corduroy
Active Member
I'd brush up your resume just in case. An 18% drop with 10 DTE in this market is definitely in the realm of possibility.
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Wiki Selling TSLA Options - Be the House
- Thread starter adiggs
- Start date
Wait, so you skipped the first step in the world of options of losing money on buying calls and then asking like an actor in a paid commercial, "There's got to be a better way?!"
I started 4 months ago with CSP in my trading because I had cash just sitting in the bank and CC in my IRA. CSP my goal was just to beat the bank's rate. I paused the CC on the IRA side because I converted shares to LEAPS and I'm just too worried about all the catalysts that could rocket the stock.
In my trading account, I moved from CSP to BPS because I used half the cash to buy some LEAPS and won't be using margin.
Using OTM % guides is a good idea and I try to stay above 15%, 25% if premiums are high enough.
Yeah, you're not wrong..I'd brush up your resume just in case. An 18% drop with 10 DTE in this market is definitely in the realm of possibility.
I think that was more procedural ("official notification" e-mail vs. a trade notification), since they clearly said that "funds and shares that result from exercises are made available immediately during market hours".
Much like how buying/selling stocks permits you to immediately use the funds/stocks to make other follow-up trades, even though the trades take 2 days to "settle".
This is the most detailed exercise/assignment timing information I can find. It's from IBKR.
The part that puzzles me is that a brokerage seemingly by rule cannot be aware of an assignment until the clearing process happens after hours. In fact they are not even told until the next morning.
The part that puzzles me is that a brokerage seemingly by rule cannot be aware of an assignment until the clearing process happens after hours. In fact they are not even told until the next morning.
so, i am back 2 weeks later... acct growth over the last 4 weeks is ~26.69% on that grab-and-go mode, dunno if that is low or high but i am just happy to get whatever i can
today i closed all 2/18 BPS at ~73%; tomorrow maybe STO 2/25 -p820/+p720 at the dip... why 820?
- i think 200SMA=827 as support is good enough - we only breached it once in the last 6 months
- i have 150SMA as backup support #1
- i have lowerBB as backup support #2
- unlikely sp will cross 3 lines in 8 DTE (there's time to escape if that happens)
This is the most detailed exercise/assignment timing information I can find. It's from IBKR.
The part that puzzles me is that a brokerage seemingly by rule cannot be aware of an assignment until the clearing process happens after hours. In fact they are not even told until the next morning.
I quoted an older post of mine above with a link to a source that seems to back up the "no assignment during trading hours". I'm definitely not saying that it hasn't happened to people here, but would be interested to know the actual mechanics as it has some very relevant implications. Maybe when your broker assigns you midday, it's actually from "the night before"? Something along the lines of the following scenario:I found this from the Options Industry Council website, which seems to be a legit a source as there is on this. (They are basically an education arm of the OCC):
"Assignments are determined based on net positions after the close of the market each day. Therefore, if you bought back your short call, you no longer have a short position at the end of the day and no possibility of assignment."
Options Assignment
Options assignment FAQs answered here. Learn about assignment timing, in-the-money calls, and your obligations.www.optionseducation.org
- I sell a call on Monday.
- Tuesday, someone, somewhere exercises the same call
- Tuesday evening, the OCC clears the exercised call and informs brokers that they need to assign
- Wednesday mid-day, the broker gets around to assigning one of their clients (me).
- Wednesday mid-day, I get an assignment notification and my shares disappear.
Does that seem reasonable? For all intents and purposes, it means that you can be assigned by your broker at anytime, even though the clearing process doesn't happen at the same time. This is all guesswork on my part, so YMMV.
I bought my 18/2 950CCs for a 50% profit on the dip this morning and on the spike I tried to sell 25/2 1000CCs but my brockerage platform put the order on hold to review the order as it had not registered yet that I purchased the 950 CCs already. I set a sell order at 5.20. By the time it changed from waiting to open, the value went down to 4.50 and then had to chase down until it filled at 3.85 just before it went back up, I should have just left the $5.20 and went to do something else instead of chasing. It would have been nice to have a +25% at the end of the day instead -25%. I have to be more patient.What the heck just happened?
Massive volume spike and reversal
Rolled my -p925 18/2 to -p920 25/2 for a 8$ credit when we hit the low today because I thought we were going to 857 then 827. I listened too much to TA analysis videos calling for a bear market. I lost contact with reality. I am becoming a permabear.
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Don’t forget the mid-BB is actually the 1st resistance, now that we’ve closed above it two days on a row. BTW, a couple more days of trading like this and those upper and lower BB will compress below +/-5% SP. Some breakout will happen, just don’t know which way. Anticipation………
This chasing back and forth - sometimes it works out for a better credit than I would otherwise have gotten.
Mostly, for me, I end up putting in extra effort. Achieve a worse fill price. And I get to wait for the privilege.
As a result, as I return to my CSP and CC roots, I find myself entering most of my entry and exit orders as market orders. My thinking is that once I've decided I want in, then I'd rather just be in. I'll lose pennies and dimes on the fill with some regularity, but I also won't lose $$ waiting on a fill that doesn't happen, and I won't spend time waiting that I'd rather be spending here on TMC writing books
Same thing on the exit side - when I've decided that I'm done with the position, then be done.
The big deal here is that I do check on the bid ask spread. For the near term options I'm trading it is frequently .40 or less (.20 on either side of the midpoint). I can usually get the midpoint, but sometimes not. The market order doesn't always fill at the worst price though. And I've had situations where the share price was moving so fast that the fill was significantly better than I expected.
If the bid/ask spread is wide, such as high DTE options or far ITM / OTM options (infrequent trades), then those definitely go in as limit orders. When in doubt - limit orders. And I only do limit orders for start of day / end of day orders.
Not advice of course - just another way to look at it.
Knightshade
Well-Known Member
InTheShadows
Active Member
Does anyone have any insight on why I’m having problems rolling my BPS -995/795’s out each week for even or a small credit despite us being $30 over the mid point? Even near the highs today I was still looking at a $2 debit to roll them out.
The only thing that strikes me as odd about that scenario is that it leaves a gap between assignment notification and assignment during which positions can be closed. Let’s say you are the only person at your brokerage with the short option matching the exercise. If the OCC notified the broker but they waited until midday to handle the assignment, you could close the position beforehand and then what? Who would be on the hook?
Probably differences in IV.
chiller
Member
Hmm, what broker are you with? Does it show you the spread? Looked up the prices now and it looks like it should be possible with a credit:
When in doubt, look farther out
2/25 -> 3/25 995/795 nets $9 per share
$74 -> $83
InTheShadows
Active Member
Yea just looking at them it does, my spread sheet said I should have been able to roll for $2 credit, couldn’t even get them filled for even. I ran into this two weeks ago with some $300 wide spreads I had too.
If tomorrow am is the same, I’ll look at kicking them out to 2/25. (EDIT: I mean 3/4) Hopefully we are even or green tomorrow am.
InTheShadows
Active Member
Even now it’s showing a midpoint of $2.50 debit. When the bid is higher than the ask, then I can get a credit.
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Patience is very hard. That put roll is one that I definitely would have taken for an $8 credit.
Intraday price action, by design, is trying to hurt the most participants possible. TA is much more about closing prices than intraday lows and highs.
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