Wiki Selling TSLA Options - Be the House

[FS_FRA]

I learned this morning that my risk muscles are still not where they need to be. Before opening I had laid out 3 things I would consider doing (roll for credit to next week at same strike, roll for min. credit as far out to get below -900/+700, do nothing). On the opening drop, I found myself immediately hustling to roll to next week for a reasonable credit, ignoring my two options I had laid out. It was a strange feeling...

I think I should have left everything alone. Hindsight and all that....

Only positive trade for me this morning was more TSLA at 980, and laddered GTC buy orders down to 960 in order to fill up an odd-lot TSLA count to the next 100. I decided over the xmas break that for 2022 I'd use most of the premium I'm making in 2022 with options trading to buy more TLSA. I find that the amount of margin I have available to me is sufficient to make my weekly targets and I don't need to be cash-heavy to do so. So I'm buying TSLA with premium earning (premium minus tax....) for the year. My average price is at $127 as of today. Will be interesting where I end up in 12/2022.

 

[FS_FRA]

A bit of experience with margin calls: Always call your broker if you can. TDA is very responsive and helpful. I think in general, the brokerage is on your side. It is not in their best interest to forcibly liquidate their "paying" customers and they will work with you as much as is possible. I always ask for the due date on my margin call. It is usually about 5 days away. Of course this is not a hard date and you can be forcibly liquidated at any time. However, my experience is that has never happened. Usually you will appreciate out of the margin call position within that time period. If it is not looking good, you can often take other evasive maneuvers such as depositing cash, generating some premium, selling some equities, buying some protective puts to decrease your maintenance requirement, etc. Another super helpful tool is the "Explain Margin" tab in ThinkorSwim (TDA). It also shows you your PNR value (Point of No Return). It is possible to get this value to a level that will protect your account fully against a SP drop to $0 with protective puts (If I understand it correctly. Others please correct me if wrong) I have an unfortunate habit of surfing my margin balance and have an uncomfortable amount of experience dipping in and out of margin calls. I realize this is a dangerous post. Cheers!

IBKR I'm told simply liquidates positions automatically. There is no desk to call to sort things out. I've not had it happen, and I don't plan to.

 

[samppa]

IBKR I'm told simply liquidates positions automatically. There is no desk to call to sort things out. I've not had it happen, and I don't plan to.

Yes, that is what they do.
You can spesify "liquidate last" on some positions, not sure if you can specify "liquidate first"..
IBKR has no margin calls.

 

[Mokuzai]

Just rolled my -1060/+960 BPS from this Friday to Feb 4 -1020/+920 for $3.15 credit. Took some hand wringing to wait it out to the end of the day. Will try to close it out if we get a rise into earnings.

 

[corduroy]

I really hope so....

 

[wooter]

Since I lost my Jan14 1100/980bps to the IBKR margin nanny, I took the 80% profit of my 5x Jan114 1200/1400bcs and set up 5x Jan21 1200/1300.

I also sold 5x Feb25 800p's I had bought to build margin, and had 20% profit of that.

 

[Flehmenlips]

Yes, that is what they do.
You can spesify "liquidate last" on some positions, not sure if you can specify "liquidate first"..
IBKR has no margin calls.

Yea, maybe everyone should just ignore my post! lol! Like I said, it is dangerous and not recommended... Maybe we could start a "best practices" list regarding margin and buffers and risk and such. I could be a good example of what is NOT recommended.

 

[MP3Mike]

You can thank me for the end of day bump, I sold some CCs that I probably shouldn't have, and now they are under water... But my BPSs are doing better...

 

[generalenthu]

IV seems to have stayed persistently high today, even as we outperformed QQQ and QQQ IV has dropped a bunch. My takeaway is that the option demand for the earnings trade has started, that should cause us to continue to outperform the market from the added deltas.

Count me among those who got shaken out of my positions. I rolled my 1000 puts this week to 925 post earnings like the MDs mom, and also shaved off a bit of the long leg of my earnings diagonals at approximately the worst time of the day, oh well. Will see if my theta this week can pay for something good pre-earnings.

 

[Knightshade]

I learned this morning that my risk muscles are still not where they need to be. Before opening I had laid out 3 things I would consider doing (roll for credit to next week at same strike, roll for min. credit as far out to get below -900/+700, do nothing). On the opening drop, I found myself immediately hustling to roll to next week for a reasonable credit, ignoring my two options I had laid out. It was a strange feeling...

I think I should have left everything alone. Hindsight and all that....

I'm currently thinking of this morning, in hindsight, like this:

When I rolled with SP around 990.....not quite to halfway down my spread but not terribly far either.... how mad would I be having done nothing instead if it had gone down another $50 by late afternoon, versus how mad am I now that it went up $50?

And I have to think I'd have been a lot more upset by that first one. If I'm not willing to roll as my spreads approach halfway into the spread, why bother with those spread widths? They're there for risk management- I managed my risk. And being wrong to the risky side is a lot bigger loss potential then being wrong to the safe side.

 

[samppa]

Sold a -1100 call for this friday. It's covered by 02/04 1000 call. Really really hoping this goes itm and I can close my -1100/+800 bps

 

[Tempus]

Mostly stood pat today - clearly the 1/14 850-1000's look a bit better than they did in the morning. I did make one adjustment. I had a set of 910-1010's that I rolled to 890-990 1/21 for a decent credit mid-afternoon. Felt like with the strong upward movement today it was a good time to reduce risk a bit with the roll to get below 1k in case we take a dump in the latter half of the week

 

[Bunky]

Amazing how quickly you can go from worrying about puts to worrying about calls

 

[vikings123]

You can thank me for the end of day bump, I sold some CCs that I probably shouldn't have, and now they are under water... But my BPSs are doing better...

Yep same here. I opened a bunch of 1150/1300 Bear Call Spreads and a few 1080/1110 bear call spreads for Jan 14th expiry just before the stock took off. I should have stuck with my bullish conviction(see my weekend post) about Tesla, instead I over complicated things by dipping into BCS. It's looking like I will have to roll the 1080/1100 for sure and the 1150/1300 if required.

The only good thing I did today was sell all the puts for 875 strike from my 1000/875 Jan 28th BPS when the stock was in the 990s, essentially converting my BPS to margin covered puts.

I need to write this on a post it note and stick it on my monitor: BUY LOW SELL HIGH

Strong close there, can you imagine all the shorts that got caught on the drop from 1200 to 1010 last week?

 

[st_lopes]

the BCS was for 'gravy' income because i am thinking 1200 close is very unlikely and probability of success is very high

changed my mind and closed it already

$2k quick profit more than enough to pay for my $792 Costco bill this morning

I keep finding myself arguing with myself about the gravy as well... I always feel weird NOT having a BPS paired with a BCS. Another one of those muscles that need exercise.

 

[generalenthu]

I keep finding myself arguing with myself about the gravy as well... I always feel weird NOT having a BPS paired with a BCS. Another one of those muscles that need exercise.

My justification for not writing BCS, at least in any significant size is that, if my BPS is threatened, I can flip or flip roll a portion of it into BCS. If I am already carrying a BCS, it becomes awkward as I can't psychologically handle BCS in size, with all the upside risk.

I think this is more pertinent to me as I do very wide BPS and I manage the position before or when the SP = Short Strike. Also unlike the majority here, I use margin for my BPS, and hence tend to be more cautious than the average here. That leads me to adjust the positions a bit more often, but I prefer that tradeoff to the alternative.

 

[CHGolferJim]

STO more 011422C1100 at $11.59 at 3:41pm (missed the $10 spurt in SP at the end which took the cc to $14.67).
Will I have to roll?

 

[InTheShadows]

Start a hedge fund, I'll send you my $$$ and pay you to invest it.

EDIT - you guys/gals are marking this funny. I'm only 1/4 joking.

No way man. Take the knowledge from here and learn from it and apply it to your own portfolio.

We were playing would you rather with our son last week and he asked would you rather loose all of your possessions or all of your memories. I didn’t think long and said possessions.

He said but all that money. I said so what, with the knowledge I have I can rebuild it. He said you don’t have one penny left. I said yea, I’d go get a job and start from scratch. It Mike take a decade to start to build it back up to make really nice returns but it would happen.

So many people get into big problems when they manage someone else’s money or follow their trades. When you follow trades and don’t know how to repair bad ones on your own you are stuck.

This isn’t targeted at you duke. It’s just a trigger of mine, mostly from friends and family asking me to manage their accounts and tell them what to do. Only one so far has started with post one of this thread.

 

[OrthoSurg]

Yes, that is what they do.
You can spesify "liquidate last" on some positions, not sure if you can specify "liquidate first"..
IBKR has no margin calls.

I have found National Bank to be soft on margin calls.
they haven’t liquidated anything in 48 hours.
I sold some positions I wanted to sell for a long time, transfered extra money and initiated some positions transfers from another account. However, they could have liquidated some Puts positions at the very low this morning, instead they reviewed my trades and let me roll the -p1115 and -p1050 to next month.

I might have been ok to leave the -p1050 alone but when I saw 980 this morning I thought the 730 max pain target from MMs could become a real thing. Chickened out for nothing.

Respect to the ones who held the line and had managed to do the hardest thing to do: nothing.

 

[WattsHappening]

STO more 011422C1100 at $11.59 at 3:41pm (missed the $10 spurt in SP at the end which took the cc to $14.67).
Will I have to roll?

Many of us here sure hope so.