Wiki Selling TSLA Options - Be the House

[Flehmenlips]

You have to reduce downside risk. You can also buy puts or sell calls

Buying puts is super helpful with margin. You can also buy back the short leg of a BPS and keep the long leg as downside protection. At this point I am beginning to think a better way to make money in options with TSLA is not to sell CCs or credit spreads, but rather to buy weekly/monthly puts ATM or some strategic percent OTM. Seems like there will nearly always be an opportunity for a profit over the course of a week or month and you have the added benefit of very strong downside risk protection in the case of an event like we are currently in, along with minimal maximum risk. All of my BPS long legs are looking great right now!

 

[strago13]

You have to reduce downside risk. You can also buy puts or sell calls

Right. I know I can buy shitputs, which I priced out and specd out. Not really interested in CC since I think this thing is a spring.

I was also looking at additional things I could do as well. Are you suggesting what I proposed wouldnt work?

 

[Blue horseshoe]

Right. I know I can buy shitputs, which I priced out and specd out. Not really interested in CC since I think this thing is a spring.

I was also looking at additional things I could do as well. Are you suggesting what I proposed wouldnt work?

Yep its definitely a deal with the devil. I just figure premium spent on buying puts as giving up some of my future gains to weather the storm. In terms of put buying you have to weigh the balance of buying puts to hold onto your trades if you have enough time for them to turn around or reduce positions at the worst time to reduce margin exposure.

 

[TheTalkingMule]

Painfully rolled nearly all 1/28 fully ITM BPS to 2/4 for various debits from $3-$8. I just couldn't take the pressure and wanted some breathing room. IMO earnings(on top of any macro tech rebound) gets us back to $1000 before 2/4 and I can close out or profitably roll from there.

Keeping a couple fully ITM 1/28 BPS to roll later in the week so I can see what it looks like and be ready for the next time. Wish I had the fortitude to wait these pricks out til Thursday morning, but I'm still a nervous noob.

If I can hold onto 30-50% of the premiums accumulated while building these positions over the last few weeks, I'll be overjoyed. Not losing the margin would be nice too! Probably a simplistic and inefficient way to go about things, but I'll be better next time.

 

[generalenthu]

posted on the main thread too (its a bear to keep up with), but we are near an extreme low in gross option deltas at 35 million shares, vs a previous low of 49 million shares in may last year when SP was at 555. This is an extreme reading.

As some of you know, I track this here. See the top row in the second table. under the "0" column for the 35 million number (SP = 871)

 

[bkp_duke]

posted on the main thread too (its a bear to keep up with), but we are near an extreme low in gross option deltas at 35 million shares, vs a previous low of 49 million shares in may last year when SP was at 555. This is an extreme reading.

As some of you know, I track this here. See the top row in the second table. under the "0" column for the 35 million number (SP = 871)

For the newbies (me), what does this mean? More pain to come? We've hit bottom?

 

[OrthoSurg]

Assuming they are cash accounts, that's odd for stock transfers within the same brokerage house. But they love to slowly release assets for outside transfers. And you might as well stick a fork in it for trust accounts as they can be a PITA.

Yeah they seem to be terrible. Transferring margin to margin account, no stocks on margin. Can’t even access my account today. Tried to call, 2 hours waiting time. What a day to have a « system upgrade ». Don’t know if the assets were transferred, if the margin requirement is ok. wallstreet managed to crash my bank.

 

[generalenthu]

For the newbies (me), what does this mean? More pain to come? We've hit bottom?

We are very near the bottom if not at the bottom, based on the 20 months of TSLA history I have been tracking. In some ways the stock price is less "frothy" than what it was at 555 in May last year. In the sense that, less of it is net owned via options. Definitely bullish in my book.

But remember if we see a 1989 type flash crash, all bets are off. (Definitely not predicting that. The financial markets have a lot more faith in the people at the helm these days, and if push comes to shove Jpow and Yellen will come to the rescue. they are already probably at the edge of their seats)

 

[vikings123]

posted on the main thread too (its a bear to keep up with), but we are near an extreme low in gross option deltas at 35 million shares, vs a previous low of 49 million shares in may last year when SP was at 555. This is an extreme reading.

As some of you know, I track this here. See the top row in the second table. under the "0" column for the 35 million number (SP = 871)

I guess two comments:

1. I think this is saying that market makers are not hedged so delta squeeze could potentially be in play to a larger extent than normal. Is that correct?
2. How much of this has to do with unwinding of delta from all the ITM calls that expired on Jan 21st?

 

[ReddyLeaf]

853 is the 200 day EMA so it seems to be holding up, could have something to do with MMs/Hedgies trying to avoid the uptick rule too.

Is 843/844 a gap that has not been filled yet? Is that the last gap that needs to be filled? Can anybody confirm?

Let me say upfront, if anyone is looking at me as the expert, well thanks for the vote of confidence, but that’s just sad. There is still a very small, old $843-851.47 gap on 10/15-18/2021. Will it fill? I have no idea, but it’s below the predicted -10% circuit breaker for today, so it will have to wait until tomorrow. I’m in agreement with @Artful Dodger that any further push down will wait until Tues/Wed and possibly to the 200d SMA near $811. I hope it doesn’t happen, and I’m mostly out of cash and powerless to take advantage if it does. Another handful of prearranged $884 buys happened while I was sleeping. My last remaining cash is reserved for below $850. Of course, the good news is that we now must fill last night’s gap on the way back up. Here’s the my latest chart:

 

[generalenthu]

I guess two comments:

1. I think this is saying that market makers are not hedged so delta squeeze could potentially be in play to a larger extent than normal. Is that correct?
2. How much of this has to do with unwinding of delta from all the ITM calls that expired on Jan 21st?

for #1 this doesn't really tell whether the MMs are hedged or not. I am just looking at the options OI that OCC publishes roughly after midnight every day. MMs could be or could not be hedged, but I can say with a high degree of confidence MMs have other things to do than pay close attention to stock catalysts, and other positioning. They are just busy tuning their models, back testing them, and trying to figure whether to be overhedged or underhedged at the margins by a couple of percentage points. Not huge in the big scheme of things. But over time, the small numbers can add up (look up Vanna & Charm flows on the interwebs if you want to learn more)

#2 is a great question. Yes the 1/21 opex had an impact to the the extent that these positions have been taken delivery on, or closed rather than rolled. But I have seen perhaps half of that roll to other expiries for the most part and and if you adjust for that, you have to add may be 8-10 million. That does not change the fact that we are at historically low numbers.

 

[ZeApelido]

Last time that we got hurt most people said "I am touching BCS anymore". How about now? no more BPS?

Actually I would say now is the perfect time to sell agressive LEAP BPS.

 

[juanmedina]

Actually I would say now is the perfect time to sell agressive LEAP BPS.

I agree but I am tapped out. The Jan 2023 800/600 that we sold are paying a 82% return $9K each

 

[generalenthu]

some gamma squeezes seem to be happening in not so small companies. Shopify went from an intraday low of 780 to 963. Easy to relate to as we are in the same size SP numbers.

Be wary of writing extremely short dated calls I guess.

 

[mickificki]

I hope he’s right…

https://twitter.com/x/status/1485668825517412352

I don't understand how exactly the Stephenson Indicator works, but he predicted that on Wednesday his SI will be at $864. Earlier today we were at $852-ish and James intimated that we were in oversold territory.

https://twitter.com/x/status/1485626997023944706

 

[OrthoSurg]

I hope he’s right…

https://twitter.com/x/status/1485668825517412352

This is the exact reason I am holding to my underwater Puts like the Titanic captain.

 

[UnknownSoldier]

EPS over $3/share sounds like hopium but sure let's all hope for the best.

 

[FS_FRA]

Quick question about rolling in IBKR. Feel free to respond privately if this clutters up the thread. How would I roll to a different number of contracts? For example, I have 10x +800/-950 how would I roll these out to 5x +700/-1000, so widen the spread and gain some time for same margin? Been playing with lots of ideas this morning as I'm sure we all have., but can't figure this out in the IBKR roll tool, it seems to always want the same number of contracts to close/open. Thanks.

@Drezil had a good suggestion here a while ago for me. I don't remember anymore where the post is, maybe he can say again.

 

[M3Rider]

That was a nightmarish Monday. Whew.
I’ve held on to my bps, but rolled 13 puts to 1/24 to get extra $200k in preparation for taking full losses later in the week if I have to. 2 more days to survive, then I can start figuring out what and how to roll.

 

[Oil4AsphaultOnly]

welps. today was rather exciting. /s

I had been diligent about keeping at least 10% of my portfolio margin in reserve, and on a down day like today, it wasn't enough! Fortunately, I had covered calls available, so rolled a few out to Jun '23 1500c options to raise enough cash to meet the margin call. I'll deal with the repercussions of THAT decision next year! This allowed me to keep my BPS 1/28 1010/800p until after earnings. *sigh*