-
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
Don't worry, I closed both my call spreads (at 1/3 the sell price, so 66% profit) and the put spreads (1/10 the sell price, so 90% profit), so the tiger did not bite me today. Figured I let you know before you start laughing as it crosses the 900 just before close
john tanglewoo
2012 Roadster Owner
Opened 8x -c1030 Sept 16 for almost $18, going to watch this squeeze and see what happens. Of my last 8 trades the longest I have left one on is 11 days, so I'll probably try to get out of these if we have any good down days.
BTC @ 2, made my 1% this week!
Closed all my positions and opened a -c900/-p900 straddle for next week. Riding the tiger.
Wow, I need a cigarette
. Closed my -c900s for a tiny profit & -c905s fo 80% profit (still small potatoes). So, a single call is $90k, for which I got $130 premium this AM, so <0.1% profit (closed before run over 900) for a huge amount of stress. Proof again, that selling CCs too close ATM isn’t worth the stress unless you are willing to let it exercise. I’m still cogitating on the -p/-c900 straddle and letting them exercise. Hmmmm.Perfect end to the week! Thanks all for the helpful posts of technicals, flows, and good chatter. This week I bought back the 855C at an overall 70% credit instead of rolling, the 800 CSP and 840/740 BPS expired worthless, also copied a call-buy for a few months out that have already begun appreciating. For next week I have 840/640 BPS that I expect will expire. If not, some I may close or let be assigned. This BPS has a huge a chunk of margin that I want to release, I will refrain from rolling. If I can get the rest of the rolled BPS to expire December without messing with them, I may be able to start the new year margin free; thanks to all for the great ideas and for instilling the value of maintaining good discipline by trading safely and sanely. The 755C from an B-W that still keeps on giving! It's now rolled up and out for a credit to 8/26 @ 785C. With the retrace talks, who knows, it may be able to buy it back by then. Hope not though , let's go!
OK, so I'm Mr Smarty-pants with my 900 straddle, which finished as close as you could get...
In fact a perfect week, the calls were closed for pennies (the GOOGL gravy as well), the puts expired by 2c, and from being very-nearly 7-digits realised losses in March, I'm back +ve for the year, phew!
Now... confession time... in the mid 890's I decided to sell 10x -p900 for next week @$26.5, and then, thinking we'd close just below 900, wrote 10x -c900's as well @$25.1, but hell, 2c miss on getting 1000x $TSLA to underwrite those calls (yes, I have 1000x already, but want to keep some for Splitty Mc SplitFace...), will 2c puts assign? I don't know, but I'm expecting green next week, so to be sure I bought 1000x $TSLA in AH for the bargain price of $899.90
So, yeah, I have another 10x -p900/-c900 straddle for next week too, but this time I'm expecting the calls to go ITM
In fact a perfect week, the calls were closed for pennies (the GOOGL gravy as well), the puts expired by 2c, and from being very-nearly 7-digits realised losses in March, I'm back +ve for the year, phew!
Now... confession time... in the mid 890's I decided to sell 10x -p900 for next week @$26.5, and then, thinking we'd close just below 900, wrote 10x -c900's as well @$25.1, but hell, 2c miss on getting 1000x $TSLA to underwrite those calls (yes, I have 1000x already, but want to keep some for Splitty Mc SplitFace...), will 2c puts assign? I don't know, but I'm expecting green next week, so to be sure I bought 1000x $TSLA in AH for the bargain price of $899.90
So, yeah, I have another 10x -p900/-c900 straddle for next week too, but this time I'm expecting the calls to go ITM
. I wonder if there will a big sell off if it gets there and take down everything with it.
And I thought power hour today was exciting (was picturing you at the top of the $900 call wall laughing your a$$ off), can't wait to see what happens with the above straddle next week. I'm a wussie and am waiting for a spike Monday to write some $1000 calls.
But I think we are going green next week as indices point to the bear market being over and the IRA going for signature.
I know I could be leaving money on the table, but with the split coming I'm definitely going 20% OTM on any calls I don't want assigned, like my BCSs, next week. I'm obviously going to watch the open, but probably looking at 1080, 1100, or 1120 for the short legs. I'll be looking at 1,000 only on Buy/writes in my mom's account with shares that were acquired on CS 1000 Puts from a couple months back.
I’m so happy I waited on writing calls for next Friday. I’m guessing with all that 900 effort today, Monday could be very interesting.
Quick question. I’ve read those lucky people who have been playing this options game before the first split mention that they made more money after the split. Why is that? Transaction fees aside, why is it that selling 1 $2000 call at $2000 sp is less profitable than selling 5 $400 calls at $400 stock price? I’m happy to be able to have 3x the flexibility and to work with smaller chunks of my total holdings. Unfortunately, unlike some of you, the .65c fees won’t add up that much….yet.
Quick question. I’ve read those lucky people who have been playing this options game before the first split mention that they made more money after the split. Why is that? Transaction fees aside, why is it that selling 1 $2000 call at $2000 sp is less profitable than selling 5 $400 calls at $400 stock price? I’m happy to be able to have 3x the flexibility and to work with smaller chunks of my total holdings. Unfortunately, unlike some of you, the .65c fees won’t add up that much….yet.
I took the move up later in the day to close 800 strike puts expiring next week. In for 6.50, out for 1.50. I think it most likely that I would earn as much of that remaining 1.50 next week as I wanted to.
However my trading rules urge me to take this profit and look for a move down on Monday to open the replacement position.
I am stacked really heavily for a move up from here and through to the split date. I purchased 1050 and 1100 strike calls for expiration the Friday after split. Anybody thinking about copying that trade - be advised that my track record on purchased calls is beyond bad. There are bad results, there are really bad results, and somewhere further beyond that is how these work out for me.
Beyond those I'm still biased heavily to move upwards for the split via shares and leaps. After the split I'll be doing some more watching and waiting for a few days to a few weeks to see how the market likes the split shares, and TSLA before I return to selling cc's.
I believe that we have a non-zero possibility that this split will set off a market revaluation of TSLA. Past revaluations were multiples of the ATH over a few months. Due to the company size and market disbelief that such a large company can grow so fast, I tend to think that a market revaluation will be more like 50%. So $1800/share pre-split instead of $2500.
I don't consider that likely - only a high enough probability to leave shares uncovered just in case. The larger observation here is that if I get the direction correct, then I can earn WAY, WAY more on the change in the share price than I can earn in a year or more of option sales. As an easy for instance if we see $1000/share, then the incremental $100 from here would represent about 10-20 weeks of income in those positions the way I keep track of it. That isn't very far at all.
In the meantime income will be limited to what I can generate from my cash / csp / bps / buy-writes.
I also continue to feel that macro is most likely to dominate over the remainder of the quarter though I think low 800s is about as low as we can go right now. These and other thoughts, combined with $5, is worth a cup of coffee (i.e. - not advice).
Another wild card around macro - how much 'improvement' in the inflation and other indicators is needed for the investing class to haul out the confetti and start a party? I suspect not much. This also seems like a great setup for the Fed to come in with a particularly large interest rate move as a mechanism to convey just how serious they are taking inflation. So far none of the interest rate moves has been a surprise of any kind (which could be a good thing), and it looks to me like its leaving investors with a blase attitude towards things (a bad thing). The Fed also has the option of picking up the nearly non-existent pace of QT.
So far the investing class is taking signs that inflation is no longer growing as somehow indicating that inflation is over. It's not over, its just stopped increasing (maybe).
However my trading rules urge me to take this profit and look for a move down on Monday to open the replacement position.
I am stacked really heavily for a move up from here and through to the split date. I purchased 1050 and 1100 strike calls for expiration the Friday after split. Anybody thinking about copying that trade - be advised that my track record on purchased calls is beyond bad. There are bad results, there are really bad results, and somewhere further beyond that is how these work out for me.
Beyond those I'm still biased heavily to move upwards for the split via shares and leaps. After the split I'll be doing some more watching and waiting for a few days to a few weeks to see how the market likes the split shares, and TSLA before I return to selling cc's.
I believe that we have a non-zero possibility that this split will set off a market revaluation of TSLA. Past revaluations were multiples of the ATH over a few months. Due to the company size and market disbelief that such a large company can grow so fast, I tend to think that a market revaluation will be more like 50%. So $1800/share pre-split instead of $2500.
I don't consider that likely - only a high enough probability to leave shares uncovered just in case. The larger observation here is that if I get the direction correct, then I can earn WAY, WAY more on the change in the share price than I can earn in a year or more of option sales. As an easy for instance if we see $1000/share, then the incremental $100 from here would represent about 10-20 weeks of income in those positions the way I keep track of it. That isn't very far at all.
In the meantime income will be limited to what I can generate from my cash / csp / bps / buy-writes.
I also continue to feel that macro is most likely to dominate over the remainder of the quarter though I think low 800s is about as low as we can go right now. These and other thoughts, combined with $5, is worth a cup of coffee (i.e. - not advice).
Another wild card around macro - how much 'improvement' in the inflation and other indicators is needed for the investing class to haul out the confetti and start a party? I suspect not much. This also seems like a great setup for the Fed to come in with a particularly large interest rate move as a mechanism to convey just how serious they are taking inflation. So far none of the interest rate moves has been a surprise of any kind (which could be a good thing), and it looks to me like its leaving investors with a blase attitude towards things (a bad thing). The Fed also has the option of picking up the nearly non-existent pace of QT.
So far the investing class is taking signs that inflation is no longer growing as somehow indicating that inflation is over. It's not over, its just stopped increasing (maybe).
A pretty boring week in the end for me - but I'm getting to like boring. All my 770, 780 and 790 x 40 wide BPS were left to expire by themselves for 100% profit and just over 1.5% portfolio gain. Nothing on the call side this week - I didn't commit to selling CC's early enough in trading for day trades, so will have to improve on that next week. I'll open new BPS on the Monday MMD, targeting around 9-10% OTM, a bit closer than usual due to the upcoming split.
The only thing I had to do on Friday was roll my protective Puts over to next week. In the main account this was 13 x 650P+ that were rolled to next week as 500P+ for 0.04 each ($52) for minimal margin buffer. On Monday I'll roll these up again to 650 or 700P+ (after weekend theta burn) for around 0.10 each ($130). That should give me enough extra margin for around 35 extra BPS or say $8-9,000 in extra premiums for the $182 outlay. Gotta love the madness of IB's portfolio margin calculator.
All my 770, 780 and 790 x 40 wide BPS were left to expire by themselves for 100% profit and just over 1.5% portfolio gain. Nothing on the call side this week - I didn't commit to selling CC's early enough in trading for day trades, so will have to improve on that next week. I'll open new BPS on the Monday MMD, targeting around 9-10% OTM, a bit closer than usual due to the upcoming split.The only thing I had to do on Friday was roll my protective Puts over to next week. In the main account this was 13 x 650P+ that were rolled to next week as 500P+ for 0.04 each ($52) for minimal margin buffer. On Monday I'll roll these up again to 650 or 700P+ (after weekend theta burn) for around 0.10 each ($130). That should give me enough extra margin for around 35 extra BPS or say $8-9,000 in extra premiums for the $182 outlay. Gotta love the madness of IB's portfolio margin calculator.
Last edited:
I could be wrong on this but it just seems like I'm getting more or less the same premium for a CC contract now as I was before the last split, I just have 5 times as many shares to sell them against.
Looking back at my notes, I priced an 8/14/20 1600CC for $8.90 on Friday 8/7/20 just before the split announcement (8/11/20) when TSLA was at $1485. So that was a premium of $8.90 for 7.7% OTM. A similar CC and premium at todays close for 8/19/22 and 7.7% OTM (970CC) would be a premium of about $5.75.
So accounting for the 5:1 split, current CC premiums are roughly 3.2X higher than before the split (5 x $5.75 / $8.90).
Edit: Changed 'sold' to 'priced' as I don't think I actually sold this one at the time. The close on 8/14/20 was $1650 so I hope not!
Also IV at that time was around 69%, which is a bit higher than today at around 55%
Last edited:
This is what I’ve heard in the past. While this is wonderful news, anyone have any idea about the math behind it? It doesn’t seem to make any sense but here we are.
Question about that 2nd paragraph, what is the value of rolling the protective puts over letting them expire and then opening replacements on Monday? That would be even cheaper as you wouldn't be buying out the current week puts (literally pennies either wayA pretty boring week in the end for me - but I'm getting to like boring.
The only thing I had to do on Friday was roll my protective Puts over to next week. In the main account this was 13 x 650P+ that were rolled to next week as 500P+ for 0.04 each ($52) for minimal margin buffer. On Monday I'll roll these up again to 650 or 700P+ (after weekend theta burn) for around 0.10 each ($130). That should give me enough extra margin for around 35 extra BPS or say $8-9,000 in extra premiums for the $182 outlay. Gotta love the madness of IB's portfolio margin calculator.
).Still - looks like extra gyrations over what's needed.
Similar threads
