-
Want to remove ads? Register an account and login to see fewer ads, and become a Supporting Member to remove almost all ads.
Wiki Selling TSLA Options - Be the House
- Thread starter adiggs
- Start date
In term of theta & delta they are vastly different. Lets say both the 820p and 820c have 0.5 delta and the same theta n.weekend puzzler and challenge to the geniuses...
so i bought shares @820 and STO 7/29 CC 820 ATM, credit 25; ok to be assigned
instead of buying shares, why couldn't i just buy a synthetic long?
does anyone else do this? what did i miss? TIA! the one thing i can think of is that the broker will cancel both +c820 and -c820 because they offset each other out and in that case, i am left with a simple -p820 (and net credit from the removed c legs became cash)... this is still more income than just selling -p820 alone
- sell -p820, buy +c820, credit 2.77 (this mimics buying stock using less capital and getting paid to "buy stock")
- wait for higher peak and sell -c820, credit 25 for example (this is the cc)
- net 27.77 instead of 25
- if the 2 legs of the synthetic are timed on dip/peak, there is even more credit than just 2.77
- if expiry >820, all 3 contracts expire
- if expiry <820, buy stock 820 as usual
The Sell Put And Buy Call Strategy | A Synthetic Long Stock
The Sell Put And Buy Call Strategy is a synthetic stock option strategy: using call and puts options to mimic the performance of a position, usually involving the purchase of a stock.epsilonoptions.com
note: i can prevent the broker from cancelling the c legs by selling 830cc instead of 820cc
buy write 820 = sell 820p. delta = 0.5, theta = n
synthetic long = buy 100s. delta = 1, theta = 0
Also, at exactly 820, your 820 synthetic long should not pay you much higher than a dime or 2. $2.77 is unrealistic. Most of the time you will pay a small spread to the dealer for a synthetic long initiated at the exact strike price.
Synthetic long is no different from buying stock outright. Although you dont have to shell out anything initially, the broker still holds $82k for collateral. Try not to think in term of cash balance but in term of delta, theta, and maintenance margin requirement. In term of maintenance margin requirement, synthetic long and long are identical.
all other alternatives involve market timing of some sort. if you can reliably wait for “the peak”, your money printer can rival the Fed.
Last edited:
Synthetic long stock with split strikes.
Synthetic Long Stock Explained | Online Option Trading Guide
The sold puts and bought calls do move the same direction on stock movement, but isn't a Texas Hedge buying calls and shares, or any combo where underlying trade aligns with the option trade? The anti-hedge.
yeah, it's not really a $7175 bet. That might be the debit paid, but if tsla had dropped below 750, he'd be on the hook to buy 500 shares at 750..
So in fact he's risking $375k.
Thank you MMD! I closed out of my Friday 850c for ~$2 loss. Waiting to sell a 900 upon recovery [that act should send it straight into four figures]
jeewee3000
Active Member
For 8/19 I'm holding:
(call side)
-850cc's
-900cc's
-950cc's
(put side)
-850p/+450p (wide BPS)
The losing side will be rolled.
(I'm on holiday so don't want to micromanage trades.)
(call side)
-850cc's
-900cc's
-950cc's
(put side)
-850p/+450p (wide BPS)
The losing side will be rolled.
(I'm on holiday so don't want to micromanage trades.)
All trades for Friday:
Doing spreads with short legs -650 for the BPSs, and -950 for the BCS.
Also did Buy/write with shares I bought at 811 and CC with 780 strike for $42 for $11 guaranteed profit. Hoping we close just below 780 for $42 profit and chance to sell more CC against those shares next week.
Doing spreads with short legs -650 for the BPSs, and -950 for the BCS.
Also did Buy/write with shares I bought at 811 and CC with 780 strike for $42 for $11 guaranteed profit. Hoping we close just below 780 for $42 profit and chance to sell more CC against those shares next week.
I have similar strikes open that were rolled there to escape a prolonged dip ... -840/+640 BPS for 8/19
dc_h
Active Member
Definitely interesting approach on the wheel. If you get exercised on CC's, it would give you a chance to profit on a big run up.
I have noticed this too. Most likely this is just the post earnings IV drop.
Knightshade
Well-Known Member
Yeah haven't done my usual 20% OTM of open spreads yet this morning because premiums were hilariously bad, waiting to see if we get a more substantial dip to do it
Similar threads
