AquaY
Member
Do you need the margin to increase your safety cushion?
If not I'd look to roll it out to 810s for about $1 or look at rolling out 2 weeks
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Wiki Selling TSLA Options - Be the House
- Thread starter adiggs
- Start date
If not I'd look to roll it out to 810s for about $1 or look at rolling out 2 weeks
I have been lurking in this thread for a while and learnt a lot from all you experts.
Looking for not-advice. I had to sell a few CC's to raise cash a few days ago but I'm a noob so may have created a mess that I need to get out of now. at ATH I accounted for a 50% drop and basically was a hodler that don't sell options often, but now here we are a few days ago and I had to raise cash incase we are going lower. (I can't sell puts because I only have CSP privilege's , can't sell puts on margin, selling CCs was my only option)
(Margin call would have been around $640, selling those CC's improved it to $580 currently)
I've created a bit of a mess with these cc's potentially capping gains if the rally continues though. I sold at the money calls for maximum extrinsic premium and was hoping that they will decay away but then this 3 day rally happened.
Opened 1x5/27 ATM $670cc $31.94/contract free rolled to 6/10 $700cc yesterday around $45/contract
Opened 2x5/17 ATM $600cc $38.8/contract , free rolled to 9/16 $700cc yesterday as well around $111/contract
Opened 1x5/27 ATM $755cc $4.95/contract, I'm watching this today , but may just let it run its course no matter what happens
How low or high can it go?
if the 5/27 $755cc get assigned, sell 100 shares, my margin safety should go to $391/share, if not then it will still be $580/share
I may be able to raise some cash from my line of credits (outside of the brokerage account), that should reduce my margin call share price to around $400/share.
If i get assigned on the $755cc , sell 100 share and combine with the cash injection, I should safe to $129/share, lol is this going to $0? /s
Should I roll/buy back at a loss/hold and wait for my 6/10 , 9/16 $700cc's?
Thanks in advance
Looking for not-advice. I had to sell a few CC's to raise cash a few days ago but I'm a noob so may have created a mess that I need to get out of now. at ATH I accounted for a 50% drop and basically was a hodler that don't sell options often, but now here we are a few days ago and I had to raise cash incase we are going lower. (I can't sell puts because I only have CSP privilege's , can't sell puts on margin, selling CCs was my only option)
(Margin call would have been around $640, selling those CC's improved it to $580 currently)
I've created a bit of a mess with these cc's potentially capping gains if the rally continues though. I sold at the money calls for maximum extrinsic premium and was hoping that they will decay away but then this 3 day rally happened.
Opened 1x5/27 ATM $670cc $31.94/contract free rolled to 6/10 $700cc yesterday around $45/contract
Opened 2x5/17 ATM $600cc $38.8/contract , free rolled to 9/16 $700cc yesterday as well around $111/contract
Opened 1x5/27 ATM $755cc $4.95/contract, I'm watching this today , but may just let it run its course no matter what happens
How low or high can it go?
if the 5/27 $755cc get assigned, sell 100 shares, my margin safety should go to $391/share, if not then it will still be $580/share
I may be able to raise some cash from my line of credits (outside of the brokerage account), that should reduce my margin call share price to around $400/share.
If i get assigned on the $755cc , sell 100 share and combine with the cash injection, I should safe to $129/share, lol is this going to $0? /s
Should I roll/buy back at a loss/hold and wait for my 6/10 , 9/16 $700cc's?
Thanks in advance
Far be it for me to give you advice, but that seems like a good roll to me, especially since there is one less trading day next week. And more so if you are ok with selling your shares.
I sold 8x $740 at $1.03 for tomorrow... hopefully I don't regret this
As usual turned a good week into a bad one
. I had 22x of these contracts and got out early today between $3.5-8; I end of losing about $4k for the week. I hope we keep going up next week, my Jun 24 500's are starting to turn green with the best one at +$7k but some still -$2k.
bballshinobi
Member
In the case of blown-up CC's, my recommendation is to not panic roll, especialy in this market. Yes, the stock right now is undervalued. Yes, we are oversold. However, the market sentiment is still very bearish. There are also a lot of people who are trapped between $750-$1,250. Many of them will get out as soon as the stock hits their breakeven price. Even if we go back up to $900 we can easily get sold back down to the $700 level again. We went from $1250 to $700, then from $700 to $1,150, then $1,150 to $620.
Personally, I would sell CC aggressively on this leg up. I think the rolls you did are fine. Maybe extend the 6/10 one to July or August as I think this DCB can last 4-8 weeks. As for the $755CC for today, I would buy it back at the end of the day and take the loss (if any) and sell CC next week to recoup it.
corduroy
Active Member
This was a little too close for my taste so I did a 3 leg close roll (I just made that up, not sure what to call it)
I entered a single ticket to BTC -745c, BTC 6/3 -720p, STO 6/10 -710p for a small credit. Basically the roll down/out 1 week of the put paid for the call loss. I am starting to feel a little more bullish so this transferred the risk from the call to the put, which I am more comfortable managing.
bballshinobi
Member
The current of IV 65 is still in the 72% percentile. During June - September last year IV was around 40-50, I would wait until the stock and the market overal flattens. You can use barchart.com to check IV history, and Option Value Calculator to figure out the difference IV makes. For example:
At current IV and stock price of $750, $1,000 09/2023 call = $141
If IV goes down 20% to around 50,
- the same option = $98
- the same option won't be $141 until the stock reaches $850
A lot of people's LEAPs went down dramatically last year even though the stock was flat. I think the best time to buy calls is when you are not happy selling them. Right now I think the premium is still juicy. As an option seller, you wil know when the marke for IV is down.
I closed my 750cc, expiring next week, yesterday with shares around 710. Those were a loss - something like in for $4 out for $12. I didn't like taking that loss, but I also had a feeling that 750 for next week was a problem, that I've had that feeling before, and that whenever I haven't acted on that feeling I've regretted it. The specific problem wasn't going ITM - these are positions that I intend to have go ITM sooner or later. However I need something more like an 850 cc strike so that anything that gets trapped is in a profitable position (strike to strike shows a gain rather than a loss). With the 750 strike, my specific worry is that we're about to see a week+ run of up days, quickly leaving those 750s too far ITM to be reasonably salvageable. Taking the loss yesterday keeps me out of that potential problem. Today I find that I'm happy with that decision yesterday, even if we follow up with a down day on Tuesday.
The big news is the buy-write I opened 2 days ago. Buy shares at 661, sell 680 cc @ 23 (next week expiration), for a total of $42 possible gain. Today was able to close those positions for about $6, netting me $42 in and $6 out ($36). The resourced used for these positions would have been used for csp instead. If I had been really aggressive I might have opened CSP @ 12, and been able to close today for $2 (probably more) for a gain of $10.
The net on these two positions - the buy-writes, much fewer in number, pays for the loss on the cc, for a pretty much $0 change.
I've had more thoughts about buy-write and I'll come back to that. My first experience has been fantastic and I'll be doing more of these. First pass guess - this will be my preferred strategy in place of cash secured puts and BPS in the future.
No puts open right now - I'll wait for a down day to open new ones, and they'll probably be buy-writes instead.
The big news is the buy-write I opened 2 days ago. Buy shares at 661, sell 680 cc @ 23 (next week expiration), for a total of $42 possible gain. Today was able to close those positions for about $6, netting me $42 in and $6 out ($36). The resourced used for these positions would have been used for csp instead. If I had been really aggressive I might have opened CSP @ 12, and been able to close today for $2 (probably more) for a gain of $10.
The net on these two positions - the buy-writes, much fewer in number, pays for the loss on the cc, for a pretty much $0 change.
I've had more thoughts about buy-write and I'll come back to that. My first experience has been fantastic and I'll be doing more of these. First pass guess - this will be my preferred strategy in place of cash secured puts and BPS in the future.
No puts open right now - I'll wait for a down day to open new ones, and they'll probably be buy-writes instead.
Price action seems like this is a squeeze, no? Might not last if that's the case. I have no open covered calls and I'm feeling stupid. What's good? lol
Compared to IV one week or two weeks ago it has come down quite a bit. I honestly don't think premiums are juicy enough especially with major indices above their 20 day MA(bullish for short term sentiment) and Tesla seemingly got manipulated down on fake news.
I'm not betting the boat on calls or anything but I do think there is at least another day of upside. I realize the sentiment is negative but I'm taking it day by day.
bkp_duke
Well-Known Member
I'm expecting 0-3 more days up, then a leg down to re-test support. Looking to sell some BPS on that re-test.
NOT advice.
NOT advice.
I don't know. It looks to me like it's just trading with macros plus beta today. No spike in volume, very orderly. At least I hope that's the case.
I've been too gun-shy to write CCs lately. I've been regretting that the last few weeks, but I'm patting myself on the back this week.
Beer and margaritas are going to taste good this holiday weekend!
Having opened a buy-write and had it work about as well as possible, I've been thinking more about these.
The first realization is that a buy-write makes use of the same resource as a cash secured put, in nearly the same amount. In this first instance I bought shares at 661 (66k per contract) where I might have sold a 630 strike csp (63k per contract).
The buy-write also profits in the same way - shares going up and/or time passing. As with a CSP, buy-writes perform poorly when the shares go down.
The net on this first position is around $36/share ($42 in, $6 out) where a CSP might have earned $12 in, $2 out, for $10; using virtually identical cash backing. Even if I hadn't earned the strike to strike gain, this would have been $23 in, $6 out, for $17 realized gain in 2 days. That's a great result if it had needed the entire week and a half the position was originally opened for, and much better than the possible result from a CSP.
Thus my thinking and evolution of the moment -- I'll be using the same entry criteria for these as I would for a csp (open on a down day, probably closing on an up day). The difference is that at these fairly low share prices (I'm using 950 as the midpoint of the current trading range), then the buy-write is a better choice. I'll be entering for much larger credits, and in the event of a move down it will be straightforward to chase the share price down while still collecting large credits.
I don't really know yet what a big move down will look like - am I losing money (unrealized) 2x as fast on a buy-write over a csp? I kinda sorta think yes, while also earning $$ 2x as fast on a move up. That sounds like leverage to me, in which case I absolutely positively for sure don't want to use margin or share replacement calls for these. I -really- like the emotional dynamic on these better than BPS.
I also don't want to use share replacement calls for these, almost for sure, as the IV changes and time decay can alter the profit dynamics. With purchased shares, the share price increases will -always- yield a steadily increasing profit, right up to the max. At higher share prices, the incremental gain becomes small but is always positive. Using share replacement calls that dynamic can flip, where incremental gains in the share price lead to an overall loss int he position (the cc is losing money faster than the share replacement call is gaining money).
As a bonus, I get free "optionality" on a steadily rising share price, in the form of both aggressive call credits plus strike to strike price gain as the shares go up. This is unlikely to happen very much, but its not available at all on CSP (not $ for $ on share price drifting upward).
I figure that for these calls I roll as long as I'm getting $10+ credit each week.
Also definitely not risk free, with the risks for loss on these positions coming from the same thing that creates losses on csp. And with a similar ability to 'roll forever' as the CSP.
For those that have been doign buy-writes, am I missing anything? Anything you would add to their dynamics and how to manage them well?
The first realization is that a buy-write makes use of the same resource as a cash secured put, in nearly the same amount. In this first instance I bought shares at 661 (66k per contract) where I might have sold a 630 strike csp (63k per contract).
The buy-write also profits in the same way - shares going up and/or time passing. As with a CSP, buy-writes perform poorly when the shares go down.
The net on this first position is around $36/share ($42 in, $6 out) where a CSP might have earned $12 in, $2 out, for $10; using virtually identical cash backing. Even if I hadn't earned the strike to strike gain, this would have been $23 in, $6 out, for $17 realized gain in 2 days. That's a great result if it had needed the entire week and a half the position was originally opened for, and much better than the possible result from a CSP.
Thus my thinking and evolution of the moment -- I'll be using the same entry criteria for these as I would for a csp (open on a down day, probably closing on an up day). The difference is that at these fairly low share prices (I'm using 950 as the midpoint of the current trading range), then the buy-write is a better choice. I'll be entering for much larger credits, and in the event of a move down it will be straightforward to chase the share price down while still collecting large credits.
I don't really know yet what a big move down will look like - am I losing money (unrealized) 2x as fast on a buy-write over a csp? I kinda sorta think yes, while also earning $$ 2x as fast on a move up. That sounds like leverage to me, in which case I absolutely positively for sure don't want to use margin or share replacement calls for these. I -really- like the emotional dynamic on these better than BPS.
I also don't want to use share replacement calls for these, almost for sure, as the IV changes and time decay can alter the profit dynamics. With purchased shares, the share price increases will -always- yield a steadily increasing profit, right up to the max. At higher share prices, the incremental gain becomes small but is always positive. Using share replacement calls that dynamic can flip, where incremental gains in the share price lead to an overall loss int he position (the cc is losing money faster than the share replacement call is gaining money).
As a bonus, I get free "optionality" on a steadily rising share price, in the form of both aggressive call credits plus strike to strike price gain as the shares go up. This is unlikely to happen very much, but its not available at all on CSP (not $ for $ on share price drifting upward).
I figure that for these calls I roll as long as I'm getting $10+ credit each week.
Also definitely not risk free, with the risks for loss on these positions coming from the same thing that creates losses on csp. And with a similar ability to 'roll forever' as the CSP.
For those that have been doign buy-writes, am I missing anything? Anything you would add to their dynamics and how to manage them well?
Closed my $755cc for $3.30 , small profit, just the 6/10 700cc and the 9/16 700cc to manage now!
Not so fortunate here. I'd sold 4X 755CC , was so fixated on the BPS that expired 125 OTM that I forgot to close out these calls and now stuck myself with a capital gains obligation that I wasn't ready to take this year. Average cost of the shares was around 250. Uhhgggg, I hope the other side doesn't decide to exercise. Silver lining, net gain overall.
Have a nice weekend all.
Have a nice weekend all.
Essentially it's about the direction and velocity of the stock price, when it's going up, sell puts, when it's going down, sell calls, if the velocity is low then you can get away with both, given sufficient distance to the money. This week we had a huge down-day Tuesday, with the $SNAP debacle, then markets changed direction, abruptly and TSLA moved real fast, three days in a row. We all knew something like this was coming, but we didn't know when or how violent, and we don't know how long it will last for, but it will have caught some folks out...
In my infinite wisdom, I sold -c700's @$16 late yesterday (yes, I know!!), and they were ~$50 today when I rolled to next week. I took the same strike for +$8 net and straddled with 2x the number of puts for an extra net +$18 per call position, so if we stay flat not too bad, but if we keep with the 5-7% daily for a couple of weeks, it's going to be painful (remember March this year...??)
It all hinges on whether this is a bear-market rally or a true reversal. TBH I see no good reason for markets to go back to ATH, the macro situation is broadly unchanged, regardless of some slightly softer inflation figures and the trend is still down. We will see!
Remember the market is forward looking… and more tit bits coming out that peak inflation is behind us …
I have 830 cc for next week
and we have just 4 trading days The 830 CCs seemed like a gr8 idea 3 days ago … cheers!!
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