Wiki Selling TSLA Options - Be the House

[scubastevo80]

Need not advice - anyone care to share what they would do with a 293/260 BPS expiring next week? Trying to find rolls out and up but hard to find anything that isn't adding more risk and costing a significant amount. Time to just eat it given the current market environment?

 

[JustMe]

Need not advice - anyone care to share what they would do with a 293/260 BPS expiring next week? Trying to find rolls out and up but hard to find anything that isn't adding more risk and costing a significant amount. Time to just eat it given the current market environment?

If it looks like we are heading down , consider buying back the short put. You’ll reduce your loss by $1 for every $1 the sp drops as the long leg increases in value. Sell the short put when you think we are near the bottom.

However- this clearly could increase your loss if your timing is bad and the sp suddenly recovers, lowering the value of the short leg.

I would only recommend trying this on days with relentless selling where the trend is obvious. My success trying this is mixed.

 

[dl003]

Need not advice - anyone care to share what they would do with a 293/260 BPS expiring next week? Trying to find rolls out and up but hard to find anything that isn't adding more risk and costing a significant amount. Time to just eat it given the current market environment?

If I had the money, I would sell the buy leg, get the sell leg assigned to me, and wait for a bounce to sell the share at a favorable price. 300+ in 2023.

Edit: What @JustMe suggested also works, if more damage isn't done first thing Monday. If we open down huge, there's really no point closing the short leg anymore.

 

[BornToFly]

Dude what are you doing? I thought earlier this year you said you were going to keep it conservative.

Tesla is not going to be at 200 by June 2024 come on. Those are going to be disaster out for you.

How much money have you loss in total from doing options? Maybe you should just keep to covered calls after tesla overtakes apple in market share or anytime tesla goes up 20% in a 30 day range.

Yes, I completely F'd up in January when the stock looked like it was going to pass its ATH. I was making so much money on BPSs that I sold too many, and then I didn't take losses early enough and close them all because I didn't think we would drop below 1000. If I get out of this mess, I will never do BPSs again.

You said Tesla is not going to be at 200 2024. You think in 1.5 years of growth the stock will be lower? I'm trying to understand what you meant.

 

[dl003]

Yes, I completely F'd up in January when the stock looked like it was going to pass its ATH. I was making so much money on BPSs that I sold too many, and then I didn't take losses early enough and close them all because I didn't think we would drop below 1000. If I get out of this mess, I will never do BPSs again.

You said Tesla is not going to be at 200 2024. You think in 1.5 years of growth the stock will be lower? I'm trying to understand what you meant.

apologies since I haven’t follow this thread in a while. What is your exact current situation? Do you have portfolio margin?

 

[BornToFly]

If I close all the Jan 2024 BPSs now, and sell shares to do it, I essentially take max loss on them and lose $13M. If I sold $13M worth of shares (which should generate a tax bill) and went to cash, then they become cash backed, and I get my $13M back once they expire worthless in 2024.

 

[BornToFly]

apologies since I haven’t follow this thread in a while. What is your exact current situation? Do you have portfolio margin?

I asked Fidelity about portfolio margin, but since I'm 100% Tesla, they said it wouldn't help/wasn't an option.

 

[dl003]

If I close all the Jan 2024 BPSs now, and sell shares to do it, I essentially take max loss on them and lose $13M. If I sold $13M worth of shares (which should generate a tax bill) and went to cash, then they become cash backed, and I get my $13M back once they expire worthless in 2024.

how many do you have?
what are the strikes?
how big is the mess compared to your account balance % wise?

Regardless, I would open an IBKR PM account and expedite a transfer. Fidwlity simply is not equiped to help you deal with this. it will keep happening throughout this bear market.

 

[mongo]

You said Tesla is not going to be at 200 2024. You think in 1.5 years of growth the stock will be lower? I'm trying to understand what you meant.

I think they were referring to this:

and then do the CC for 200 strike (for $60) at that point....?

 

[BornToFly]

how many do you have?
what are the strikes?
how big is the mess compared to your account balance % wise?

Regardless, I would open an IBKR PM account and expedite a transfer. Fidwlity simply is not equiped to help you deal with this. it will keep happening throughout this bear market.

Sending you a PM

 

[BornToFly]

I think they were referring to this:

Aah. I can buy the CC back at a small loss if the SP starts climbing, and sell them again with a stop loss order if the SP drops.

 

[ChefBoyardee]

Hey all, long time no see - just an FYI that I've had multiple Jan 2024 BPS short legs assigned in the last week. The latest were 533.33's yesterday after hours. I'm going to exercise the 516.67 long legs on Monday morning since the spread is bigger than the extrinsic value lol. If you have that strike and get assigned Monday, maybe it's me

If you have some rolled BPS, you might want to check the extrinsic and maybe swap it for the equivalent call spread. I'm going to be doing that with some of my remaining ones

 

[juanmedina]

apologies since I haven’t follow this thread in a while. What is your exact current situation? Do you have portfolio margin?

Do you have general advise for those with portfolio margin?

 

[vikings123]

Aah. I can buy the CC back at a small loss if the SP starts climbing, and sell them again with a stop loss order if the SP drops.

Be careful with this kind of approach/thinking. You are making an assumption that we have seen the lows. There will more volatility and/or some big investor will see the opportunity and jump in.

I agree with other poster that you need IBKR, only problem is it takes 2-3 days for the transfer. So keep that in mind.

 

[adiggs]

Need not advice - anyone care to share what they would do with a 293/260 BPS expiring next week? Trying to find rolls out and up but hard to find anything that isn't adding more risk and costing a significant amount. Time to just eat it given the current market environment?

In a somewhat similar circumstance early in the year I decided to eat the loss to protect capital. In my case that meant selling a $150 wide spread for $20 (losing $130 out of max $150). Whether that's a good idea for you of course I have no idea.

But one thing to look for and evaluate - spreads don't behave the same as csp when DITM. Very, very differently. What I found was that whether I was rolling a week, a month, a quarter, or a year - the debit / cost of the roll was very similar. One of the reasons I took the loss is that I was about to pay $10 or something to keep the $150 wide spread alive and hope to get back some of that loss. If we weren't recovered then I'd get to pay again to keep it alive longer, and could just keep feeding cash into the nearly max loss position, and with bad luck - grow my max loss beyond max loss.


So - if you do decide to roll, evaluate every date / DTE that you think desirable and see how they differ in price. In my case it was about $10 (or whatever the amount actually was) whether I was rolling a month or many months.

Conceptually the incremental time value you're receiving in the roll is nearly the same incremental time value that you are paying for in the roll. Since the long put is the closest to the money it has more time value and that's what you're buying. Those two values are moving together very closely (again DITM), and its the difference that you're paying the debit for.


Best of luck - and I wouldn't wait for Thursday to make up your mind. That 293 short put is too likely to get early assignment with its time value approaching 0.

 

[dl003]

Do you have general advise for those with portfolio margin?

Yes:

Buy cheap weekly puts to reduce your margin requirement.
Take advantage of every bounce to flip already sold puts to short calls. Go max strike & exp - 610c 1/2025. Dont think about how long its going to take to exp or how much time you are going to lose. the damage has been done and this bear market is vicious. Now is the time to protect your account. Do the flipping until TSLA has touched 195.
Buy SQQQ calls & shares on margin and buy cheap weekly SQQQ puts to erase the extra margin incurred. Do this until SQQQ has hit 80.

I feel very badly for not having warned you of this decline since early September. If you are not too underwater and/or already hedged, dont panic. We are close to a bottom, provided ER doesnt disappoint.

 

[Buckminster]

Do you have general advise for those with portfolio margin?

Buy Nikola stock?

 

[ZeApelido]

Hey all, long time no see - just an FYI that I've had multiple Jan 2024 BPS short legs assigned in the last week. The latest were 533.33's yesterday after hours. I'm going to exercise the 516.67 long legs on Monday morning since the spread is bigger than the extrinsic value lol. If you have that strike and get assigned Monday, maybe it's me

If you have some rolled BPS, you might want to check the extrinsic and maybe swap it for the equivalent call spread. I'm going to be doing that with some of my remaining ones

Yes this happened to me with June 2024 200/500 BPS, the 500s were assigned, I was not expecting that. I'm going to close out the other leg and convert to bull call spread with same strikes.

Meanwhile, I am starting to get nervous for my Jan 23 200/267 Bull PS. My breakeven is like $245. Still 3 months to go, I don't feel terrible (but definitely don't feel good), but they are massively in the red and could easily get wiped out. I'm staying put for now, but really kicking myself for not closing them out when we were above $300 and they were 25% of full potential profit.

 

[juanmedina]

I have 230/170 Jan 23 BPS with a break even of $217 and I am not feeling too confident. From Troy's post it seems that Q4 would be a miss on deliveries and you know how kind WS is to Tesla.

 

[Max Plaid]

I have 230/170 Jan 23 BPS with a break even of $217 and I am not feeling too confident. From Troy's post it seems that Q4 would be a miss on deliveries and you know how kind WS is to Tesla.

Sure, I think it's wise to always prepare and guard against the worst-case scenario, but on the other hand, look like WS has already priced-in a lot of "miss" the last two weeks... who knows?

I'm shifting to a very low-risk approach for the moment