Wiki Selling TSLA Options - Be the House

[UltradoomY]

Since I am naked - was able to close out all Puts and Spreads (only HODL'ing LT shares and Leaps right now) yesterday -
Decided to have some fun....
Buy / Write - Buy at $1137 - Write $1175 for this Friday.
If it doesn't hit - open next week for the same until the week of the 21st. Then set it higher and collect all the sweet come and get it premium.

This is only 5 contracts so nothing monumental but ends up about $25k if it hits this week and slowly builds till earnings or I just have 500 more shares of TSLA that I want to get called away with I dare you CC's

Something to remember for US based accounts - ****make sure to set your cost basis to LIFO or Last in First out for these contracts****
this way your long term shares do not get called away.

Still looking for a good BPS for next week and feel like $1100 / $800 is pretty solid for $26 and some easy management.
Cheers!

 

[Yoona]

as of 335pm, today's top 3 volumes are on:

C 1200 1250 1150

P 1150 1100 1000

EDIT: for the brave, 1150 short straddle 3 DTE is $55 credit

 

[Tempus]

bets are placed for 1/14 - now the boring part. Sitting back and watching for the next few days.

 

[intelligator]

Something to remember for US based accounts - ****make sure to set your cost basis to LIFO or Last in First out for these contracts****
this way your long term shares do not get called away.

In a mixed taxed account, that change would apply to all securities, mutual funds, as well. This morning I STO a BPS for the wrong date, adding to an existing position same strike long and short. I quickly BTC the same number of shares I added, finding that I had taken profit but now have a position with a much lower average cost. It all adds up in that if allowed to expire worthless, overall profit is the same. Would that have been averted if cost bases were set to LIFO? It is set FIFO at moment.

 

[cbh03]

bets are placed for 1/14 - now the boring part. Sitting back and watching for the next few days.

What did you go with? For 1/14, I have X 800/1100 and 2X 850/1050. The 800/1100 make me a little nervous (hence the wider spread), but I believe that I will be able to roll those for a week or 2, if necessary, and that we will have a close above 1100 on 1/21 or 1/28 once earnings are announced

 

[Tempus]

What did you go with? For 1/14, I have X 800/1100 and 2X 850/1050. The 800/1100 make me a little nervous (hence the wider spread), but I believe that I will be able to roll those for a week or 2, if necessary, and that we will have a close above 1100 on 1/21 or 1/28 once earnings are announced

Mix of 850-100- and 900-1000. Experimenting a bit with different spread sizes, and like others have mentioned upthread, 1000 feels pretty good for a floor at this point. Might have to start moving out to 200-wide spreads though going forward to help make potential rolling easier

 

[TheTalkingMule]

These MM's think they can get my shares by head faking me into selling CC's down here. Not hapnin!

Gonna sell a few when SP hits 1230 Thursday.

 

[BrownOuttaSpec]

bets are placed for 1/14 - now the boring part. Sitting back and watching for the next few days.

Same for me I followed someone else with the 1/14 850/1000 @ $3.89. Not the best price, but I wasnt expecting this much of a drawn down today either.

 

[BornToFly]

What did you go with? For 1/14, I have X 800/1100 and 2X 850/1050. The 800/1100 make me a little nervous (hence the wider spread), but I believe that I will be able to roll those for a week or 2, if necessary, and that we will have a close above 1100 on 1/21 or 1/28 once earnings are announced

I pretty much did the same, with the same logic.

 

[EV forever]

STO some 1/14 -980p/880p @$4.25 and -950p/850p @$2.75 I was early, but not too bad if we stabilize here.

A little closer to the sun than I like, but I agree that there should be strong support at $1,000

Congrats to everyone who had the stones to sell CCs or BCS yesterday, those must be printing today.

My ‘gently dip toes in’ CCs opened yesterday for 7Jan -c1360 and 14Jan for -c1420 are doing well today, wished I had closed them out though. They were at about 50-60% max profit.

I opened new BPS positions a little too early in the day, but hey, you can’t time the market perfectly. 7Jan -1090/+990 @4.8 and 14Jan -1090/+990 @13. These are average cost basis as opened at multiple lots during the day. These are all deep in red, but I am certain they will recover. If not, I will roll them till they do

 

[intelligator]

My ‘gently dip toes in’ CCs opened yesterday for 7Jan -c1360 and 14Jan for -c1420 are doing well today, wished I had closed them out though. They were at about 50-60% max profit.

I opened new BPS positions a little too early in the day, but hey, you can’t time the market perfectly. 7Jan -1090/+990 @4.8 and 14Jan -1090/+990 @13. These are average cost basis as opened at multiple lots during the day. These are all deep in red, but I am certain they will recover. If not, I will roll them till they do

I sold same short strike paired with 890 long, for the 14th, 21st, 28th ... same goal - green or roll until ! Also trying to BTC the near spread, open another three weeks out. Kinda dicey though with P&D, earnings, made up stories, where price lands is a moving target. Going to move further OTM until the dust settles.

 

[EVCollies]

Trading BPS at 200 spread, 20K per contract, using all of the available cash in my qualified accounts, I often have cash left in the accounts. I have the ability to produce cash quickly to adjust those BPS if needed.

Playing with @Drezil not advice, I BTO a put yesterday at a delta .3 with auto close at 2x and got lucky with a momentary drop in SP and doubled my money.

Could this be a use of the cash in those accounts? How about a BTO with a put if I'm thinking red pill soon or a call if a green pill soon (need to see that new Matrix movie). Pick a delta .45, auto close at just 10% above the premium paid, with the TSLA Brownian motion I sense > 90% success with DTE > 2. Might get a few trades a week with cash that has been sitting idle.

 

[OrthoSurg]

I was playing hockey with the kids when the dip happened. When they were drinking their hot chocolate milk, around 11:15AM I saw the dip after incredible earnings and couldn’t hold myself. I STO 20x -p990 7/1/2022 for a 3.30 credit. Rolled my -p1145 7/1 to -p1115 14/1 for a small credit and I STO 10x -p1500 20/1/2023 for 530 credit.
opposite extreme contracts. first was to have something for this Friday for fun.
second was to play a little bit safer with the pull back.
third was to cover the rest of my margin, and satisfy my regret of not buying shares below $1000 Before Q4 earnings run up.
I was planning to Sell some boring ETFs from my other account to cover my margin and buy some more chairs however this is perfect. If assigned, I get to purchase 1000 shares at a $970 premium adjusted price in 2023. If TSLA is over $1500, then the government will receive a nice tax donation. I am surprised on how little Impact it had from the broker calculated margin requirement for selling these 10 contracts. Interested in seeing how this position evolves over time with the variation in IV. Might be less interesting income than weeklies and more prone to be destroyed by a black swan event. I wonder how deep ITM they have to get before risking early assignment. Experimenting with some different strategies.

Let me know if you tried those before and what are the pitfalls and the not advice when to BTC such a position if the SP has a sudden +20% run up heading to earnings or when to roll such a position if the SP drops 50% 3 months before expiration because of a black swan event or market correction.

 

[intelligator]

I wonder how deep ITM they have to get before risking early assignment.

Is there a definitive method to approximate early assignment? I am using the method of looking at the opposite OTM call or put , same strike , same date to get a feel for what's left in terms of extrinsic value. For weeklies, it's worked out but I may have simply lucked out. Whether it is close or not , it's helped me weigh the urge to roll early. I am curious of other approaches.

 

[Oil4AsphaultOnly]

I was playing hockey with the kids when the dip happened. When they were drinking their hot chocolate milk, around 11:15AM I saw the dip after incredible earnings and couldn’t hold myself. I STO 20x -p990 7/1/2022 for a 3.30 credit. Rolled my -p1145 7/1 to -p1115 14/1 for a small credit and I STO 10x -p1500 20/1/2023 for 530 credit.
opposite extreme contracts. first was to have something for this Friday for fun.
second was to play a little bit safer with the pull back.
third was to cover the rest of my margin, and satisfy my regret of not buying shares below $1000 Before Q4 earnings run up.
I was planning to Sell some boring ETFs from my other account to cover my margin and buy some more chairs however this is perfect. If assigned, I get to purchase 1000 shares at a $970 premium adjusted price in 2023. If TSLA is over $1500, then the government will receive a nice tax donation. I am surprised on how little Impact it had from the broker calculated margin requirement for selling these 10 contracts. Interested in seeing how this position evolves over time with the variation in IV. Might be less interesting income than weeklies and more prone to be destroyed by a black swan event. I wonder how deep ITM they have to get before risking early assignment. Experimenting with some different strategies.

Let me know if you tried those before and what are the pitfalls and the not advice when to BTC such a position if the SP has a sudden +20% run up heading to earnings or when to roll such a position if the SP drops 50% 3 months before expiration because of a black swan event or market correction.

I'm curious about the 20/1/2023 -p1500. How much of a margin impact did it have? I have some home upgrades I want to do, and my bank won't extend a HELOC to me (they don't have the staff due to covid), so was looking for options before hitting the internet.

 

[BornToFly]

I'm curious about the 20/1/2023 -p1500. How much of a margin impact did it have? I have some home upgrades I want to do, and my bank won't extend a HELOC to me (they don't have the staff due to covid), so was looking for options before hitting the internet.

I used to sell Puts more than a year out (thinking incorrectly that those would be taxed as long term gains). I don't do it anymore because it ties up too much margin (use a margin calculator to see how much it will be before you sell) that I can use to make more money with on weekly BPS. However, if you want more money upfront and are ok with tying up margin for a long time, they are far less stressful. The way I assess assignment risk (I don't know if it is the best way) is to look at the difference between the ITM SP and the strike. If that difference is greater than the Put premium, it typically won't get assigned. Example - sell a 1500 strike and the SP is at 1000. If the premium is $750(00), then there is $250(00) of extrinsic value and it won't get assigned, but If the premium is $500(00), watch out.

 

[ReddyLeaf]

…... I wonder how deep ITM they have to get before risking early assignment. Experimenting with some different strategies.

I sold some June2021 p800s in January when the SP was 850, unfortunately used the premiums and couldn’t buyback. SP dropped all the way to 550 and I was never assigned early. Won’t say it can’t happen.

 

[WattsHappening]

What did you go with? For 1/14, I have X 800/1100 and 2X 850/1050. The 800/1100 make me a little nervous (hence the wider spread), but I believe that I will be able to roll those for a week or 2, if necessary, and that we will have a close above 1100 on 1/21 or 1/28 once earnings are announced

My ‘gently dip toes in’ CCs opened yesterday for 7Jan -c1360 and 14Jan for -c1420 are doing well today, wished I had closed them out though. They were at about 50-60% max profit.

I opened new BPS positions a little too early in the day, but hey, you can’t time the market perfectly. 7Jan -1090/+990 @4.8 and 14Jan -1090/+990 @13. These are average cost basis as opened at multiple lots during the day. These are all deep in red, but I am certain they will recover. If not, I will roll them till they do

Mix of 850-100- and 900-1000. Experimenting a bit with different spread sizes, and like others have mentioned upthread, 1000 feels pretty good for a floor at this point. Might have to start moving out to 200-wide spreads though going forward to help make potential rolling easier

Please excuse this noob question, but could you guys explain with a couple of examples rolling BPSs? And how a wider spread makes that easier? I totally understand the short position and trying to anticipate the lowest the SP could go before it gets into the money. And I understand the cash collateral requirements.

Real world example: I am sitting on a 1/21 +1050/-900 BPS. When would I want to consider rolling this? One example would be if the SP gets down to say $1050 by 1/19. What would the experts here do? Would you roll just the expiration dates in anticipation of SP rising? And how does having wider spreads help with ability to roll for net credit?

Trying to wrap my head around BPS strategy/tactics. And I'd prefer to not have to look back at the thousands of posts on this thread.

TIA!

 

[samppa]

I was playing hockey with the kids when the dip happened. When they were drinking their hot chocolate milk, around 11:15AM I saw the dip after incredible earnings and couldn’t hold myself. I STO 20x -p990 7/1/2022 for a 3.30 credit. Rolled my -p1145 7/1 to -p1115 14/1 for a small credit and I STO 10x -p1500 20/1/2023 for 530 credit.
opposite extreme contracts. first was to have something for this Friday for fun.
second was to play a little bit safer with the pull back.
third was to cover the rest of my margin, and satisfy my regret of not buying shares below $1000 Before Q4 earnings run up.
I was planning to Sell some boring ETFs from my other account to cover my margin and buy some more chairs however this is perfect. If assigned, I get to purchase 1000 shares at a $970 premium adjusted price in 2023. If TSLA is over $1500, then the government will receive a nice tax donation. I am surprised on how little Impact it had from the broker calculated margin requirement for selling these 10 contracts. Interested in seeing how this position evolves over time with the variation in IV. Might be less interesting income than weeklies and more prone to be destroyed by a black swan event. I wonder how deep ITM they have to get before risking early assignment. Experimenting with some different strategies.

Let me know if you tried those before and what are the pitfalls and the not advice when to BTC such a position if the SP has a sudden +20% run up heading to earnings or when to roll such a position if the SP drops 50% 3 months before expiration because of a black swan event or market correction.

curious too about those 20/1/2023 1500 puts.
what's the collateral for margin for these?
if it's stock, what will you do if we get a black swan and 50% drop?
oh sorry, looks like you will have enough margin to cover even with a 50% drop?

I was early assigned before the new year, happened with short ditm puts and 2 days before expiry. No timevalue left. Actually these were BPS, and even the long leg was itm so I could sell that to mitigate.. now I still hold the shares that were put to me. Waiting for ER rally to sell them.

 

[ammulder]

Without portfolio margin the margin required for a long-term put is usually the max loss — $100 x strike or $150,000 for a $1500 strike put — though you get the premium to offset. I’ve seen people say their broker deducts the premium from the margin required, but I’m guessing that’s for the margin required to place the trade… once you’ve made the sale and spent the premium I would expect your broker to want to be able to cover the max loss with reserved margin.

Different for portfolio margin and also you can buy low-strike puts to reclaim some of the margin in a pinch, making a temporary or permanent spread…