corduroy
Active Member
These slow bleed days are not so great for opening new weekly BPS. It would have been much better for premiums if we would have dropped straight to $1030 in 5 minutes. Even so, I opened some 12/17 750/850s @ $2.25
-
Want to remove ads? Register an account and login to see fewer ads, and become a Supporting Member to remove almost all ads.
Wiki Selling TSLA Options - Be the House
- Thread starter adiggs
- Start date
BrownOuttaSpec
Active Member
I thought the official China production numbers for November (not sales/export numbers) were to be expected next week.
Edit: found it... your post in the other thread
Tesla, TSLA & the Investment World: the Perpetual Investors' Roundtable
Last edited:
I feel like my hands are tied with just single bullet CSP for the goals I had in mind so I'm trying out further out expiries from 1-2 weeks to 4 weeks. I've ignored my own guide with % from OTM and days open but the strike would still be something I would buy TSLA shares in a heartbeat.
Last week within a span of 2-3 days: 12/3 800P (1.40) rolled to 12/10 820P (2.96) rolled to 12/31 820P (15.17). Up 50% already.
Last week within a span of 2-3 days: 12/3 800P (1.40) rolled to 12/10 820P (2.96) rolled to 12/31 820P (15.17). Up 50% already.
I had an interesting morning. Sold 3x 12/17 930/830 BPS at $7.15. While I did not have any other spreads of the same strikes, Fidelity created two spreads ... 3x 950/830, 3x 930/820 and reduced an existing spread of 12/17 950/820 by 3. The net effect is the same margin. If I want to close, I just need to choose one of the two new and overwrite the strike of the borrowed puts.
I've made use of today's drop to roll some far DTE purchased calls closer to the money. In particular June '22 600 strike calls have been rolled up to June '22 750 strike calls with the freed up cash going into the purchase of Feb '22 900 strike calls. All of these calls are there for the purpose of selling covered calls, with the Feb calls a more aggressive version intended to take advantage of what I expect to be a very good end of December and January.
With the possibility that they won't be so great being funded by weekly moderately aggressive covered calls. WIth the shares down today I'm looking for the next up day to open the next batch of cc.
With the possibility that they won't be so great being funded by weekly moderately aggressive covered calls. WIth the shares down today I'm looking for the next up day to open the next batch of cc.
Have closed 1150/1200 BCS for this week at 80% profit.
Orders in to close my 1250/1300 BCS 12/17 at 80% haven't yet filled, but likely will if this price action holds. I may decide to close them for slightly less of a gain on the odd chance this evening actually is a catalyst. The next 90 minutes will dictate that decision.
Still holding 920 and 900 BPS for next week, and I also added some 830 BPS for next week (behind the lower bound of a gap that goes back to October 15 at this point). All $50 spreads.
Orders in to close my 1250/1300 BCS 12/17 at 80% haven't yet filled, but likely will if this price action holds. I may decide to close them for slightly less of a gain on the odd chance this evening actually is a catalyst. The next 90 minutes will dictate that decision.
Still holding 920 and 900 BPS for next week, and I also added some 830 BPS for next week (behind the lower bound of a gap that goes back to October 15 at this point). All $50 spreads.
I wonder if this is some risk-off in front of tomorrow morning's CPI number. If it comes in hot, growth stocks could get whacked even more.
Closed the BCS at 65%. Time to make some popcorn for after hours.
There's nothing inherently wrong with them.Isn't selling LEAP PUT just that?
Jan 2023 $1000 PUT is ~250 thats 250/(1000-250) = 33%
Jan 2023 $1100 PUT is just over $300 thats 300/(1100-300) = 37%
Jan 2023 $900 PUT it is around 27%
My thinking is that yearly premiums are lower because risk of ending in the money over time do not increase linearly, e.g. risk over period of 1 year is not 12x larger than for monthly option, but only ~3.5x larger*
So... technically speaking if one would take equivalent level of risk for yearly PUT, by either levering up 3x or widening the strike the return rate would be close to 100%.
I am leaning to go -PUT LEAP, but still not 100% convinced. So I vent here with hope someone will point out error in my logic, or even better.... to hear that everyone here consistently clocks over 100% p.a. and thus LEAP PUTs option is not attractive.
*) that is a bit of the lie for the sake of more convenient math.
In fact it is expected share price range over 1year that is 3.5 times larger than expected monthtly price range.
Here is more info on expiration date vs probability in the money:
Reason most don't like to do it (IMO) is because your money is tied up for a long time burning off the time value in the contract.
You should be able to make considerably more with the same amount of capital doing weekly contracts and have the ability to sit out if you want or do something else with the money instead of having it tied up.
If you plan to jump in and out of the leaps more frequently - they do not move around as much with share price changes as you have noted above and also usually have less liquidity than weekly contracts.
That's really the only downside that I can see with my limited knowledge.
Good luck!
LightngMcQueen
Aspirationally Rational
I wonder though what are realistic yearly returns for more frequent trading? I had some luck over last year, but still do not believe it is repeatable model.
When I read Gary Black tweet this week:
"I normally sell weekly $TSLA calls 15-20% out of the money and target 15-20% annual returns. "
My reaction was ... (1) I was making more ...(2) probably because I took too much risk.
I rolled out my 650/950 spreads for 12/10 to next week (12/17) earlier this week and thought I got nice premiums for the roll. Would have been much better today, but who knew we will be back here.
And in case we linger here till early next week, should be getting some juicy rolls for 12/24. Not in a hurry to roll as there is a lot of theta left at these levels. They are essentially at breakeven prices, three days after the sale.
And in case we linger here till early next week, should be getting some juicy rolls for 12/24. Not in a hurry to roll as there is a lot of theta left at these levels. They are essentially at breakeven prices, three days after the sale.
Last edited:
This drop was too enticing to pass up
Sold some 12/17 950P
Sold some 12/17 950P
I guess there are 5 more tranches or about 4.7 million from the 10b5 sales left per Gary's math and I think the numbers add up.
The price doesn't really matter to Elon and it makes sense for him to finish it up this year. While there's an upward bias seasonally, I believe the volumes get lower as folks start checking out for the holidays.
One silver lining is Elon sold 6.3 million shares in first 2 weeks of November. These sales would impact the s&p 500 IWF ( index weight factor). In other words, the float has increased and some of this has to be bought by the index funds. To the tune of 1.5 million or so shares.
i hope Elon took advantage of this and setup some 10b5 sales for next Friday, but not sure.
Personally I was looking to roll up my short puts a bit aggressively (aggressively for me, not @Lycanthrope style) given the catalysts, but have been holding back a bit telling myself patience grasshopper!
Of course there's the wild card of a secondary. If Tesla is not selling shares, why in the world would they care about talking to a group of investors? Doesn't add up.
Anyways I think between all these dynamics, we should have a pretty interesting December.
The price doesn't really matter to Elon and it makes sense for him to finish it up this year. While there's an upward bias seasonally, I believe the volumes get lower as folks start checking out for the holidays.
One silver lining is Elon sold 6.3 million shares in first 2 weeks of November. These sales would impact the s&p 500 IWF ( index weight factor). In other words, the float has increased and some of this has to be bought by the index funds. To the tune of 1.5 million or so shares.
i hope Elon took advantage of this and setup some 10b5 sales for next Friday, but not sure.
Personally I was looking to roll up my short puts a bit aggressively (aggressively for me, not @Lycanthrope style) given the catalysts, but have been holding back a bit telling myself patience grasshopper!
Of course there's the wild card of a secondary. If Tesla is not selling shares, why in the world would they care about talking to a group of investors? Doesn't add up.
Anyways I think between all these dynamics, we should have a pretty interesting December.
There’s always the risk of a downward Macro move that doesn’t move back up enough for a while.Isn't selling LEAP PUT just that?
Jan 2023 $1000 PUT is ~250 thats 250/(1000-250) = 33%
Jan 2023 $1100 PUT is just over $300 thats 300/(1100-300) = 37%
Jan 2023 $900 PUT it is around 27%
My thinking is that yearly premiums are lower because risk of ending in the money over time does not increase linearly, e.g. risk over period of 1 year is not 12x larger than for monthly option, but only ~3.5x larger*
So... technically speaking if one would take equivalent level of risk for yearly PUT, by either levering up 3x or widening the strike the return rate would be close to 100%.
I am leaning to go -PUT LEAP, but still not 100% convinced. So I vent here with hope someone will point out error in my logic, or even better.... to hear that everyone here consistently clocks over 100% p.a. and thus LEAP PUTs option is not attractive
*) that is a bit of the lie for the sake of more convenient math.
In fact it is expected share price range over 1year that is 3.5 times larger than expected monthtly price range.
Here is more info on expiration date vs probability in the money:
1 minute before the bell yesterday, I couldn't help but buy myself some Christmas YOLO's
Grabbed some $1050 calls for $2..... they expire today.....
Let's see how this goes!
Also still holding my BPS that I rolled from 12/10 to 12/17 for next week - 980/780
If we get a real push below 980 I will roll these again but looking forward to closing them for above 90% next week. Even though (with the drop at close) they were up between 60-77% yesterday - the short leg is still 6 digits to close... I mean way less than the premium gained, but I don't want to give that much back!!
Grabbed some $1050 calls for $2..... they expire today.....
Let's see how this goes!
Also still holding my BPS that I rolled from 12/10 to 12/17 for next week - 980/780
If we get a real push below 980 I will roll these again but looking forward to closing them for above 90% next week. Even though (with the drop at close) they were up between 60-77% yesterday - the short leg is still 6 digits to close... I mean way less than the premium gained, but I don't want to give that much back!!
Similar threads
