Wiki Selling TSLA Options - Be the House

[FS_FRA]

OK, so while we are talking rolling - some more ideas I'd love some non-advice on:

12/17 -900/700 BPS opened @ $4 last week, currently @ $10

With Theta at $3 and the SP still a few ticks away from my short, I guess the best thing to do is to wait until at least Thursday and then act, as @UltradoomY suggested not advised. Obviously if the short goes ITM, then I'd act immediately.

A roll right now to 12/23 would net me $10. Cash in the pocket, but another week to watch the share price get driven down as Elons's sale continues-

 

[euro2012]

OK, so while we are talking rolling - some more ideas I'd love some non-advice on:

12/17 -900/700 BPS opened @ $4 last week, currently @ $10

With Theta at $3 and the SP still a few ticks away from my short, I guess the best thing to do is to wait until at least Thursday and then act, as @UltradoomY suggested not advised. Obviously if the short goes ITM, then I'd act immediately.

A roll right now to 12/23 would net me $10. Cash in the pocket, but another week to watch the share price get driven down as Elons's sale continues-

I am in the exact same boat. 900/700 BPS for 12/17. FWIW, I’m waiting until at least Wed/Thu to look at rolling, unless we go below 900. Even then, with the wider spread, you really are good until about the midpoint (800 in this case) when it comes to rolling. Thats one of the upsides of a wider spread (with a higher margin requirement being the ‘downside’). I want to let some more theta burn before I roll. When I do roll, I will likely keep the same strikes as I do not see us being below 900 for long, if ever.

 

[BornToFly]

OK, so while we are talking rolling - some more ideas I'd love some non-advice on:

12/17 -900/700 BPS opened @ $4 last week, currently @ $10

With Theta at $3 and the SP still a few ticks away from my short, I guess the best thing to do is to wait until at least Thursday and then act, as @UltradoomY suggested not advised. Obviously if the short goes ITM, then I'd act immediately.

A roll right now to 12/23 would net me $10. Cash in the pocket, but another week to watch the share price get driven down as Elons's sale continues-

Nice wide spread still OTM. I would wait.

 

[dc_h]

So, based upon this (and I don't disagree), what's the "not advice" for rolling my 930/980 BPS that expires on 12/17. Let more theta burn, with the risk of SP going even lower, or go for a roll at the first opportunity?

Tough call. If Elon sells the rest of his shares this week, price should decline further this week. From what I've read, 910 is a point of strong resistance, but so was 960. It's hard to get a good premium and move your strikes down the closer the market is. I moved my 12 17 930-830 BPS to 12-23 900-800. Not as far down as I'd like, but I can roll again if needed. I keep hoping Austin will open and give the stock a boost. Not selling CC's at this point, the premiums are low and if Elon finishes selling combined with opening/s in Austin &/or Berlin, we should get a bounce up. If he sold today, he'll be 80% done and some funds may start buying in anticipation of a rebound.

 

[vikings123]

Tough call. If Elon sells the rest of his shares this week, price should decline further this week. From what I've read, 910 is a point of strong resistance, but so was 960. It's hard to get a good premium and move your strikes down the closer the market is. I moved my 12 17 930-830 BPS to 12-23 900-800. Not as far down as I'd like, but I can roll again if needed. I keep hoping Austin will open and give the stock a boost. Not selling CC's at this point, the premiums are low and if Elon finishes selling combined with opening/s in Austin &/or Berlin, we should get a bounce up. If he sold today, he'll be 80% done and some funds may start buying in anticipation of a rebound.

I don’t think Austin or Berlin opening will act as a catalyst. I’m looking to sell covered calls on any strength. Given the Elon selling and macro conditions I feel like a strong bounce is very unlikely. Probably need another Hertz like news. I already sold a bunch this morning, picked 1020 strike for 12/23 and 1005 Dec 17 2021.

I’d much rather roll my covered call positions than BPS given macro conditions.

 

[adiggs]

I am in the exact same boat. 900/700 BPS for 12/17. FWIW, I’m waiting until at least Wed/Thu to look at rolling, unless we go below 900. Even then, with the wider spread, you really are good until about the midpoint (800 in this case) when it comes to rolling. Thats one of the upsides of a wider spread (with a higher margin requirement being the ‘downside’). I want to let some more theta burn before I roll. When I do roll, I will likely keep the same strikes as I do not see us being below 900 for long, if ever.

Something that helped me last week with a wide spread was I had done some planning ahead of time and settled on a share price that was 1/4th of the way ITM - it didn't matter what else was going on, if we touched that price then I was rolling. I wanted that to happen as late in the week as possible, but it happened early in the week.

The benefit was that when the moment came I didn't dither about whether the shares might recover/ might not; what will I do now, etc.. In that case I was able to roll down $15 on my max strike improvement roll.


I chose 1/4th as I'd done some example rolls and found that I could still get a reasonably good result on a 1 week roll when 1/4th of the way ITM. At 1/2 that turns into a straight out / $0 credit roll and I wanted something better than that. Your own threshold will be different, but for me at least the objective is income and if I'm needing to watch the share price each day or even each hour, then that's a good hint that whatever I'm doing, then it isn't consistent with an income objective.

Now I've got 650/850s and will probably do the same - if we touch 800 then I'm rolling.


I'm really, really ready for that end of year / start of year good news to start flowing and the share price to get moving up as I (and many) have been expecting.

 

[Tslynk67]

I think Elon's in the house again...

 

[FS_FRA]

Something that helped me last week with a wide spread was I had done some planning ahead of time and settled on a share price that was 1/4th of the way ITM - it didn't matter what else was going on, if we touched that price then I was rolling. I wanted that to happen as late in the week as possible, but it happened early in the week.

The benefit was that when the moment came I didn't dither about whether the shares might recover/ might not; what will I do now, etc.. In that case I was able to roll down $15 on my max strike improvement roll.


I chose 1/4th as I'd done some example rolls and found that I could still get a reasonably good result on a 1 week roll when 1/4th of the way ITM. At 1/2 that turns into a straight out / $0 credit roll and I wanted something better than that. Your own threshold will be different, but for me at least the objective is income and if I'm needing to watch the share price each day or even each hour, then that's a good hint that whatever I'm doing, then it isn't consistent with an income objective.

Now I've got 650/850s and will probably do the same - if we touch 800 then I'm rolling.


I'm really, really ready for that end of year / start of year good news to start flowing and the share price to get moving up as I (and many) have been expecting.

I like the idea of choosing a strike at which point you roll, no matter what. 1/4 for me would be 850. Did you roll the entire spread, or just the short?

 

[FS_FRA]

I think Elon's in the house again...

Based on this protracted draw-down to 930, I'd agree. Famous last words for today: seems like THEY don't want to go below 930 today.

Also, if Elon sells today as per his normal quota, then I believe he'll be more or less 85% done. Hopefully that will trigger some upward pressure.

 

[TheTalkingMule]

I like the idea of choosing a strike at which point you roll, no matter what. 1/4 for me would be 850. Did you roll the entire spread, or just the short?

Anything we can do to put this more on autopilot is great for me. Little tidbits like this are a huge help.

On Fidelity I obviously could set up a sell order to roll a spread if a certain SP is crossed. I wonder how many different scenarios I could put in for the same spread to automate the closing of a BPS? Can't have two sell orders for the same spread, but maybe there's some complicated contingency order I could string together. Will research and report back.

 

[adiggs]

I like the idea of choosing a strike at which point you roll, no matter what. 1/4 for me would be 850. Did you roll the entire spread, or just the short?

I rolled everything, but had 3 different accounts with that position, and used 3 different rolls. I wanted to experiment and see how things went.

I rolled to 735/1035 for a max strike improvement roll. This one actually moved my midpoint down $15 which the others did not.

I rolled a second to 750/1050. Just straight out for a max credit with an expectation of recovery.

The third I compressed the spread width and increased the contract count. $300 down to $200 and 50% more contracts. That moved to 800/1000. Interestingly to me the midpoint did not move - the short strike came down $50 though, with another width compression available to $100 if needed.


With the price action last week they all ended up about the same. I haven't analyzed the 3 trades closely but all 3 accounts ended up with expirations for this week and had small losses at the end of last week; I closed those positions on Thursday or Friday with the small move up. I had a better close opportunity earlier in the week - something with an actual gain out of at least the one I care most about (the brokerage from which I draw actual living expenses as needed) but I didn't take it. That share price increase I was expecting didn't happen


I didn't think about rolling the short only. Then again I was adding 1 week to expiration and wasn't looking at keeping the long and then needing to roll it separately. That would have worked out well in this instance but separating the two has worked badly for me as well. Well and badly were both small $$ and I have previously decided that breaking up the spread turned into a lot of mental energy for little reward (or little loss). So I don't do that.


Along these lines, something I've been thinking about off and on is that I put about as much energy into each different position I'm in. Its particularly noticeable right now as I have a trivial purchased call position for Jan '22 900 strike. Trivial is about 1/5th the # of contracts as a Feb '22 900 strike that I also have a bunch of. The nearer contract should be getting more attention but nothing like equal attention as those Feb contracts.

My conclusion from that - I keep my total # of positions reasonably low, where they are different I try to keep them all with a similar rationale and evolution / management so I can think of that variety of positions as roughly the same (such as the 3 different rolls above), so I don't go crazy or eat a lot of extra time on them. The Jan '22 900 strike contracts are, in retrospect, a mistake. Not because I think they'll lose money but because they're eating too much mental energy for the size of the position.

 

[adiggs]

Anything we can do to put this more on autopilot is great for me. Little tidbits like this are a huge help.

On Fidelity I obviously could set up a sell order to roll a spread if a certain SP is crossed. I wonder how many different scenarios I could put in for the same spread to automate the closing of a BPS? Can't have two sell orders for the same spread, but maybe there's some complicated contingency order I could string together. Will research and report back.

The test rolls were entirely manual. What I did was considering the share price at the point in time I was setting these up, I 'changed' my put spread to be $75 ITM at that point. So the 750/1050s became something like 800/1100s in my test, and then I 'rolled' them 1 week to whatever position would net me a credit to see what that would be. I also tried them out as 850/1150s and really didn't like that roll.

These were all manual and difficult to repeat (for me) in volume. I was just looking for an approximation of what I'd be able to do if (when) the share price kept going down.


As for the actual roll I didn't enter any orders ahead of time as I didn't know what actual rolls would be available. With the $300 wide spreads I used the last couple of weeks the insurance put was running into multiples of $50 problems. I.e. I could roll 750/1050 down to 700/1000 but I could go to 690/990 because there wasn't a 690 strike available. That's a problem with wide spreads to be aware of - spread width compression (or expansion if you have the backing) may become necessary in that case.

 

[OrthoSurg]

What pisses me off is TSLA is down 1.6%, and the Jan 2024 1500 CC I want to buy back are actually more expensive than yesterday....

Peaking volatility is a pain in the a$$.

Starting to learn this seeing my positions go -100% right after I sell them when volatility decide to go up from hedgies selling off.

I am ready for a reversal now. I don’t wanna see in the 800s. Not mentally ready.

 

[Bunky]

Rolled some 940/870s and 950/860s to 12/23 mostly 930/850s. Still a bit too close to the sun for my liking but hopefully the sun can also rise back higher into the sky by then

 

[BornToFly]

I haven't been trading long enough to know how the market will react to the Fed meeting tomorrow. Has the market dropped enough the last two days that it will go up no matter what? Or, will it go down more it doesn't like the results? Because of this, I de-risked and dropped my 750/950 to 700/900 still for this Friday.

 

[adiggs]

Violating my own rule about selling into strength I have endeavored to sell calls today into the absolute lowest price possible. When the shares reverse aggressively and push my new 12/23 1000 strike calls deeply ITM, y'all can thank me for my sacrifice. These are all lcc's - I won't be taking assignment on any shares with these.

These are all in retirement accounts so some aggressive rolls for both strike and credits are in the cards if/when they get close to the money.

And if this never-ending slide continues then at least I'll be earning some income on the call side.

edit: oh yeah; 13.30 credit. vs $4 credit for this week.

 

[vikings123]

I haven't been trading long enough to know how the market will react to the Fed meeting tomorrow. Has the market dropped enough the last two days that it will go up no matter what? Or, will it go down more it doesn't like the results? Because of this, I de-risked and dropped my 750/950 to 700/900 still for this Friday.

Not an expert by any means but the consensus seems to be that rate hikes are inevitable. It’s the pace of rate increases that the market is wanting to know.

My guess is if the fed stays with previously announced timelines then we might see a relief rally. OTOH if the fed says we are increasing the pace because of inflation data then I think there is more pain. Just my interpretation.

 

[Tslynk67]

I haven't been trading long enough to know how the market will react to the Fed meeting tomorrow. Has the market dropped enough the last two days that it will go up no matter what? Or, will it go down more it doesn't like the results? Because of this, I de-risked and dropped my 750/950 to 700/900 still for this Friday.

Previous time I think the markets reacted positively even though the policy talk turned hawkish - I think there was some general relief that they finally said they're looking to start tapering

So difficult to judge...

 

[corduroy]

As far as rolling current week expirations that are still OTM but close, my bias is heavily towards not rolling unless absolutely necessary. I want positions to be resolved the current week whenever possible. My personal view is that 90% of the management of position is taken care of when you enter the trade. So I try to select strikes that are farther OTM, and they will most likely not need managing (unless things really go Texas Institute up). Sure I leave money on the table, but less management headaches are worth it for me. I also still have a full time job so I can't watch the ticker all day just most of it.

I have 12/17 750/850s in play. While these are getting a little close for comfort, I wouldn't consider rolling until we hit 850.

 

[elasalle]

I have BPS from -900/850 onwards for this week. (thought they would be safe)

Though they would be safe because of 100MA @ 910, and a 895-950 gap .. which even if filled would reverse

It's still Tue, so hoping for prices to hold and get some more Theta decay .. but who knows ...

+ the recent run up to 1200, had be converting all my calls to Shares and managing CC's and extending them out. So glad i did.
Now am back to getting some Calls from selling shares