Wiki Selling TSLA Options - Be the House

[traxila]

I am the greatest option degenerate of all time.

I sold Puts on some stock I would like to own at certain price, ABNB at $175, SI at 175, APPL at 125. And thinking I was smart I sold covered calls against stock I owned and would be happy to convert to TSLA. So thinking I was a genius I sold 17 Covered calls Monday of AAPL for 155 Strike price. AAPL for the most ridiculous premium you will have ever seen. I was either blind or drunk. The stock was $150, was trading flat and sideways for 5 month. What could go wrong? Well, here what my genius move ended up with. Cashing a ridiculously pathetic $150 premium, the stock skyrocketed like a Satan’s erection to a $158 in one week with the announce of the AAPL autonomous hypothetical car for 2025 or more 20…..

Realizing I had +100,000$ profit in my AAPL over 1 year and getting all my shares called away would cost me $53,000 of taxes for a pathetic $150 premium. I rolled my 155 19/11 to 162,5 3/12 and paid a $170 debit to do so because the 2 market orders filled at different time after I tried for 30 mins trying to get them filled at the same price to do a proper roll with my mobile platform. Then today it rocketed another 3% up and rolled to 165 17/12 and I tried to do so by taking a credit by buying back lower than the contract I was selling. It ended up a clusterf#$&, the new STO order got filled but not the BTC and I was now in the first seat of the ape degenerate holding 17 Covered calls and 17 uncovered calls. The premium kept going up so I ended up buying back my first contract for another $375 debit.

This is the greatest lesson I have learned in my life and it cost me only $525.

Don´t accept ridiculously low pathetic premium.
Don’t sell covered calls after a 6 months sideway trading of a company with billions in revenues.
Don’t do stupid trades.

I have Hertzed myself to share the pain you guys experienced 3 weeks ago.

At least all my TSLA options trades went really well and I made 50x more than I lost however I lost more time managing this stupid retarded degenerate trade that I wish I I had placed drunk on the floor of a tavern.

Hope everybody here doesn’t need to learn anything from that. You can read and laugh at me as much as you want. I deserve to be public shamed.

If you feel better I sold the exact same AAPL options for 0.60. Why? Because I have done it repeatedly for free money over the past few weeks. I am in a retirement account though… my shares got called away one time and I actually bought them back cheaper a few days later, no tax consequences.

Since you are in a taxable account with these I will accept your label as the greatest degenerate, but I am a close second

 

[BornToFly]

Regarding the discussion around rolling multi-leg options. If I am rolling a 700/900 to the next week, I usually do a three legged roll. So I Buy to close the old 900, sell to open the new 900, and buy to open the new 700. I sell to close the old 700 later. Usually that leg is worth so little that I don't want it holding up my trade, or causing a lower credit, and having it open until later doesn't affect my margin.

 

[MXWing]

Don’t do stupid trades.

That's right up there with

Stop them on defense
Score on offense
and you win!

 

[st_lopes]

@Yoona you're going to have to explain to everyone what made you even consider a short straddle. Betting on low volatility on a high volatility stock is some clairvoyant level black magic.

The idea of being caught having to roll 100x naked positions with uncapped loss potential is giving me ulcers too. Especially with all this chatter about splits... one semi-cryptic Elon tweet could easily move the stock past those breakevens. That said, holy moly that's a trade!

 

[TheTalkingMule]

Don’t sell covered calls after a 6 months sideway trading of a company with billions in revenues.
Don’t do stupid trades.

I have Hertzed myself to share the pain you guys experienced 3 weeks ago.

It seems one can roll one's self out of nearly anything. Being new to this that's hard for me to grasp. I'd hate to Hertz myself one week only to be Melvined 2 months and 8 rolls later!

 

[EV forever]

Regarding the discussion around rolling multi-leg options. If I am rolling a 700/900 to the next week, I usually do a three legged roll. So I Buy to close the old 900, sell to open the new 900, and buy to open the new 700. I sell to close the old 700 later. Usually that leg is worth so little that I don't want it holding up my trade, or causing a lower credit, and having it open until later doesn't affect my margin.

The exception being when you are doing a roll out of desperation - like last week Tuesday when I had a bunch of +p960/-p1060 spreads. With the stock price dropping fast and the short let already ITM, the long leg also was significantly high premium. My learning from last week: when doing desperation rolls to try and get out of a bad situation, just do a 4-legged roll at market price or close to market price. Trying to make a few extra bucks entering a slightly higher limit price is not worth it - getting out of the bad position in the most important!

 

[AquaY]

It seems one can roll one's self out of nearly anything. Being new to this that's hard for me to grasp. I'd hate to Hertz myself one week only to be Melvined 2 months and 8 rolls later!

Don't be too cavalier. There are many managing techniques that work if you apply them correctly but the longer you roll the longer it takes to free up your capital.
You also need to have sufficient capital/margin in reserve to repair trades. Otherwise you can get into trouble.
There are members here that can attest to that

 

[BornToFly]

The exception being when you are doing a roll out of desperation - like last week Tuesday when I had a bunch of +p960/-p1060 spreads. With the stock price dropping fast and the short let already ITM, the long leg also was significantly high premium. My learning from last week: when doing desperation rolls to try and get out of a bad situation, just do a 4-legged roll at market price or close to market price. Trying to make a few extra bucks entering a slightly higher limit price is not worth it - getting out of the bad position in the most important!

Definitely. I was talking about when everything is going to plan and your spread is OTM. If your account is on fire and you're pulling the rip cord, don't worry about pennies.

However, if something ever happens to Elon and the SP tanks, I will close the short leg of my BPS, and short the stock with the long leg. Maybe do a trailing stop on the long leg, so if the SP reverses, there is an automatic sell of the long leg to lock in the gains.

 

[bonk3125]

1100/1150, 1110/1160, and 1105cc. I will be glued to the ticker, watching the battle for 1100 unfold today.

 

[Drezil]

Hands up, who of you sold the 63k 1000p for next week? That is a HUGE wall compared to this week .. even though this week is monthly expiration!

 

[ammulder]

Hands up, who of you sold the 63k 1000p for next week? That is a HUGE wall compared to this week .. even though this week is monthly expiration!

Sorry, I bought p$1000, not sold. Part of the spreads I’m rolling from ten-percent-gate.

Someone mentioned this but it looks like premiums are pretty high for 12/3… it’s early but I’ve put a roll order in for my 11/26 960-1060 put spreads… hopefully will trigger if there’s a decent push below $1100. I’m not so in love with being that close to the money, but if the premium is high enough I’ll hang on to this lot and unload other ones.

 

[tradenewbie]

Planning to open some CC, BPS or BCS for next week, but seems premium was so low (even BPS -900/+700 only have around $1.3), so undecided yet

Next week is thanksgiving week, I assume market would be less fluctuate? Since premium is low next week and 12/3 seems more attractive, would it make sense to open the BCS / BPS for 12/3 first and let the time decay for next week (assuming the market is less fluctuate next week) and close it by end of next week?

Well, maybe safer to do it next Monday instead after seeing how's this weekend goes first.

 

[OrthoSurg]

Sold 26/11 1355CC and 3/12 895 Puts this morning.

Does it make a difference to sell $5 under or $5 above a support or resistance level? Probably not but it might make me sleep better at night. Never have slept so well the last week. Probably because I’m not coughing anymore from my kids bringing back colds from the daycare.

Really happy to see I am not losing sleep over managing the most stupid position on AAPL I could take at the worst time ever. I was BornToTrade. Just kidding. Still learning a lot from you guys. Thanks for sharing all the knowledge and past experience so I can do my own mistakes!

 

[BornToFly]

Planning to open some BPS or BCS for next week, but seems premium was so low (even -900/+700 only have around $1.3), so undecided yet

Next week is thanksgiving week, I assume market would be less fluctuate? Since premium is low next week and 12/3 seems more attractive, would it make sense to open the BCS / BPS for 12/3 first and let the time decay for next week (assuming the market is less fluctuate next week). Well, maybe safer to do it next Monday instead after seeing how this weekend goes first?

That is why I rolled to 12/3 already. But because there is more time between now and expiration than I usually have with my weeklies, I made sure to use a wide $200 spread, and I am using what I think is a safe strike of 700/900. I will not open the BCS for the iron condor until next week because I view that side of the trade as being more risky.

 

[tradenewbie]

That is why I rolled to 12/3 already. But because there is more time between now and expiration than I usually have with my weeklies, I made sure to use a wide $200 spread, and I am using what I think is a safe strike of 700/900. I will not open the BCS for the iron condor until next week because I view that side of the trade as being more risky.

Yes will also do 200 spread. Did you open all the BPS already? Or save some bullet and wait to sell more next week as well?

 

[samppa]

Planning to open some CC, BPS or BCS for next week, but seems premium was so low (even BPS -900/+700 only have around $1.3), so undecided yet

Next week is thanksgiving week, I assume market would be less fluctuate? Since premium is low next week and 12/3 seems more attractive, would it make sense to open the BCS / BPS for 12/3 first and let the time decay for next week (assuming the market is less fluctuate next week) and close it by end of next week? Well, maybe safer to do it next Monday instead after seeing how this weekend goes first.

In the old days, these short weeks typicalky had shorts piling on and bear raids going on and tsla dropping like a rock.. at least if my memory is right.

But it feels like that's not the case anymore with this stock..

 

[tradenewbie]

In the old days, these short weeks typicalky had shorts piling on and bear raids going on and tsla dropping like a rock.. at least if my memory is right.

But it feels like that's not the case anymore with this stock..

Maybe shorts will take a break during thanksgiving week?
Really missed the 2 months period (before the crazy >900 run), the premium were so attractive even selling far OTM BPS, and could sell a normal BCS without worrying too much about the crazy jump

 

[FS_FRA]

12/3 premiums are looking really good at the moment. Having to watch my 1105 CCs for today, so I'm considering rolling them to 12/3 if need be later today - 1300 CCs are going for around $7, which is a free roll to safety.

BPS for 12/3 900/700 are $4.4 right now - that's intriguing too.

 

[BornToFly]

Yes will also do 200 spread. Did you open all the BPS already? Or save some bullet and wait to sell more next week as well?

They are losing value fast. I opened them all yesterday and I'm already up 30%. They will be worth less on Monday unless the stock drops >2% or so.

 

[elasalle]

sold some 12/3 900/800 BPS $3.58 or ~ 1.7% per week. Not great but still better than nothing.(mine is just supplemental income ...). Not sure if most here are enticed by this type of low returns?
With margin, looks like I can roll the short leg to a put and close the long leg - any time this trade goes south.

All BPS for this week (and past 2 ), expired worthless