Wiki Selling TSLA Options - Be the House

[corduroy]

That is really interesting. How would we figure out the net delta of the IC without his software?
Edit: Does subtracting the Delta of the short call from the long call and multiplying by the number of contracts work?

I think it's as simple as adding the delta of the 4 positions. For example, I have an IC right now with these deltas

-2.4
14.5
-11.8
1.2

Net delta: 1.5

how to fix an IC using net delta strategy (to buy more time; i've tried this before and it reduces the stress caused by "fix this problem asap")

5 Iron Condor Adjustments that will help you manage your trade

Iron Condor Adjustments are just as important as entry and exit. There are a number of ways a trader can defend this trade when the underlying makes a move.

mrtoptick.com

"4. Delta Hedge. Another Iron Condor adjustment is to use NET delta to hedge this position. This is one of my favorite adjustments because by removing some of the directional exposure, this buys me time to wait and see how I need to adjust this position further. To hedge an Iron Condor using Delta I can use stock or options of the underlying instrument. Let’s say my NET delta of an Iron Conor is -20. I can buy 20 shares of the underlying to cut my NET delta to 0 OR I can buy two 10 delta calls that will add a total of 20 positive delta and will neutralize my directional exposure. If the underlying continues to move against my position, I will then remove my hedge and roll up or down the troubled spread farther away from where the underlying is trading. By using a hedge for this adjustment, it helps to make up some of the losses accumulated by either short spreads of an Iron Condor."

Timely advice, I just started trading high probability ICs on SPY this week. Thanks!

 

[Yoona]

Can you add the time of your trades in the graph or provide a list of times & sales? I would like to see what you see in the moment the trade fires..

sorry, my thinkorswim can't do previous day per-minute charting... but this can explain it way better than i do and lots of graphs there:

one reason why we have losses is because noise/drama/emotion is mixed in with trades and we react based on what we think should happen instead of observing what is actually happening (ie, just look at the numbers); if they are all replaced with a clear entry/exit plan for each trade, then results become somewhat mechanical and predictable... it is not perfect science but it works for me

they explain it better:

Three Fibonacci Trading Strategies + Infographic & Video | TradingSim

Completely demystify how to trade with Fibonacci using these 3 simple Fibonacci trading strategies you can test today. Plus a cool Fibonacci infographic!

www.tradingsim.com

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[Yoona]

That is really interesting. How would we figure out the net delta of the IC without his software?
Edit: Does subtracting the Delta of the short call from the long call and multiplying by the number of contracts work?

oh, it's just adding the deltas... i dunno if you can read my handwriting cheat sheet; ideally, total=0 regardless of contract count

if you have BPS only, even better if net >=0 on green days and net <=0 on red days to extract daily profit

the goal is not to have a daily loss while you are still working on the permanent fix

 

[Yoona]

Timely advice, I just started trading high probability ICs on SPY this week. Thanks!

i learned a lot from this guy and he also does realtime streaming of SPY trading:

https://www.youtube.com/channel/UCVNiVH8UKQXBRr4j3jXUzBA/videos

 

[BornToFly]

We will see what happens tomorrow when CPI data comes out, but this is the setup that leads me to get aggressive and lose money. I sold BCS more than 20% OTM this week anticipating a spike up from the stock split, EV bill, etc. Instead the SP has dropped and I could have been more aggressive. So next week I get more aggressive because no "new" news, and the stock goes up 20% for no reason....

 

[Discoducky]

On a typical week, 4-5 FTE, an ATM straddle will net around $50 per put&call pair, that's a lot of wiggle-room either side of the strike and if you don't mind to buy the stock or sell some shares, then you're golden

I'm interested to know more about this for my non-tax accounts (which is what I'm assuming you do this with).

For this week, your -c900's are looking pretty sweet!

 

[Yoona]

I'm interested to know more about this for my non-tax accounts (which is what I'm assuming you do this with).

me also!

 

[Chenkers]

Todays dip has allowed me to open some BPS - 750/790, 740/780 and 730/770. Spreading it around a bit to manage risk. These are 10.5% to 13% OTM from Monday open so should historically be OK, especially with the big 800 Put wall. We shall see what Wednesdays CPI brings, hopefully positive news.

I'm not doing BCS this week (Pre-CPI) but would like some localised spikes to day trade CC around.

 

[Max Plaid]

I'm interested to know more about this for my non-tax accounts (which is what I'm assuming you do this with).

For this week, your -c900's are looking pretty sweet!

All my trading is within a company account, so I do pay taxes on my net profits on an annual basis. Losses from options are deductible, losses from shares not, so kind of encourages options trading... I actually find it helps my trading paying the taxes, I don't worry about it, it is what it is, the better I do, the more I'll pay...

Indeed, the -c900's and -c925's are OK, but I was alright with them going ITM too as I think we'll trade either side of $900 for a bit ($300 in a couple of weeks from now...)

I don't think we'll get much of an impact from the 3:1 split, but I do think it will support the price a bit, however I do think Q3 & 4 earnings will blow away Wall Street, so I'm OK to accumulate shares at these prices too

 

[Drezil]

With CPI looming and the ridiculous bargin we are getting on TSLA i opened the following:

- base should be a strangle or straddle because we either go up or down on the CPI
- not cost any margin (on my bullish setup)
- refinance theta a bit because i don't want to burn all the money

Ended up with:
+880c
+830p forming a strangle to take advantage of the spike in either direction
combined with an imbalanced iron-condor:
-900c/+950c for the BearCS
-810p/+780p for the BullPS

The theta of the straddle is still dominating like hell, BUT it is lessened (theta of 3 instead of ~5 iirc)
The straddle fully covers any loss the IC can have.

This is only 1 contract shown. I did 10x & it freed up 30+k margin because i "limited my portfolio downside" with those <$700-protection until friday -.-
Theta is 3, but delta gets high FAST so you only need a rough 25pt swing in either direction from here to close it out neutral tomorrow. And with TSLA swinging 50pts on "normal" days this seems feasible to close out with a profit.

Only downside: We stay hugged to the 850-wall for the rest of the week, even intraday, no matter the events (CPI, China invades Taiwan, Russia makes Peace, Asteroid hits Texas, $insert_black_swan_event_here)..

As a betting-man i would say "i like those odds"

 

[intelligator]

The down trend isn't helping two positions that were rolled some time ago to this week and next... especially if , ^ what drezil said, we
"hug" the 850 wall. Each are BPS, 840/740 for this week and 840/640 for next. I can roll this weeks BPS to next at 830/730 for $4 or so credit (or EDIT 820/720 for slight credit) ahead of being ITM but don't want to prematurely with the possibility of closing above the short strike Friday. The delta hedge is interesting but isn't something I fully understand or can implement without putting myself at more risk. Any thoughts how to mitigate without roll? It's in a cash account, options level 2.

 

[Yoona]

The down trend isn't helping two positions that were rolled some time ago to this week and next... especially if , ^ what drezil said, we
"hug" the 850 wall. Each are BPS, 840/740 for this week and 840/640 for next. I can roll this weeks BPS to next at 830/730 ahead of being ITM but don't want to prematurely with the possibility of closing above the short strike Friday. The delta hedge is interesting but isn't something I fully understand or can implement without putting myself at more risk. Any thoughts how to mitigate without roll? It's in a cash account, options level 2.

he thinks possible towards 831

 

[Discoducky]

All my trading is within a company account, so I do pay taxes on my net profits on an annual basis. Losses from options are deductible, losses from shares not, so kind of encourages options trading... I actually find it helps my trading paying the taxes, I don't worry about it, it is what it is, the better I do, the more I'll pay...

Indeed, the -c900's and -c925's are OK, but I was alright with them going ITM too as I think we'll trade either side of $900 for a bit ($300 in a couple of weeks from now...)

I don't think we'll get much of an impact from the 3:1 split, but I do think it will support the price a bit, however I do think Q3 & 4 earnings will blow away Wall Street, so I'm OK to accumulate shares at these prices too

So with these straddles you hold enough cash/margin to buy shares if assigned from your ATM puts?

I'm currently not holding enough of either to do that comfortably as I'm all in LEAPs and shares.

 

[Max Plaid]

So with these straddles you hold enough cash/margin to buy shares if assigned from your ATM puts?

I'm currently not holding enough of either to do that comfortably as I'm all in LEAPs and shares.

Absolutely, all my trades are fully cash covered, I have no margin available to me with my broker (and neither do I want it, as I'm sure it would end badly)

 

[Yoona]

as if the sp is not stressful enough, i just got notice from Canada Revenue Agency (aka IRS) that i am being audited... need to submit ~90 documents going back to the past

word to the wise: make sure you have paper and electronic backup documentation of all trades, especially fees you are claiming as investment expenses

i passed the audit!!! no change needed in the income tax returns...

tomorrow sp is

 

[intelligator]

Monday to Tuesday interest shifted from calls to puts, 950 and 1000 calls trimmed back, 900 held up, maybe profit taking the morning dip with sales of puts doubling down on 800 and 850. Is 875-880 in the cards for tomorrow?

 

[traxila]

Yeah it could have been shorts, hedges and swing traders. But it was EM.

Musk Sells $6.9 Billion of Tesla to Avoid Twitter Fire Sale

Elon Musk offloaded $6.9 billion worth of stock in Tesla Inc. to accumulate cash ahead of a trial that could force the billionaire to follow through on an agreement to acquire Twitter Inc.

www.bloomberg.com

 

[vikings123]

Logic and common sense does not work with Elon haha.

First sale was right after the twitter sale was announced and people said no way he sells TSLA immediately when the sale needs to be closed in September.

Second sale is the day after shareholder meeting telling folks to buy the dip.

Either was it creates volatility which means opportunity for the folks trading options

 

[juanmedina]

Oh Gosh and I opened BPS 750/700 today and I hope they are safe... What's with Elon killing all the rallies? So lame.

 

[BornToFly]

Well, I was wrong about Elon selling this time. I wish he would send me a PM so I don't sell Puts and sell more aggressive BCS....