you roll a few times.
This is like buying calls in anticipation of SP going up, except it costs you nothing.
You use other people’s money to benefit from the move.
How did you only use 1.5k margin? To get close to 3k premium (using last pricing), you'd need 3 contracts for a 2925 premium. 3x100x400=12K margin. That's selling 3x160 C, buying 3x200 C, Jan '24I opened a small "safe" RIVN-Gamble position. Jan '24 160/200 Bear Call Spread.
Only 3k in it, but margin-requirements were 1.5k .. so .. 200% ROIM
Was it yesterday or today in the main thread where someone said it wasn’t very nice of Elon to tank the stock with this series of tweets and they had a friend who needed to sell some shares to buy a house and was going to have to sell 15-20% more shares because of this… and was greeted with what?
- Real investors don’t sell, therefore you and your friend aren’t real investors
- only an idiot would put themself in a position where they need to sell
- only an idiot wouldn’t have identified and sold at the top if they needed to sell
- only a jerk would whine about this when the stock price is still up from May
- if you don’t like what Elon tweets you are no good and should sell all your TSLA stock
- …
If I went and said “man it sucks that my put spreads are ITM” I’m pretty confident that I’d get “you’re not a TSLA investor because you don’t HODL only” and “it’s been proven by X, Y, and Z that anybody who sells options loses all their money” and “you may think you’re doing well but it’s only a matter of time before you lose the rest” and “nobody listen to this guy and his terrible ideas but just HODL” and so on.
I don’t necessarily agree that they *wish* to see option traders lose, but there’s certainly no love for options trading, and seemingly not even acceptance really, outside of those who are on this thread also.
oh that's juicy... it didn't happen if you don't link it!
I think of the main thread now as a news, social chat, and cheerleading thread.
This one is more like the original Short Term Price Movements that the main thread used to be.
Thank you @ammulder for your defense attorney efforts.
@winfield100 when I meant some, I didn't mean ALL. When I meant some, there was enough, and by some - there was too many with that kind of sentiment.
I don't even let my wife tell me what to do with my options, so boomers who don't have to work as hard as we do as active traders can GTFO. By boomers, I mean your mindset, not your age.
I came here about 6 months ago with the goal of creating cash for RMD at retirement without selling core TSLA. I started with CC and upon assignment and playing the put side of the wheel found much better premiums for a bullish stock. After converting 20% TSLA to cash with assigned CC, I ceased CC and concentrated on CCP.
But... BSP is much better. As @buttershrimp has declared, it is my spirit animal.
There's many good reasons to do so.
1.) You overshot your strike, already ITM and you want to pick a new target that takes you OTM, exchanging more time for net credit.
2.) You want to reduce your margin/debt load/risk requirements. 100 points per contract over many contracts is substantial.
3.) Catalyst event appears jacking up volatility. You can make the same premium for lower strikes selling into the event.
4.) Catalyst event appears that pushes you ITM, going OTM will slow your rate of loss. (happened to my friend during this Twitter "Poll")
5.) Combination strategies with short strangles. Not knowing how an event will play out, roll down premium loss is compensated with premium gain from short calls.
If rolling ATM was always beneficial, why don't we go the other way and just sell ITM. The arguments apply just the same.
There is a strategy around this called a Guts Strangle.ATM is generally preferred, but situations like the five examples above makes rolling down the better play.
Ibkr uses less margin for such long timeframes. Margin requirements will increase over time
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