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Wiki Selling TSLA Options - Be the House
- Thread starter adiggs
- Start date
Through a cold sweat, nausea, and trembling hands I made it through the morning. I was briefly trapped with a potential margin call and unable to trade - came within a gnat’s nostril of selling shares to cope with that. I ended up selling 900 May ‘22 CCs and margin issue went away.
After emergency maneuvers, I day traded 1015/1115 bcs and 800/700 bps, clawing back a few $k. Feeling secure again regardless of what the week ahead brings.
I thought about you folks today and sent good vibes. Hope it helped.
Hello, I am new to the options trading. Could someone help me to understand two questions?
1. Why is the intraday IV almost always anti-correlated with the stock price? See the picture below showing today's wild swing.
2. To bet TSLA rising significantly in the next two years, one may buy deep out-of-the-money call options to max the leverage. But the IV is too high right now, meaning it is not a good price for these calls?
Thanks!
1. Why is the intraday IV almost always anti-correlated with the stock price? See the picture below showing today's wild swing.
2. To bet TSLA rising significantly in the next two years, one may buy deep out-of-the-money call options to max the leverage. But the IV is too high right now, meaning it is not a good price for these calls?
Thanks!
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I foresee a short boost with the ER, and then a deflation back into macro's and the spring dip.
Shopify was event driven it seems - expanding to China with JD.com tie-up
I was doing OK with the IBKR margin nanny and rolled 1x Jan28 950/900 to Feb4 for a bit more margin.
but when we went back to 920 something weird happened and the IBKR nanny decided to buy back 1x Jan28 1000p. I sold the corresponding 1x Jan28 900p.
I still have 2x Jan28 1000/900bps. I'm deliberating rolling, or expecting a short uptick this week. I don't feel so sure about rolling 1000's into next week or later, unless Wednesday the Fed decides not to change anything. And even then, I expect a spring dip for $TSLA.
but when we went back to 920 something weird happened and the IBKR nanny decided to buy back 1x Jan28 1000p. I sold the corresponding 1x Jan28 900p.
I still have 2x Jan28 1000/900bps. I'm deliberating rolling, or expecting a short uptick this week. I don't feel so sure about rolling 1000's into next week or later, unless Wednesday the Fed decides not to change anything. And even then, I expect a spring dip for $TSLA.
Service announcement: please do not cross-post between the main investor thread and the options thread. More and more people have the tendency to post the same thing in both threads. Pick your audience (which, by the way, is often the same audience).
dc_h
Active Member
I doubt it, but would be nice if this rhymed with March 19, 2020, an amazing run from there, but you needed to roll one more week from there. Tesla was about $85 at that point.
Welcome
I’ll offering you my thoughts, but I’m not an expert. I have confidence in Tesla and expect TSLA to be $1,500 - $2,000 (or higher) in 2 years, but I feel buying far OTM calls is a bit of a gamble. The stock price has gyrated wildly over the past 6 months even as Tesla quietly and smoothly simply executed a profitable and growing business. so I find it hard to predict where we will be in a couple of years.
As an alternative, consider buying ITM leaps, that are less risky and can grow faster than the underlying.
IV is more closely related to the rate and magnitude of change in the stock price, not the stock price itself. It’s also related to market sentiment (fear/greed/uncertainty). I think it’s especially high this week because the market is spooked about future guidance of all companies in the face of inflation, Covid, supply chain, wavering demand, and saber rattling. I think those fears are overblown for Tesla. IV on short term options tends to fall after earnings reports.
Some folks forecast TSLA to reach $2,500 in 2 years. 1/2024 $1,500 calls are about $200. So if TSLA reaches $2,500 those calls could 5x. But if you simply bought shares you’d 2.5x with less risk.
You can evaluate other potential trades and risk, profit, and loss at optionsprofitcalculator.com using your own assumptions
The best time to buy long-dated call options is when the stock suddenly crashes due to reasons unrelated to the company itself - like this week. IV is much less important than the underlying stock price.
1/19/2024 $1,500 calls were
$60 in Sept ‘21 when TSLA was $730
$375 on 11/24 when TSLA was $1,243
$165 yesterday when TSLA touched $850
Damn, I should have bought those last fall!
corduroy
Active Member
From Market Chameleon this morning:
TSLA implied volatility (IV) is 82.2, which is in the 100% percentile rank. This means that 100% of the time the IV was lower in the last year than the current level. The current IV (82.2) is 23.4% above its 20 day moving average (66.7) indicating implied volatility is trending higher.
TSLA implied volatility (IV) is 82.2, which is in the 100% percentile rank. This means that 100% of the time the IV was lower in the last year than the current level. The current IV (82.2) is 23.4% above its 20 day moving average (66.7) indicating implied volatility is trending higher.
I sold some 1150CC yesterday from $2.75-4. I really hope we go green later today to sell some more.
bballshinobi
Member
The best time to buy long-dated call options is when the stock suddenly crashes due to reasons unrelated to the company itself - like this week. IV is much less important than the underlying stock price.
1/19/2024 $1,500 calls were
$60 in Sept ‘21 when TSLA was $730
$375 on 11/24 when TSLA was $1,243
$165 yesterday when TSLA touched $850
Damn, I should have bought those last fall!
I've always thought to risk-reward for LEAPs are better when the IV is low. I don't have the data to back it up, but IIRC, a similar LEAP (let's say 25% OTM with 1 year of theta) was 3-5 times more expensive during the height of IV last Feb-March compared to the trough of IV during May-June. A lot of people's LEAP also lost value during that time just because of IV crush.
Well max pain dropped to 1005, though at 1000 there are slightly more calls than puts:
I'm feeling better about holding until Thursday. My gut feeling (hopefully not the Tofu) is that the Fed meeting tomorrow will actually cause a relief rally in the Nasdaq in the afternoon regardless of what they say. Then with an earnings beat we jump an additional 10% AH on Wednesday. After that, I don't know if the SP will hold or drift down next week.
Μy biggest fear with that is the Fed meeting is such an obvious inflection point that everyone believes it and you know what happens then….
Actually better for the plan is that today is big time spanking so far and TSLA doing well in comparison.
InTheShadows
Active Member
Not sure if this has been mentioned here. I just got a message from fidelity that all BTC transactions less than 0.65 are commission free. 
Not sure if this has been mentioned here. I just got a message from fidelity that all BTC transactions less than 0.65 are commission free.
It's helps but Fidelity is a little behind the curve. Some brokerages have been offering stock and future options trades at $0 to close unconditionally for some time now. I still like Fidelity for stock portfolios and I think they charge $0 to close stocks too.
Not sure if this has been mentioned here. I just got a message from fidelity that all BTC transactions less than 0.65 are commission free.
Nice, IBKR Ireland still charges me $3.5 per contract....
ChefBoyardee
Member
We touched the bottom of the channel yesterday and bounced hard, now it's just 5.5% away. I wish I had more buying power to put to work here. A few trades:
840/820 for this week: 33% RoC
930/920 for March 18: 124% RoC (around 17% per week for 7 weeks)
Considering selling some of my other positions to make it happen
840/820 for this week: 33% RoC
930/920 for March 18: 124% RoC (around 17% per week for 7 weeks)
Considering selling some of my other positions to make it happen
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