Wiki Selling TSLA Options - Be the House

[intelligator]

Rolled 1/28 890/690 to 2/4 same strike, had work commit to otherwise plan better, small credit
Rolled 1/28 6x 900/800 to 12/16 3x 900/750 , reducing margin some, small debit mostly canceled out by above small credit

Doesn't seem t be getting better today. As we trend down, these are the 2/4 spreads that I most definitely have to move. Considering had I acted yesterday or day before on what I had to move today, thinking action today is better than Monday. BTC is too pricey. Looking to go down and far out, trying to free margin where I can but that ties up margin as well.

1050/850
1000/875
950/810
975/850
960/850

Wait the weekend or work them out today?

 

[euro2012]

STO 2/4 BPS -p700/+p600, delta=8, Prob OTM=90%

I assume your move to all cash has been helpful through all this turmoil? Do you still think ‘that is the way’ if one is to continue being the house?

 

[FS_FRA]

@intelligator I think it depends on how the rest of the session goes. Based on my experience today, I would try to solve any issues ASAP, mainly to have a somewhat relaxed weekend.

 

[stealthyc]

Thanks, very informative.
So what happens if you're over leveraged and get early assigned?

Margin call

 

[samppa]

Margin call

or in IBKR case, insta-liquidation, I'd guess..

 

[Yoona]

I assume your move to all cash has been helpful through all this turmoil? Do you still think ‘that is the way’ if one is to continue being the house?

In words:
Best decision ever to cash out at SP ~1150. All positions are cash-secured so there is no margin usage that can wipe out my account. The ongoing lesson is how to maintain discipline in limiting the number of contracts open. I only do BPS/BCS; not confident in doing LEAPS.

In picture:

 

[LightngMcQueen]

Just finished my day at work, looked at the stock price while trading in my Model Y with steering problem for a Herz Nissan Rogue rental. It felt like the world collapsed around me. Had 10% margin left and tomorrow will be margin called like never. Please share your thoughts on how to optimize my margin situation. Already got ChefBoyardee tip n tricks and that was my order of thought, let me know if you’d change the order or do something different.


I have 10x 18/2/2022 -p925 with 325k margin impairment
...
On 10/1/2022, I filled the transfer form and I am transferring 500k in stock from another account to increase my margin power. I have some 70k cash in personnal accounts that was intended to buy kid investments REEE.

1. You may actually be lucky
Not sure if I do math right but it looks like you have only 30% margin requirements on TSLA. IBKR and Questrade have concentration rules which under some conditions can lift effective margin requirements above 50%. I do not understand exact concentration rules though, only TD publishes theirs.

2. You can try making lemonade.
Did you consider taking a loss in your account and buying equivalent delta on margin in kids accounts ? This would transfer future capital gain.

This might make sense if your kids have margin accounts backed by loan from you, but does not work with transfer to spouse or transfer to/from corp:

Superficial loss - Canada.ca

Superficial loss

www.canada.ca

Transfering to RESP makes little sense because RESP income is taxed as income (2x cap gain rate)

 

[LightngMcQueen]

or in IBKR case, insta-liquidation, I'd guess..

Did anyone get chance to "test" IBKR Liquidate Last behaviour?

I want my liquidated position to be reinstated. | Knowledge Base

ibkr.info

I have set it on the positions with highest capital gain to maximize tax efficiency of potential liquidation.

Call me a chicken but I am afraid running the real life test. I wonder if anyone else already had.

 

[LightngMcQueen]

Got a margin warning from IBKR this morning.

Apologies if it is obvious:

You can and should setup your own IBKR Margin Cushion warnings in the mobile app (or TWS) under Alerts, I got increasingly dramatic emails send to myself all the way down from 25% to 10%. I list the account nickname in the alert name, which becomes the email title, so I can stay on top of it. Web interface does not have this feature, the alerts set up on the web are a different beast.

Margin Cushion is Excess Liquidity / Net Liquidation Value as both nominator and denominator decrease during downturn the drop might be a bit slower than the drop in the stock price.

 

[FS_FRA]

Apologies if it is obvious:

You can and should setup your own IBKR Margin Cushion warnings in the mobile app (or TWS) under Alerts, I got increasingly dramatic emails send to myself all the way down from 25% to 10%. I list the account nickname in the alert name, which becomes the email title, so I can stay on top of it. Web interface does not have this feature, the alerts set up on the web are a different beast.

Margin Cushion is Excess Liquidity / Net Liquidation Value as both nominator and denominator decrease during downturn the drop might be a bit slower than then the drop in stock price.

This was part of my learning today. It was not obvious, but now I’ve laddered emails to alert me.

 

[wooter]

Is my shitput literally going to end ITM today?! Bought a 28/01 830p for margin.

 

[M3Rider]

Thinking about a creative way to wheel my open Put's that are $1120's for next week.
Take assignment - immediately STO January 2024 $2000 calls - Immediate $10k each and an additional $88k each in 2024 for LT gains!
Yay for being creative!

This is not bad at all, assuming 52 weeks/year, 104 weeks, at close to 1/week premium this is a normal lower-risk, but not low weekly premium. For next week that’d be 1025 strike, which I’m not comfortable giving up my shares at if the market suddenly reversed.

If these are not core shares, selling them at 2000 if we hit say 3000 in 2 years is not a bad deal either. Will have a chance to roll too in that case.

 

[OrthoSurg]

This morning I had 7k available margin left.
Survived one more week without getting margin call.
At least we are up 2% at the close. Nasdaq seems to be back on track.
500k arriving in my account next week.
I feel bullish as long at World War III doesn’t get started by Putin this week end.

Sold 4/2 24x 1055 CCs this morning, they were +50% during the drop of the day, should have closed them. Hope they get ITM next week. For the sake of all of us.

 

[InTheShadows]

Brutal. Stats for the week.

Total weekly portfolio trading losses 3.76%
Total portfolio value this week -31.62%

And I kicked a lot of red out to next week. So the trading losses next week could double this weeks.

I need to see high 800’s to low 900’s sometime next week to have a hope of managing some more positions.

I have significant 910/-1100 (EDIT that’s -1100 not -1200) position next week that I’m hoping we can get above the long leg so I can kick that can put to august.

We post our winners, gotta post the losers too.

My total portfolio value is back to the week ending Oct 1 now.

This weekend will be some reflection on my current strategies.

On the other hand the eod rally made my $300 margin call I got this am go away.

 

[Bunky]

Welp, again Fidelity hasn't given me the chance to resolve things myself. They liquidated some shares and sold puts to cover the house call that was in place for all of an hour or so. Obviously the share price then rallied which would have eased the majority of the problem. I know they have these risk controls in place and ultimately its my fault but I really wasn't too overextended and I had nothing expiring this week. They are way too hasty to trade on my behalf and i'm tired of them f'ing me over. I'm going to be changing brokerage after this one.

 

[OrthoSurg]

Welp, again Fidelity hasn't given me the chance to resolve things myself. They liquidated some shares and sold puts to cover the house call that was in place for all of an hour or so. Obviously the share price then rallied which would have eased the majority of the problem. I know they have these risk controls in place and ultimately its my fault but I really wasn't too overextended and I had nothing expiring this week. They are way too hasty to trade on my behalf and i'm tired of them f'ing me over. I'm going to be changing brokerage after this one.

My broker only update margin requirement at the end of the trading day. It has its avantages it seems. They never bother me during the day.

 

[wooter]

Is my shitput literally going to end ITM today?! Bought a 28/01 830p for margin.

OK, I've learned about the 4:30pm cutoff.

Around 4:38pm IBKR closed off a number of positions, leaving me with a Feb04 +900p and a Feb04 -790p, a ****ing bear put. It closed the short leg of one and the ****ing long leg of another to get into this *sugar*. Any direction the stock goes, it rips my margin because lower SP = lower margin, higher SP = lower margin. This is going to be good.

 

[Blue horseshoe]

Welp, again Fidelity hasn't given me the chance to resolve things myself. They liquidated some shares and sold puts to cover the house call that was in place for all of an hour or so. Obviously the share price then rallied which would have eased the majority of the problem. I know they have these risk controls in place and ultimately its my fault but I really wasn't too overextended and I had nothing expiring this week. They are way too hasty to trade on my behalf and i'm tired of them f'ing me over. I'm going to be changing brokerage after this one.

You got a margin call. You were overextended. This is important because if you just blame the brokerage you're going to trade the same way and be faced with a margin call again in all likelihood.

Being right on the direction and timing of the stock price is only half the battle. Equally, if not more important, is portfolio/risk management. TSLA is down about 30% from its high including Thursday's ~10% drop. We are likely to encounter this volatility again and you should spread out your trades and balance your portfolio risk to weather such a downturn.

Edit:
I say this as someone who made these mistakes and dealt with several margin calls last year including a phone call giving me 15 minutes to fix a 600k imbalance before the broker initiated partial liquidation of positions.

 

[stealthyc]

OK, I've learned about the 4:30pm cutoff.

Around 4:38pm IBKR closed off a number of positions, leaving me with a Feb04 -900p and a Feb04 +790p, a ****ing bear put. It closed the short leg of one and the ****ing long leg of another to get into this *sugar*. Any direction the stock goes, it rips my margin because lower SP = lower margin, higher SP = lower margin. This is going to be good.

+790p/-900p is a bull put spread...

 

[wooter]

+790p/-900p is a bull put spread...

I wish it was. I mistyped in my post and corrected. It's a bear put spread.

In the end this was avoidable, obviously, but my account window looked good to go with plenty of margin so I wasn't alarmed. But this margin was based on a Feb04 +800p and Jan28 +830p.