juanmedina
Active Member
I opened some positions for next week with the highest strike BPS at 860/780 down 50%. I am trying to play it safe with the slow and steady mentality.
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I use to have the same thoughts so I started to roll my most at risk earlier instead of waiting. Rolled a 1,110 expiry tomorrow to 1,085 expiry 1/28 and got $200 credit. Seeing AH action, seems unlikely I would've been able to do the same trade tomorrow.I am kicking myself for not having stopped what I was doing today to take a roll. Seems like I had the chance to strike improve materially and widen for a decent credit. That will evaporate on open tomorrow if this AH is indicative of where we are heading.
So lesson: roll early dumba**
My pleasure. You can remind me later when I forget.I was able to close out all my BPS this morning when share price was up 25-30 range THANKFULLY. Once share price were up near $40 I was itching to open some 1/28 -900/700 BPS for ~$6 per spread and break one of the golden rules- selling into strength. THANKFULLY I stopped myself in fear of a close like today. The -900/700p became $13 quickly so over -100% loss had I opened the position from this morning’s FOMO.
@adiggs thanks for the reminder of only selling into strength!
Is this naked - assume you did this at today's highs? I just checked EOD numbers and $200 wide spread rolls for a 1/21 1110/910 to 1/28 1085/885 would cost north of $17. Cost of naked roll would be $8.25.I use to have the same thoughts so I started to roll my most at risk earlier instead of waiting. Rolled a 1,110 expiry tomorrow to 1,085 expiry 1/28 and got $200 credit. Seeing AH action, seems unlikely I would've been able to do the same trade tomorrow.
Yes, this is naked. Lucked out on timing and caught it at today's high. Looking at maxpain during this week and saw large call walls at 1000, 1050, 1100, and 1200, so didn't feel confident we would get close to 1100 by end of tomorrow.Is this naked - assume you did this at today's highs? I just checked EOD numbers and $200 wide spread rolls for a 1/21 1110/910 to 1/28 1085/885 would cost north of $17. Cost of naked roll would be $8.25.
Ugh. I am also kicking myself for waiting until tomorrow to roll a couple of my 1/21 spreads. AH indeed looking scary. I was so naïve thinking I could make a decent "passive" income playing this options selling game! Ahahahahahaha! It requires way more attention than my farming job! Elon frequently says "Space is hard." He clearly has never traded options! Haha! Here's hoping for a gap up tomorrow morning...I am kicking myself for not having stopped what I was doing today to take a roll. Seems like I had the chance to strike improve materially and widen for a decent credit. That will evaporate on open tomorrow if this AH is indicative of where we are heading.
So lesson: roll early dumba**
Everyone, newbie or seasoned pro, should read every one of @adiggs ’ posts. Usually verbose, but always full of excellent advice. If you don’t understand today, keep reading until you do. I don’t trade spreads, but your current trades look very problematic to me. I’m rooting for you, and looking forward to reading how you resolve this week’s crisis.Thank you for the extremely thoughtful and insightful post! I have gleaned much from this after three readings and am mining it yet again.
Edit: Technically I did try to buy at today's open $1050c @ $4.20 for tomorrow expiry, but it never executed. That's kinda a YOLO.
Sorry Mule, the bastards got you. I sold c1055s for $7.20 around noon today and they are now showing $0.95 after close. I never expected such a dramatic drop, but have had better than moderate success with similar trades in past weeks. This is a technique that I’ve borrowed from @Yoona’s IC sales (waiting until Wednesday or Thursday when theta is greater and the SP target is relatively obvious). These are fully backed CCs, so no margin or leverage, and not a huge amount of profit (well, enough for my monthly living expenses or a handful of shares). I will bank the cash and wait for that 938-958 gap.Just executed. Cha.........ching!
You haven't won squat til you close! Tho it's looking pretty darn good.....lolSorry Mule, the bastards got you. I sold c1055s for $7.20 around noon today and they are now showing $0.95 after close. I never expected such a dramatic drop, but have had better than moderate success with similar trades in past weeks. This is a technique that I’ve borrowed from @Yoona’s IC sales (waiting until Wednesday or Thursday when theta is greater and the SP target is relatively obvious). These are fully backed CCs, so no margin or leverage, and not a huge amount of profit (well, enough for my monthly living expenses or a handful of shares). I’m will bank the cash and wait for that 938-958 gap.
Cross quoting from the main thread. Still a noobie but lowering IV sounds like a downer for options traders. Are others here concerned about TSLA becoming investment grade? Would this be a gradual change or a light switch?Yes there are index funds, especially 401k funds, that can't invest in companies that aren't rated investment grade.
You could easily start to piece together that the reason TSLA hasn't been rated investment grade despite have better finances than every auto maker is that investment banks and hedge funds, who have proven ties to Moody's/S&P, do not want TSLA to be investment grade because it will take away a ton of volatility.
I mean people said the same thing when Tesla got into S&P. As long as we have TSLA Uber bulls and TSLAQ, market makers and hedge funds will keep it volatile and play both sides. IMHO.Cross quoting from the main thread. Still a noobie but lowering IV sounds like a downer for options traders. Are others here concerned about TSLA becoming investment grade? Would this be a gradual change or a light switch?
Opening up a large amount of buying power combined with TSLA growing into its buying it’s fundamentals will mean less volatility, especially to the downside. It will b backstopped by lagging buying power.I mean people said the same thing when Tesla got into S&P. As long as we have TSLA Uber bulls and TSLAQ, market makers and hedge funds will keep it volatile and play both sides. IMHO.
Rough evening for sureSnapshot tonight - BTC down 8%, /ES down 0.8%, /NQ down 1.5%.
I’m thinking about it, though will likely wait until Friday afternoon, or maybe even Monday. Remember, the MMs are already fixing options prices (where do you think “implied volatility” comes from?). Buying options just fits in with their plan. You need to be nearly certain. I myself have a very poor record on buying short-term calls, maybe winning 1/4 of the time (though those wins can easily be 10x like @TheTalkingMule ). Certainly don’t bet the farm, at most <1%. However, buying long-dated, DITM LEAPs, is much more certain. I’ve seen people interested in Jan 2024 c500s or similar, and those are probably a better bet.BTW, anybody looking at buying calls? I mean the markets can stay irrational but something like 6 weeks out 1250 strike or if you want take a flyer on the next couple of weeks the Feb 04 1200 strike calls are going for $8. Pretty decent risk/reward IMHO.
I like it. Max loss is only about 20k and if using margin this only reduces buying power by about 2k. In terms of early assignment if it were to occur your broker would in turn exercise a corresponding $1900. For each option that would result in a possible $10,000 loss. This is offset by the premium you collected of $8,725 per contract. So in theory you could be on the hook for $1,275 per contract or a max of $19,125. Highly unlikely for early assignment in the near term. For instance if someone were to buy shares at 995 now and buy one of these puts for $1,108 they're spending $2,103 per share to sell it at $2,000.Someone in another place has been talking about a trade he is putting together.
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Please tell me why this is a good/bad idea. This is not my trade, but I have thought about following it. If you're certain TSLA will be over $2,000 by 1/2024 I don't see how opening a DITM LEAP put credit spread would run against you but I don't know what the risk of early assignment on something like this is either.
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