correction: should be
now it's clearer where the algos are
this week's fib 78%=240 is
next leg down maybe 224.47
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Wiki Selling TSLA Options - Be the House
- Thread starter adiggs
- Start date
now it's clearer where the algos are
this week's fib 78%=240 is
next leg down maybe 224.47
With the 15 x -p416.67 that got exercised my cost basis is now 225. At some point last year I remember my TSLA position was +300%. Now it’s +5%.
I guess I can sell everything without having a taxable event now!
TheTalkingMule
Distributed Energy Enthusiast
The only conclusion I can have at the end of today is: Good thing I did not retire last year to pursue option trading as a full time job. I’d be broke, margin called and would have returned living in my moms basement.
I sympathize with anyone living one or more of the situations above.
I sympathize with anyone living one or more of the situations above.
FWIW this guy has been right a lot and is a huge Tesla bull. He called the top of the Bull and many things since. He has sold all his longs other than Tesla and said if it does get to that prediction he’ll be loading up. He’s one of the few accounts I put some weight in, unlike chicken ducky paper hands moderate intelligence dude.
Commiseration central. Wow, it has been a rough week for me as well, though certainly not one as bad as others are having. With the massive drop, my straddles were way out of balance so I closed the CCs (originally sold in the $3-$6 range) for $0.2-$0.5, resold for the next weeks at much, much lower strikes to generate enough free cash. Then bought back CSPs, one at a time, at massive losses, freeing up the cash backing. Then resold CSPs at lower strikes to match the CCs. When all was done, there was enough cash to round out some lots ($234.20, near daily low), so sold extra CCs (kind of like a buy-write). Strangles are now: 10/14 & 10/28 250s and 10/28 270s. Because of the BWs, the accounts are now slightly unbalanced, having a few more CCs than CSPs. It’s really hard to believe that I’m selling CCs at such low strikes, and would certainly never do it without the CSP balance. I fully expect the SP to rise into earnings, so will probably regret the CC side. However, if the puts approach zero, then all that cash is easily released and the CCs can be rolled back up. So much for reducing my trading frequency.
Although we are still put biased, 245 and 250 call interest improved some. Curious to see what happens Thursday. I was able to generate some credits with today's spread roll to next week. Keeping an eye on extrinsic and further roll opportunities to lower strike at even or credit or debit if need be.
I wasn't around yesterday to chart , M and W was -.08 and -.09 respective, gamma flip is 245... it'd be nice if blew past it.
Looking at options volumes where contracts > 500 , the call to put ratio is slightly higher. There's a tug of war at 240, not much of a contest at 245, 250. Of concern is the plays at 230 and 225.
I wasn't around yesterday to chart , M and W was -.08 and -.09 respective, gamma flip is 245... it'd be nice if blew past it.
Looking at options volumes where contracts > 500 , the call to put ratio is slightly higher. There's a tug of war at 240, not much of a contest at 245, 250. Of concern is the plays at 230 and 225.
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Looks like I capitulated just in time. I closed all the rest of my bps that I’d been rolling and managing for over a year when we were around $280 a week or two ago for about 20-30% of max loss. I’m left with shares and a margin balance.
I’m considering trimming shares to cut the margin balance but it sure would be nice to do that after a decent recovery. Predictions of sub-$200 do give me pause and I might be better off just ripping the bandaid off now.
I have gained good day trading skills (expensively) and I expect I can build back gradually if I stick to the rules. For now I’m almost exclusively trading TSLA options and spreads but as Yoona and others have pointed out this stock is a little bit too wild and I am considering alternatives.
I everyone makes it through this mess and can reap rewards of profitable days ahead
I’m considering trimming shares to cut the margin balance but it sure would be nice to do that after a decent recovery. Predictions of sub-$200 do give me pause and I might be better off just ripping the bandaid off now.
I have gained good day trading skills (expensively) and I expect I can build back gradually if I stick to the rules. For now I’m almost exclusively trading TSLA options and spreads but as Yoona and others have pointed out this stock is a little bit too wild and I am considering alternatives.
I everyone makes it through this mess and can reap rewards of profitable days ahead
Knightshade
Well-Known Member
data point update-
Rolled the remaining 1/3rd of the -297.50 10/7s to 10/21 at $296.67 for about even... now even if the stock doesn't recover after ER I've saved myself over 80 cents a share on how underwater it'll be.... so I've got that going for me...
(also didn't sell any calls on the 2/3rds early assigned, assignment strike was so high the premiums were just painfully awful for anything that wouldn't lock in a loss right now and if ER -does- boost I'm fine just waiting a couple weeks for recovery on the share value)
Got an elementary question about the expected TSLA rally for Oct-Nov followed by a “major fall” in Dec-Jan. I’m trying to understand this pattern. If TSLA is truly worth the higher price that the rally will rise to (say 265-285), what justifies the drop back to 220 or even 180 shortly thereafter that so many are predicting for Dec-Feb 2023?
If it’s worth 285 in Oct/Nov 2022 why such a sharp decline so soon thereafter? And if it’s truly worth only 180 in Jan-Feb 2023, why would ppl bid it up to 285 right before the precipice fall. Unless this is how the markets work and big money makes $$ on both sides vs intrinsic stock value?
It doesn’t seem to make any sense hearing “we’re going up and then dooooown.” The reason from the up should be good enough keep it there one would think. And if there’s a boogieman behind the door at that price to justify a fall to 180 then it should never get to that price to begin with.
If it’s worth 285 in Oct/Nov 2022 why such a sharp decline so soon thereafter? And if it’s truly worth only 180 in Jan-Feb 2023, why would ppl bid it up to 285 right before the precipice fall. Unless this is how the markets work and big money makes $$ on both sides vs intrinsic stock value?
It doesn’t seem to make any sense hearing “we’re going up and then dooooown.” The reason from the up should be good enough keep it there one would think. And if there’s a boogieman behind the door at that price to justify a fall to 180 then it should never get to that price to begin with.
TA is just crayon drawings man. You don't need any reasoning behind it apart from enough people believe it to be true.Got an elementary question about the expected TSLA rally for Oct-Nov followed by a “major fall” in Dec-Jan. I’m trying to understand this pattern. If TSLA is truly worth the higher price that the rally will rise to (say 265-285), what justifies the drop back to 220 or even 180 shortly thereafter that so many are predicting for Dec-Feb 2023?
If it’s worth 285 in Oct/Nov 2022 why such a sharp decline so soon thereafter? And if it’s truly worth only 180 in Jan-Feb 2023, why would ppl bid it up to 285 right before the precipice fall. Unless this is how the markets work and big money makes $$ on both sides vs intrinsic stock value?
It doesn’t seem to make any sense hearing “we’re going up and then dooooown.” The reason from the up should be good enough keep it there one would think. And if there’s a boogieman behind the door at that price to justify a fall to 180 then it should never get to that price to begin with.
If the TA presented here is wrong and we rally up huge expect to see new crayon drawings in November saying we are in a bullish triangle pattern expect to see $400 soon. Just take it with a grain of salt and trade accordingly.
had to sell my jan2024 260 leaps to get out of margin deficit. at a slight loss, otoh been selling calls all this time covered by these so pretty much breakeven.
Hoping for a recovery.. its been a brutal drop.
Hoping for a recovery.. its been a brutal drop.
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FYI my 5x 280p and 5x290p Oct 7 just got assigned
edit- time to wheel it!
edit- time to wheel it!
Good traders don’t predict. They react to changing demand/supply channels. So anybody that says 183 is in play is mostly just throwing out random levels which they hope will stick.Got an elementary question about the expected TSLA rally for Oct-Nov followed by a “major fall” in Dec-Jan. I’m trying to understand this pattern. If TSLA is truly worth the higher price that the rally will rise to (say 265-285), what justifies the drop back to 220 or even 180 shortly thereafter that so many are predicting for Dec-Feb 2023?
If it’s worth 285 in Oct/Nov 2022 why such a sharp decline so soon thereafter? And if it’s truly worth only 180 in Jan-Feb 2023, why would ppl bid it up to 285 right before the precipice fall. Unless this is how the markets work and big money makes $$ on both sides vs intrinsic stock value?
It doesn’t seem to make any sense hearing “we’re going up and then dooooown.” The reason from the up should be good enough keep it there one would think. And if there’s a boogieman behind the door at that price to justify a fall to 180 then it should never get to that price to begin with.
Big money makes money from churn. They love to keep the volatility high and essentially get bulls on the short side and bears on the long side through margin calls, options etc. Rinse, repeat.
The thinking that gets me to this sort of dynamic - rising share price in Oct / lead in to earnings, and then fade / drop in the share price for the balance of the quarter - is largely driven by the negative macro. Leading into earnings the Tesla story dominates and the share price goes up. Out of earnings the Tesla story won't have meaningful new news and the macro negatives will come to the fore and take over.Got an elementary question about the expected TSLA rally for Oct-Nov followed by a “major fall” in Dec-Jan. I’m trying to understand this pattern. If TSLA is truly worth the higher price that the rally will rise to (say 265-285), what justifies the drop back to 220 or even 180 shortly thereafter that so many are predicting for Dec-Feb 2023?
If it’s worth 285 in Oct/Nov 2022 why such a sharp decline so soon thereafter? And if it’s truly worth only 180 in Jan-Feb 2023, why would ppl bid it up to 285 right before the precipice fall. Unless this is how the markets work and big money makes $$ on both sides vs intrinsic stock value?
It doesn’t seem to make any sense hearing “we’re going up and then dooooown.” The reason from the up should be good enough keep it there one would think. And if there’s a boogieman behind the door at that price to justify a fall to 180 then it should never get to that price to begin with.
That's not advice - just the way that I see things.
I expect that it would.
The key is the amount of extrinsic value in the option. I rolled 275s expiring this week out to the November monthly. That's about 5 weeks and keeping the strike the same got me about 6.50 incremental credit. Were those options to be assigned tomorrow then I can theoretically immediately sell the shares that I buy at 275, and that 6.50 extrinsic value I added was just given to me.
I think that we're all just guessing at just how little extrinsic value needs to be remaining for early assignment to be a real thing. I figure even .50 is too much to be early assigned but that's my guess. So I'll let those Nov 275s fade down to low extrinsic (which will either require a big drop from here, a big rise from here, and/or Mid November to arrive).
Also not - advice but I got myself stuck with some 760 puts awhile back. They started at 820ish, and 760 was as far down as I was able to roll them before the shares went into the 600s and even briefly the 500s. The mistake I made with them (these were csp) was that I was rolling week to week to postpone the reckoning. For 5 or 6 months. If I'd made a point of rolling 2-4 weeks at a time I would have at least been earning larger credits (2 week roll credit >2x 1 week roll credit when that far ITM) and I might have gotten some credit roll strike improvements.
That's why I have these 275 DITM csps the 1 month roll to the Nov monthly, instead of just 1 week. Sure the earnings might be such a blowout that they would let me close these, but in the past there was always something - the 6.50 credit works out to around $1/week and that's just fine for the outcome I'm trying to achieve.
Just look at the time value remaining. ie Share price minus strike price compared to the current Put value. For example an Oct28 -P300 has an intrinsic value at TSLA close $240.81 of 300-240.81 = $59.19. On the chain I see this P- listed as say mid as $60.3, so the intrinsic value is 60.3-59.19 = $1.11. So it has some value and may be safe but there is always the risk of potential exercise. Go out to Nov18 with a 300P- value of $62.10 and the extrinsic or time value becomes much healthier at $2.91.
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I did get assigned 22 x Nov18 $366.67 today that were part of some legacy 24 x 353.33/366.67BPS that had been rolled out a few times. This was in a cash only account so I chose to do an early exercise to clear the 353.33P+ rather than trying to time the sale of the 2200 shares and the P+ in the first few minutes of trading.
I'd managed to roll all of the Jan'23 366.67/400 BPS in that account out to Jan'24 so they now have a healthier extrinsic value at the cost of some maintenance margin.
I'd managed to roll all of the Jan'23 366.67/400 BPS in that account out to Jan'24 so they now have a healthier extrinsic value at the cost of some maintenance margin.
scubastevo80
Member
We touched $207-8 (split adjusted) in May and again in June. If we think there's more fed surprise and worse inflation prints, I wouldn't be surprised if we go lower than that. If the stock trades below $200, I'd like convert more shares to LEAPs. Worth noting is that the stock traded in the $208-250 range for about two months (mid-May to mid-July) then moved to $250-310 until the end of September. I'm hopeful 3Q earnings will push us back up, particularly as I watch my 10/21 293/260 BPS in horror.
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