Zhelko Dimic
Careful bull
Sorry I didn't see if you posted anything in mod capacity, apparently I've blocked you few years back.
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Wiki Selling TSLA Options - Be the House
- Thread starter adiggs
- Start date
Any non-advice would be appreciated.
I saved enough cash to continue rolling my ITM BPS, until now. They are still ITM and I have run out of ability to roll them any further.
The only options I have come up with are as follows:
1. close the positions and incur the total loss.
2. sell some core shares (shares i was never supposed to sell) in another account to fund further rolls. I would like to keep the BPS alive, however i hesitate doing this as I have limited shares and not in the position to be able to roll forever. Unless we get back in the 1050+ range in 3-4 weeks, I'll be back to option #1 with less shares.
3. anything else i should be considering?
I saved enough cash to continue rolling my ITM BPS, until now. They are still ITM and I have run out of ability to roll them any further.
The only options I have come up with are as follows:
1. close the positions and incur the total loss.
2. sell some core shares (shares i was never supposed to sell) in another account to fund further rolls. I would like to keep the BPS alive, however i hesitate doing this as I have limited shares and not in the position to be able to roll forever. Unless we get back in the 1050+ range in 3-4 weeks, I'll be back to option #1 with less shares.
3. anything else i should be considering?
jeewee3000
Active Member
If you roll once more, go all out to 2023 or even 2024 so the BPS will be pretty much guaranteed OTM at expiration. Because every roll when underwater takes either debit or extra capital as margin. Jan 2024 we should be over 1050 comfortably I'd say. If not, I'm f-edAny non-advice would be appreciated.
I saved enough cash to continue rolling my ITM BPS, until now. They are still ITM and I have run out of ability to roll them any further.
The only options I have come up with are as follows:
1. close the positions and incur the total loss.
2. sell some core shares (shares i was never supposed to sell) in another account to fund further rolls. I would like to keep the BPS alive, however i hesitate doing this as I have limited shares and not in the position to be able to roll forever. Unless we get back in the 1050+ range in 3-4 weeks, I'll be back to option #1 with less shares.
3. anything else i should be considering?
Have you looked at rolling for a debit and selling calls at the same expiration to offset the cost and margin ?Any non-advice would be appreciated.
I saved enough cash to continue rolling my ITM BPS, until now. They are still ITM and I have run out of ability to roll them any further.
The only options I have come up with are as follows:
1. close the positions and incur the total loss.
2. sell some core shares (shares i was never supposed to sell) in another account to fund further rolls. I would like to keep the BPS alive, however i hesitate doing this as I have limited shares and not in the position to be able to roll forever. Unless we get back in the 1050+ range in 3-4 weeks, I'll be back to option #1 with less shares.
3. anything else i should be considering?
Any non-advice would be appreciated.
I saved enough cash to continue rolling my ITM BPS, until now. They are still ITM and I have run out of ability to roll them any further.
The only options I have come up with are as follows:
1. close the positions and incur the total loss.
2. sell some core shares (shares i was never supposed to sell) in another account to fund further rolls. I would like to keep the BPS alive, however i hesitate doing this as I have limited shares and not in the position to be able to roll forever. Unless we get back in the 1050+ range in 3-4 weeks, I'll be back to option #1 with less shares.
3. anything else i should be considering?
Can you flip any of the puts into a call to get you breathing room?
scubastevo80
Member
Is your lower strike 1050? I was in a similar situation in early January. I modeled the cost of a turnaround for options and also for rolling way out. We ended up taking max loss on our 1050s to avoid throwing more good money at bad, and rolled our 950s up and out to 980s in Jan'23 for a decent credit. Given the expectation of rates rising throughout the balance of the year and further uncertainty, I personally wouldn't roll 1050s up and out unless you're confident we end the year of 1100. Perhaps some of the other smarter guys can weigh in. I tend to look at these as simplistically as I was killing it for 3 months and then go massacred in January when I got too aggressive and held on too long.Any non-advice would be appreciated.
I saved enough cash to continue rolling my ITM BPS, until now. They are still ITM and I have run out of ability to roll them any further.
The only options I have come up with are as follows:
1. close the positions and incur the total loss.
2. sell some core shares (shares i was never supposed to sell) in another account to fund further rolls. I would like to keep the BPS alive, however i hesitate doing this as I have limited shares and not in the position to be able to roll forever. Unless we get back in the 1050+ range in 3-4 weeks, I'll be back to option #1 with less shares.
3. anything else i should be considering?
"hard"? It's not a question of difficulty, it's just a question of what you're willing to give up for the roll. Here's what happened with my wife's non-margin account:
9/27/2021 - sold 11/05 860cc (TSLA was around 750 at that time - not sure what I was thinking then!)
10/26/2021 - rolled them into 05/20/2022 970cc (didn't need income from this account, so simply rolled for strike improvement)
1/21/2022 - rolled the now OTM 970c into 6/16/2023 1500cc (rolled too early obviously).
1/28/2022 - applied for margin and flipped half the 1500cc into 12/2022 800p
So to answer your question, I was willing to give up over a year's worth of income to improve the strike from 860 to 1500. Luckily macros opened up new opportunities to fix it.
Spreads were some of the most lucrative investments, but they carry a HUGE amount of risk to go along with it!
Any non-advice would be appreciated.
I saved enough cash to continue rolling my ITM BPS, until now. They are still ITM and I have run out of ability to roll them any further.
The only options I have come up with are as follows:
1. close the positions and incur the total loss.
2. sell some core shares (shares i was never supposed to sell) in another account to fund further rolls. I would like to keep the BPS alive, however i hesitate doing this as I have limited shares and not in the position to be able to roll forever. Unless we get back in the 1050+ range in 3-4 weeks, I'll be back to option #1 with less shares.
3. anything else i should be considering?
I don't like your option 2, it sounds like digging a deeper hole.. if you're ready to sell shares, why not sell aggressive calls against them?
Also could look at rolling really far out, like a year or more..
It would help to know what they are (and how wide). I rolled mine to December because I'm pretty sure we will be over 1100 by then. Definitely do not do #2.Any non-advice would be appreciated.
I saved enough cash to continue rolling my ITM BPS, until now. They are still ITM and I have run out of ability to roll them any further.
The only options I have come up with are as follows:
1. close the positions and incur the total loss.
2. sell some core shares (shares i was never supposed to sell) in another account to fund further rolls. I would like to keep the BPS alive, however i hesitate doing this as I have limited shares and not in the position to be able to roll forever. Unless we get back in the 1050+ range in 3-4 weeks, I'll be back to option #1 with less shares.
3. anything else i should be considering?
This depends on many factors like what the strike price was at. I had 980 cc before the hertz announcement in my IRA that I rolled for 4-5 weeks. Saved it. I was way out of money with my BCS at 1050 and 1100 in my trading account that I had to flip to puts. Tons of paper loss. I had the tools to deal with the spike and the dip with Elon’s tax selling. As long as you are way out of money you can improve by rolling. If you are close or at the money then you pry for a favorable large move.
Don’t tell me I’ll have to roll my -p1500 20/1/2023 puts because of Putin!
Over the weekend, with my 850/550 put spreads almost in the money and the Ukraine news, I was hoping for an immediate close this morning for roughly no change from Friday. I got that and took the loss on this position. But this one was more like a 1 week gain sort of loss. Had I waited I'd have been able to close for an outright gain instead of the loss. Zero concern about that though - I was expecting to wake up to an 810 ($50 drop) share price, so flat to Friday was party time for me (and a really good indication I picked that position poorly).
I've been doing some math around my portfolio and income needs and realized that although I like the extra money I earn using put spreads I also don't need it. Thus - no new put spreads for me for awhile. I don't expect that to be permanent by any means, but I also expect I'll return to something like 2x leverage on whatever width spreads gets me to a cheap insurance put. So cash secured puts are what I'll be doing for now (though not today - waiting for a big leg down, so probably tomorrow
).
EDIT to add: You know its a good trade when stomach is churning before hand, and you can go back to bed for 3h and sleep through a big chunk of the trading day afterwards.
I did manage to catch the top with some cc sales this morning. Pretty awesome! I've got shares that need to sell in the next month or 2 (taxes) so I'm getting really aggressive with those call sales. Today was 890s when shares were 892 or so.
I've also got some June '22 long calls that are way too close in time and too high leverage for the new me - same deal with those where I'm going for really aggressive cc's. Opened more 890s against these calls, but not all. Watched the shares go down and opened the rest at 870.
Heck - I expect I'll see some ITM cc sales coming my way.
There's a lesson there regarding the 870s. I entered a limit order on those that was a few dimes above the price at the time and left to do some other stuff expecting them to fill at some point during the morning. Came back later and they hadn't filled - finally got the position opened (still ATM) as 870s. A benefit of selling cc and naked puts is that market orders are available, and I find myself doing a lot of those these days. When the spread is .20 (as the 890s were this morning) the market order frequently fills at better than the bottom and I get the position immediately. Playing for dimes this morning I missed out on $8 worth of premium. I got back that premium using 870s strike calls, so it really cost me $20 on the strike.
More and more - once I decide to be in or out of a position I'll keep things simple and fast via market orders. Those aren't available for spreads.
Regardless all of my cc positions are backed by stuff I want to sell anyway and I think that I can get a better overall result by selling aggressive cc each week vs. selling now.
My portfolio target is share backed cc and cash secured puts. When the times are right I'll take on as much as 2x leverage using max duration 1/2 price calls and wide put spreads limited to 2x the number of csp positions. But my income needs are modest relative to my portfolio and as good as last year was, this year has been the opposite. Quite the expensive lesson for me.
I've been doing some math around my portfolio and income needs and realized that although I like the extra money I earn using put spreads I also don't need it. Thus - no new put spreads for me for awhile. I don't expect that to be permanent by any means, but I also expect I'll return to something like 2x leverage on whatever width spreads gets me to a cheap insurance put. So cash secured puts are what I'll be doing for now (though not today - waiting for a big leg down, so probably tomorrow
).EDIT to add: You know its a good trade when stomach is churning before hand, and you can go back to bed for 3h and sleep through a big chunk of the trading day afterwards.
I did manage to catch the top with some cc sales this morning. Pretty awesome! I've got shares that need to sell in the next month or 2 (taxes) so I'm getting really aggressive with those call sales. Today was 890s when shares were 892 or so.
I've also got some June '22 long calls that are way too close in time and too high leverage for the new me - same deal with those where I'm going for really aggressive cc's. Opened more 890s against these calls, but not all. Watched the shares go down and opened the rest at 870.
Heck - I expect I'll see some ITM cc sales coming my way.
There's a lesson there regarding the 870s. I entered a limit order on those that was a few dimes above the price at the time and left to do some other stuff expecting them to fill at some point during the morning. Came back later and they hadn't filled - finally got the position opened (still ATM) as 870s. A benefit of selling cc and naked puts is that market orders are available, and I find myself doing a lot of those these days. When the spread is .20 (as the 890s were this morning) the market order frequently fills at better than the bottom and I get the position immediately. Playing for dimes this morning I missed out on $8 worth of premium. I got back that premium using 870s strike calls, so it really cost me $20 on the strike.
More and more - once I decide to be in or out of a position I'll keep things simple and fast via market orders. Those aren't available for spreads.
Regardless all of my cc positions are backed by stuff I want to sell anyway and I think that I can get a better overall result by selling aggressive cc each week vs. selling now.
My portfolio target is share backed cc and cash secured puts. When the times are right I'll take on as much as 2x leverage using max duration 1/2 price calls and wide put spreads limited to 2x the number of csp positions. But my income needs are modest relative to my portfolio and as good as last year was, this year has been the opposite. Quite the expensive lesson for me.
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The larger logic in these positions is that I've got a pretty strong 'flat to down' bias in the shares for I don't know how long. The Ukraine thing - I really don't have an idea how to think about it, except that if Russia sends 100k troops over the border in a shooting war, the world, world economy, and world stock markets aren't going to like that. At least in the short term.
What I do see is the inflation and market concerns around interest rates and liquidity (read: easy money). With inflation finally responding to all of the money floating around, I see a steady stream of high inflation readings, increasing interest rates, and the end to the Fed monthly bond purchases (finally). The one thing I don't see coming is the Fed starting to sell off any of those bonds. Having that huge buyer stepping out of the market is going to make it more expensive and harder for any company that needs to borrow money (thankfully this doesn't include Tesla).
My conclusion and how I'm acting - we're in a state of dynamic balance with the Tesla share price. The macro picture is in the driver's seat and will stay there for a few months minimum. I can be convinced that we have a year or 2 of this as well.
However the Tesla story (news, execution, technology, demand) is fully intact and I see no evidence that will be changing, leading to buyers stepping in anytime people aren't in a 'sell everything' mood and the share price is too low.
I've seen the shares bounce off the support at 850 a few times now. I'm starting to think that is a support I can work with and possibly the bottom of a trading range. On the high side I have a hard time seeing >1000 because of the macro situation (too many sellers showing up at such a generous price). For the moment I'm thinking in terms of an 850 - 1000 trading range. If we go below 850 then I'd probably be thinking 700 - 850. If we go above then probably 1000-1200, though I consider this unlikely and/or unsustainable.
What I'm really concerned about on the macro side is something more akin to an economic meltdown. Something closer to 50% down for Tesla (600 share price, down from the 1200 high). I do realize that a 50% market down doesn't necessarily mean a 50% down move for Tesla. On such a big drop I expect Tesla to perform better due to how good the Tesla story is, and how it is unaffected by everything going on.
I am encouraged by the high employment and difficulty finding people to hire - if unemployment was a problem, then I'd start worrying about an even bigger market move down.
The other thing I have started thinking about is what a Tesla quarterly 'miss' would do to the share price, and more importantly, my ability to be retired. I figure that an actual miss, as opposed to Wall Street engineering a miss, will create an immediate down day. Maybe even as bad as the Facebook day, and I want to be positioned to be ok with that happening (I really haven't been - too much leverage in use).
I have a better understanding of why the big Facebook impact - it was a direct shot to the FB story. That makes such a Tesla event unlikely in my mind, but it doesn't hurt me to be prepared for that sort of event, and it can hurt me badly to not be prepared.
End result for me - selling aggressive cc all the time (next little while at least), conservative csp on strong down days, and a realization that at my real income want / need, I can be really really conservative on both sides and that's where I'm headed.
What I do see is the inflation and market concerns around interest rates and liquidity (read: easy money). With inflation finally responding to all of the money floating around, I see a steady stream of high inflation readings, increasing interest rates, and the end to the Fed monthly bond purchases (finally). The one thing I don't see coming is the Fed starting to sell off any of those bonds. Having that huge buyer stepping out of the market is going to make it more expensive and harder for any company that needs to borrow money (thankfully this doesn't include Tesla).
My conclusion and how I'm acting - we're in a state of dynamic balance with the Tesla share price. The macro picture is in the driver's seat and will stay there for a few months minimum. I can be convinced that we have a year or 2 of this as well.
However the Tesla story (news, execution, technology, demand) is fully intact and I see no evidence that will be changing, leading to buyers stepping in anytime people aren't in a 'sell everything' mood and the share price is too low.
I've seen the shares bounce off the support at 850 a few times now. I'm starting to think that is a support I can work with and possibly the bottom of a trading range. On the high side I have a hard time seeing >1000 because of the macro situation (too many sellers showing up at such a generous price). For the moment I'm thinking in terms of an 850 - 1000 trading range. If we go below 850 then I'd probably be thinking 700 - 850. If we go above then probably 1000-1200, though I consider this unlikely and/or unsustainable.
What I'm really concerned about on the macro side is something more akin to an economic meltdown. Something closer to 50% down for Tesla (600 share price, down from the 1200 high). I do realize that a 50% market down doesn't necessarily mean a 50% down move for Tesla. On such a big drop I expect Tesla to perform better due to how good the Tesla story is, and how it is unaffected by everything going on.
I am encouraged by the high employment and difficulty finding people to hire - if unemployment was a problem, then I'd start worrying about an even bigger market move down.
The other thing I have started thinking about is what a Tesla quarterly 'miss' would do to the share price, and more importantly, my ability to be retired. I figure that an actual miss, as opposed to Wall Street engineering a miss, will create an immediate down day. Maybe even as bad as the Facebook day, and I want to be positioned to be ok with that happening (I really haven't been - too much leverage in use).
I have a better understanding of why the big Facebook impact - it was a direct shot to the FB story. That makes such a Tesla event unlikely in my mind, but it doesn't hurt me to be prepared for that sort of event, and it can hurt me badly to not be prepared.
End result for me - selling aggressive cc all the time (next little while at least), conservative csp on strong down days, and a realization that at my real income want / need, I can be really really conservative on both sides and that's where I'm headed.
I have been thinking about protecting my portfolio somewhat and I am unsure on how to do it incase we keep going down. I feel the same about the possibility of a bad quarter or just barely meeting expectations and I don't think the market would be kind to Tesla if something like that happens. The Tesla story has not change at all and I am as bullish about Tesla as ever but I am not feeling very positive right now because all the macro and war news. Here is somethings that I thought about possibly doing:
-I thought about selling something like a Jan 23 1275-1300 for essentially a 10% protection and I think that is a decent price for my shares if we trend up.
-I have been thinking about getting protective puts but I am not sure what strikes and expirations make sense and how many to get. Is it better to get something like SPY puts?
-I have some options that are down a good bit for Jan 23 and I really want to get rid of them but I am waiting for a good day and the only catalyst that I see that might move the stock is Texas and Berlin opening and Tesla becoming an investment grade stock. If that doesn't do it and moves the stock I think I have to close my options. The Jan 24 I am not that worried about; if were at around $1000 I would be golden.
any non advise?
One bit of non-advice, and something I've been thinking about.... cash.
Cash doesn't go down (meaningfully) in a down market. Inflation might get it (a really little, little bit).
Over the last 10 years and on a save-for-retirement plan my answer was own shares with no margin. Up around 160x from the original shares, still 10x from some more recent shares. My own belief is 10x from here by 2030. Whether that is next year or 2030 I can't say. My over / under is 2025 though. So depending on where you are, this is another (my belief) safe and macro/war resistant approach.
Which doesn't provide even a guess at what to do with a mixed option portfolio.
Got 10x -p925 18/2 I will have to manage soon. I was wondering what is the rational of everyone here.
1) Roll them 1 week out for an additional credit with the same strike price
2) Roll then 1 week without additional credit for an improved strike price
3) Roll then 1 month out for an additional credit and improved strike price
What is your not advice on how to manage expiring underwater positions in a bear market with extreme volatility? I am new to this. I seem to be becoming more newbie every week that goes on actually.
1) Roll them 1 week out for an additional credit with the same strike price
2) Roll then 1 week without additional credit for an improved strike price
3) Roll then 1 month out for an additional credit and improved strike price
What is your not advice on how to manage expiring underwater positions in a bear market with extreme volatility? I am new to this. I seem to be becoming more newbie every week that goes on actually.
If your outlook is bearish, #1 seems not preferable. I would want to lower the strike price by rolling, preferably at no cost.
I think the best time to roll out 1+ month is when the stock moves strongly in your favor. I am rolling a bps 1 week at a time waiting for a good opportunity to roll down and out to greater safety.
I would go for the max strike improvement on minimum time. And by "I", I mean what I would do in a similar situation.
My guess is that the 2 week roll won't get 2x the strike improvement as the 1 week roll. If its close then the benefit is you get as much of a strike improvement as you can ahead of a further drop. As I think of it you have locked in the quality of this moment in time for the roll for the extra week - something you'll be appreciative of if you are even further ITM for next week's roll. The 1 week roll has a chance at resolution sooner and has faster time decay.
I choose the max strike improvement to minimize the possibility of a losing position and not worrying about the weeks where I have minimal income, in order to maximize my chance of keeping the strike in contact with the shares.
Then again my target income is reached using the minimal net credit. As long as those net credits are ~$2 on average then I'm getting my income target while minimizing risk by improving the strike as much as possible. So I don't even take week's off earning income by rolling for max strike improvement. Any more than target income is greed; more risk to earn more, with the possibility of a bigger loss.
That's my rationale.
Looks like the uncertainty regarding ukraine is easing up. Putin has retreated some of the forces, and russian military has said that these troops have completed their mission.
This should bode well for the markets, I hope. Premarket is at 903 now, so up around 3% from yesterdays close.
This should bode well for the markets, I hope. Premarket is at 903 now, so up around 3% from yesterdays close.
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