How many Investor’s liquidated their TSLA holding to sell and buy options only during this volatile market? Does it have a significant impact on the TSLA share price. TSLA being 50% of the overall option market probably lured a lot of people in.
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As sh price continues to drop your cc premium shrinks considerably. If you're not using margin then you simply wait it out until the sh price hits your cc strike and you're back to selling puts. Pain is increased with margin utilization(newbie thinking of trying out the Wheel for the first time)
can someone pls confirm? assume static prices to keep it simple, TIA!
STO 3/11 -p750, $40 credit
if sp >=750, expire worthless
else
- forced to buy shares @750, cost basis 710
- STO CC 3/18 -c900, $10 credit 5 DTE
- "keep getting $10 weekly" until sp >=900
if sp suddenly moons to 1000, so what? just repeat the wheel
if sp drops to 650, STO CC -c710 at the very minimum
what am i missing?
If you're forced to buy @ 750, the STO on 3/18 -c900 will likely not be $10 credit. Maybe a good proxy is looking at 3/4 -c900 (since current SP is at 750), which is going for roughly $2.30.(newbie thinking of trying out the Wheel for the first time)
can someone pls confirm? assume static prices to keep it simple, TIA!
STO 3/11 -p750, $40 credit
if sp >=750, expire worthless
else
- forced to buy shares @750, cost basis 710; if sp=650, roll the 750 early
- STO CC 3/18 -c900, $10 credit 5 DTE
- "keep getting $10 weekly" until sp >=900
if sp suddenly moons to 1000, so what? just repeat the wheel
if sp drops to 650, STO CC -c710 at the very minimum
what am i missing?
I don't recall folks saying 2-5% weekly returns was was safe, the range was more 1-1.5% that could maaaaaybe be stretched to 2% on occasion.It appears that when something is too good to be true it usually is. I am sure many people, including me are burned badly after getting introduced to BPS through this thread. When people were talking about 2-5% risk free returns in a week selling BPS that should have rang some bells. Now the people that spoke of the incredible returns of BPS seem to have turned to selling straight puts/calls or simply holding. The end result is most likely that most of the readers of the thread now have less shares than before. But oh well, you live and you learn.
The only thing you might be missing is a super TSLA crash all the way down to 500s or low 600s. It becomes almost impossible to sell weekly calls on your shares if you are trying to get called at your B/E of 710.(newbie thinking of trying out the Wheel for the first time)
can someone pls confirm? assume static prices to keep it simple, TIA!
STO 3/11 -p750, $40 credit
if sp >=750, expire worthless
else
- forced to buy shares @750, cost basis 710; if sp=650, roll the 750 early
- STO CC 3/18 -c900, $10 credit 5 DTE
- "keep getting $10 weekly" until sp >=900
if sp suddenly moons to 1000, so what? just repeat the wheel
if sp drops to 650, STO CC -c710 at the very minimum
what am i missing?
It appears that when something is too good to be true it usually is. I am sure many people, including me are burned badly after getting introduced to BPS through this thread. When people were talking about 2-5% risk free returns in a week selling BPS that should have rang some bells. Now the people that spoke of the incredible returns of BPS seem to have turned to selling straight puts/calls or simply holding. The end result is most likely that most of the readers of the thread now have less shares than before. But oh well, you live and you learn.
Anyone that promoted or believed 2-5% weekly returns “RISK FREE” are ridiculously naive.It appears that when something is too good to be true it usually is. I am sure many people, including me are burned badly after getting introduced to BPS through this thread. When people were talking about 2-5% risk free returns in a week selling BPS that should have rang some bells. Now the people that spoke of the incredible returns of BPS seem to have turned to selling straight puts/calls or simply holding. The end result is most likely that most of the readers of the thread now have less shares than before. But oh well, you live and you learn.
Their platform, pricing, products offered, and customer service might be unmatched. Their backtest and research tends to be based on broad indexes and then the smoke and mirrors come in where they try to generalize the results and strategies to individual stocks. You can follow Tom and Tony's trades but it's nothing to write home about.I see options alpha always thrown around here as the place to go to learn but I never see tastyworks/tastytrade mentioned. Tastytrade extensively backtests strategies, compares them, forms conclusions, and are primarily options sellers. For those who dont know, these are the same guys that created thinkorswim and were a part of getting weekly options implemented. I had to go back to my option roots to find a video that might have some relevance to you all right now:and
Buy at the money put ($750 strike)
Sell otm call ($800 strike)
For may expiration this will result in a slight credit.
How is it no additional margin? If the price is $850 come May it would seem that you are out $5k per contract.You'll gain downside protection, give up upside, and at no additional cost/margin.
Good catch, I first looked at this with a 750 strike put and 780 strike call which may result in a slight credit. We'll see what the pricing looks like in the morning. I edited my previous post to reflect the 780 strike call thanksI show the mid-point is a $8.20 debit. (Or at least it was at close, it would likely be significantly different tomorrow morning.)
How is it no additional margin? If the price is $850 come May it would seem that you are out $5k per contract.
And you have to have shares to back it. (Since both options are based on you selling shares.) So I must be missing something.
Tough times, but nobody can claim they didn't see it coming... I guess I'm doing OK as my portfolio is "only" 10% down YTD, and that's basically all due to LEAPS losing value, but at they're mostly Jan 24 strikes, I don't stress about that too much and I'm selling against them all weekly which has mostly recovered the losses anyway
Like others, $TSLA covered calls have been very lucrative again this week, all closed out yesterday - was too hoping for some kind of recovery to resell, but not looking likely right now. Selling lower strikes is probably risky too, after days on end of red, any kind of macro "good news" could cause a sudden and dramatic bounce at any moment - be careful!
Fortunately, I have avoided $TSLA puts like the plague - not a great idea to be selling those when the stock drops 5% daily!
I did write some $GOOGL -p2500's, which are now very slightly ITM in pre-market - I'll probably roll these ATM as I think we're very close to the bottom and markets tend to recover fairly quickly from these geopolitical events
As a general not-advice, I'd note that $GOOGL is a far less stressful stock to trade against, it's moving way slower than $TSLA, far less volatility, but the premiums are decent - a higher entry-cost for LEAPS, yes, but right now those prices became very reasonable IMO - don't forget a split 20 for 1 is coming in July - it also appears to be the one of the least affected mega-cap after $AAPL