This Monday when SP was 665 I sold 17/6 CCs 800 strike for $1.00 premium. I was expecting about the same for CCs I would sell on Friday for the next Friday with the same amount of days. For next week, I was just wondering why I had to go with a Strike $30 lower when the SP was $15 lower and got 25% less premium.
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Wiki Selling TSLA Options - Be the House
- Thread starter adiggs
- Start date
This Monday when SP was 665 I sold 17/6 CCs 800 strike for $1.00 premium. I was expecting about the same for CCs I would sell on Friday for the next Friday with the same amount of days. For next week, I was just wondering why I had to go with a Strike $30 lower when the SP was $15 lower and got 25% less premium.
I bought 400 Tesla shares at $1070 the day after they announced the split
.I noticed the same. I was going to sell a few 800cc but they pay $0.50 so I didn't. I believe you are right in both accounts, maybe next week will be ugly and set the bottom and hopefully bounce the week after with the upcoming P&D.
I bought 400 Tesla shares at $1070 the day after they announced the split
I noticed the same. I was going to sell a few 800cc but they pay $0.50 so I didn't. I believe you are right in both accounts, maybe next week will be ugly and set the bottom and hopefully bounce the week after with the upcoming P&D.
It would be nice to have a run up before earnings for once. I don’t remember the last time it has happened.
What was the percentage drop of TSLA during the start of the pandemic and over what period? Are we going to repeat that same chapter?
-6/17 quarterlies maybe have more demand than 6/24 weeklies, some people maybe closing out calls sold weeks or months ago
-Less interest in a short week
-On Monday, we had just dropped from high 600s on Friday and mid-700s a few days prior - a rebound to 800 seemed theoretically possible. Since then we were rejected by 700 and 800 doesn’t feel very likely for next week
-That being said, when calls are so dirt cheap they’re not even close to being worth selling, maybe it’s worth buying some lotto calls. I’ve been buying more than selling the last couple weeks and it’s been…frustrating
I noticed something similar and was guessing that IV has decreased.
For my weekend charting, it looks favorable that we closed above the Thursday low. Notice also, that Thursday’s minimum was higher than the 5/24 $620.57, another good sign. Finally, MaxPain was suggesting a >$680 close next week, but let’s wait until Tuesday’s numbers come out. I will also guess that the weekly range may include testing those p680s and c700s. Anyone selling options for next week should wait until those lines are tested.
I’m more nervous about the possibility of a 3-day rally similar to the highlighted purple ellipse, though I expect it closer to 6/30. Still waiting to sell CCs until Wednesday, and only after we break 700. With highly uncertain quarterly numbers coming soon we could break either direction (wow, starting to sound like a technical expert, maybe I should start a YouTube channel
). In the unlikely event that numbers beat Q1, we should quickly break that 775 resistance. More likely we don’t beat Q1, and test 620. Unfortunately, the next leg down is to 550.
Ouch, definitely hope that doesn’t happen. Careful out there.Finally, there’s some MaxPain weirdness showing in the late July weeklies. Monthlies are difficult to read because they are open longer, so I prefer looking at the weeklies. Early July looks as one might expect: call buying at 730, 750, 800s (I’m in there too). For 7/22 there are nearly identical numbers of puts and calls at 620, 660 & 800. Coincidence? Again, similar behavior for 7/29, 660/710 but without the 800s. Looks to me like someone is buying/selling spreads/strangles. Hmmmm. Thoughts?
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I also will wait until above 700 to sell CC.I noticed something similar and was guessing that IV has decreased.
For my weekend charting, it looks favorable that we closed above the Thursday low. Notice also, that Thursday’s minimum was higher than the 5/24 $620.57, another good sign. Finally, MaxPain was suggesting a >$680 close next week, but let’s wait until Tuesday’s numbers come out. I will also guess that the weekly range may include testing those p680s and c700s. Anyone selling options for next week should wait until those lines are tested.
I’m more nervous about the possibility of a 3-day rally similar to the highlighted purple ellipse, though I expect it closer to 6/30. Still waiting to sell CCs until Wednesday, and only after we break 700. With highly uncertain quarterly numbers coming soon we could break either direction (wow, starting to sound like a technical expert, maybe I should start a YouTube channel
View attachment 818345
Finally, there’s some MaxPain weirdness showing in the late July weeklies. Monthlies are difficult to read because they are open longer, so I prefer looking at the weeklies. Early July looks as one might expect: call buying at 730, 750, 800s (I’m in there too). For 7/22 there are nearly identical numbers of puts and calls at 620, 660 & 800. Coincidence? Again, similar behavior for 7/29, 660/710 but without the 800s. Looks to me like someone is buying/selling spreads/strangles. Hmmmm. Thoughts?
View attachment 818351
View attachment 818352
I disagree that 775 is an easy resistance level to break however.
We are still in a bear market and economic indicators still to use a highly technical term; Suck.
weekend mental exercise
this is very interesting... purposely STO a DITM BPS with no possibility of loss
the trick is to leg in (may take days) and watch the net credit
DITM BPS is all green and guaranteed no loss if the legging is timed correctly
this raises the question: if a current BPS is in max loss position, can't the fix be a roll into another DITM BPS that doesn't lose? Make sure new strikes are really low (ex 650) to guarantee future expiry, and watch the extrinsic (will be high if initially ATM)
this is very interesting... purposely STO a DITM BPS with no possibility of loss
the trick is to leg in (may take days) and watch the net credit
- sell the -p at the lowest dip (i know this)
- buy the +p at the highest peak (amiright?)
- make sure total credit > width (this is the secret)
- will need large margin until the 2nd leg is bought
DITM BPS is all green and guaranteed no loss if the legging is timed correctly
this raises the question: if a current BPS is in max loss position, can't the fix be a roll into another DITM BPS that doesn't lose? Make sure new strikes are really low (ex 650) to guarantee future expiry, and watch the extrinsic (will be high if initially ATM)
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Just to make sure I get this right, Let's say monday opens at 650, and you "know" it will go up. So you sell a 655p to open for ~$30. Then as the day progresses and the sp rises (hopefully), you then buy a $635p to open for $10. This yields you a $20 credit on a -655p/+635p BPS. Correct?
To this I ask, "why not simply close the -655p (might be worth ~$18 at that point) to realize the ~$12 gain early"? Is it because the sp might go up further, so you want the chance to realize the full $20 profit?
If you switch the order, you won't need such a large margin, ie.
buy the +p first at a high peak
sell the -p at the lowest dip
Its interesting to consider.
If the buy-write ends up ITM, do you plan to just it assign, or do you actively close it?Interesting questions.
Regarding the closes yesterday vs. today, not questioning them in the least. Then again once I make a trade the only question I ask myself later is whether there was something I knew, when I made the trade, that I would use in the future to make the trade differently. Its more of a process thing for me, rather than optimizing an individual trade.
In that context, yesterday's closes ticked off all my boxes for an early close:
- high % gain (not much of a motivator, but it does help to know how much is left to earn)
- high absolute gain. More of a motivator
- big drop in the share price (close cc's on down days)
- closing early also enables an open on the next up day that is frequently the next day (never open a replacement position on a day where a position is closed)
- in this case, since the uptick rule got triggered, today being flat to up was nearly guaranteed in my mind. At the least a big down day wasn't in the offing.
I also used market orders for all of those opens and closes - once I've decided I like the new position (opening or closing), I just do it and don't sweat the pennies. The market orders frequently get me the mid point, and that is plenty good for me. I've explained the logic elsewhere.
Anyway - by closing yesterday at really high % gains I had no overnight thought or worry about today. I expected an up day - I was hoping for a bigger move up today. The only reason for the expectation was the big move down plus the fact it reached 10% / triggered the uptick rule. Little or no stomach acid is a biggie for me, and I'm finding the buy-writes to work REALLY REALLY well for me in this regard.
On a bigger move up I would have been able to open an even better strike and/or premium. And the $7.50ish open is a great position for me. If I close at 2/3rds then that'll be a $5 realized result for next week. And the 700 strike, even if it gets overrun, means I'll take a $20 loss when I sell the shares. I'll have collected north of $70 over the 4 weeks for a net $50 plus the $7 - $57 over 4 weeks makes for some excellent dividend like result action.
Oh - and I was closing 650s and 680s - now I have 700s (lots better strike) for next week.
In summary - for dividend like income this week has worked out great. Next week is lined up to be great, and as this is cash I would otherwise be using to sell cash secured puts, I'm not nearly as attached to the shares as I would otherwise be. If we go to 700ish next week then I'd probably roll to $10 or $20 OTM but if we get to 750 or 800ish then I just well the shares when I close the cc's and am excited about the net result ($20 share loss, $70+ premiums). And I'll even be happy having that cash again
If somehow we drifted up week to week then I'd have the best of all worlds - a steadily improving cc strike as well as big weekly credits.
More likely we'll have a sharp move up that will push time value close to 0 - I'll use that as an early close opportunity, watch the share price drop the next day, and start a new buy-write.
Active I mean buying back the call option and then selling the shares.
Is there any difference?
attaching 3min bars for PM+RTH+AH from ~mid-mar thru last Fri
This "fix" would be good approach for a DITM bps, same expiry only, correct?
At the peak you'd sell the long side in exchange for a lower strike (requires additional margin until low hits). At the low, buyback the short and sell a lower strike to form the "less DITM" bps (frees additional margin assuming same width) ???
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