Wiki Selling TSLA Options - Be the House

[SebastienBonny]

Just sold 28/10 230 CCs

I love having CCs in play. When the stock goes down it makes me happy because they become profitable. When I think about rolling them it means the underlying is doing well.

Just did the same for 1.60.
Brought cost base of the underlying back to 260, so worst case this will need a two week roll to that strike.
I share your opinion, these aren’t long shares and when stock price rises those long shares profit as well.

 

[Yoona]

if today's Close is 270, there is a chance of earnings week (Fri Close) being 216-324

today's Close=214 is only 2 off the 216 guestimate 21 days ago

in 3 out of the last 4 TSLA Earnings, -20% to +20% is the safe OTM

TSLA Performance Before P&D Press Release to Earnings Week Friday Close

 

[samppa]

IBKR just liquidated my jan25 -320 puts. Took a big loss on these.
Looks like their risk analysis decided that they were too risky.. brought my cash balance negative and I had to sell some shares to bring it back to positive.

Uhh..

 

[Max Plaid]

IBKR just liquidated my jan25 -320 puts. Took a big loss on these.
Looks like their risk analysis decided that they were too risky.. brought my cash balance negative and I had to sell some shares to bring it back to positive.

Uhh..

What is it with these US brokers dicking about with people's portfolios? My broker doesn't care what I do as long as I don't go into a negative cash situation... weird! And how can you judge a share-price risk from here to Jan 2025???

For my side, I'l trying something else different, sold 15x Jan 24 -c250's against Jan 24 -c233 LEAPS - expecting some red next week and already put in a GTC sell, as it is, sitting on a -50% loss on those LEAPS so may as well put them to work

 

[Right_Said_Fred]

What/who's criteria/blessings are required in order to make this a TMC sticky thread

Not necessary. This thread is so active that it’s usually #1 or #2 in the list of regular threads.

 

[samppa]

What is it with these US brokers dicking about with people's portfolios? My broker doesn't care what I do as long as I don't go into a negative cash situation... weird! And how can you judge a share-price risk from here to Jan 2025???

For my side, I'l trying something else different, sold 15x Jan 24 -c250's against Jan 24 -c233 LEAPS - expecting some red next week and already put in a GTC sell, as it is, sitting on a -50% loss on those LEAPS so may as well put them to work

What broker do you use?

I've only found IBKR that offers us options here. In hindsight, I should have never gotten into this game at all.. now I really need to consider what I will do.

 

[mb300sd]

Closed everything a little too early today, should have held to expiration but it kept looking like it would run out of steam and retrace. Profits are profits though, can't complain too much.

 

[Oil4AsphaultOnly]

Took a gamble and flipped my underwater 11/18 -255p into a few 10/28 -215c's to try to take advantage of the fear of Elon's TWTR buy. If it doesn't pan out, at least I can still roll them out and hopefully bring my other ITM CSP's back OTM.

 

[OrthoSurg]

I refuse to sell CCs down here, although I am sorely tempted because it would be great to offset all my bullish positions. But IMO the more tempted I am to sell them, the better the chance is that we are at a low. The logic that "at least the rest of my portfolio will be up" is true and at least the margin call risk isn't there, but carrying DITM CCs is only slightly less annoying than holding DITM short puts, especially for a bull.

I've had my face ripped off a few times and, yes, there are situations where you can't roll your way up - a gap up on a Monday forces you to roll to the following week, but it keeps going past the new strike and then you sit on it hoping the stock will come back down but it doesn't. The same reason a lot of us are stuck with DITM short puts, but in reverse.

Recall exactly one year ago, the Monday after Q3 results was the Hertz rally. I had -c1000 and we were barely at 900 or so the previous Friday and they still flew by my strike on the way to 1200. Would have been a great time to let them exercise, in hindsight.

The way I have been managing CCs during steep rise is rolling over and out 2 weeks out for a $1 credit and trying to improve my strike of $20 since the split or $60 pre split.
If I have to roll again the week after then we are in a short bull trend then in March I rolled 6 months out for a 50% strike improvement at a price I would have been happy to sell at $1500 pre split. When the SP started dropping again and it was gaining bear momentum I rolled back in.

There is also the option of rolling 1 year out to improve your strike of 100% if you think there will be a crazy bull run however you need to do that as soon as your strike gets ITM because if you wait to long then it’s over there is no way to improve a strike price decently when DITM.

I do not need the regular income of CCs so I do not care to sacrifice the couples weeks of no income when there is a sharp rise but I do understand for option sellers who want regular income or is not a good time to sell close ITM CCs because they could get steam rolled at anytime.

 

[intelligator]

Took a gamble and flipped my underwater 11/18 -255p into a few 10/28 -215c's to try to take advantage of the fear of Elon's TWTR buy. If it doesn't pan out, at least I can still roll them out and hopefully bring my other ITM CSP's back OTM.

How does that work? You BTO a 11/18 -255p and STO a 10/28 215c? It's a debit 1:1 and get's worse 1:2 or more. Maybe I don't have this setup correct.

Custom | OptionStrat Options Profit Calculator

Calculate potential profit, max loss, chance of profit, and more for custom options and over 50 more strategies.

optionstrat.com

 

[juanmedina]

Took a gamble and flipped my underwater 11/18 -255p into a few 10/28 -215c's to try to take advantage of the fear of Elon's TWTR buy. If it doesn't pan out, at least I can still roll them out and hopefully bring my other ITM CSP's back OTM.

I am curious, why not just keep on rolling the -255p? I have -280p for December and I would have to sell 4x $215 for December break $235 to flip the put. Maybe I am still too bullish lol.

 

[vikings123]

What is it with these US brokers dicking about with people's portfolios? My broker doesn't care what I do as long as I don't go into a negative cash situation... weird! And how can you judge a share-price risk from here to Jan 2025???

For my side, I'l trying something else different, sold 15x Jan 24 -c250's against Jan 24 -c233 LEAPS - expecting some red next week and already put in a GTC sell, as it is, sitting on a -50% loss on those LEAPS so may as well put them to work

I can't speak for @samppa but he probably came very close to his maintenance margin. IB does not issue margin calls, they will liquidate it for you.

@samppa Did they give you any warning or an indication that this was going to happen?

 

[Oil4AsphaultOnly]

How does that work? You BTO a 11/18 -255p and STO a 10/28 215c? It's a debit 1:1 and get's worse 1:2 or more. Maybe I don't have this setup correct.

Custom | OptionStrat Options Profit Calculator

Calculate potential profit, max loss, chance of profit, and more for custom options and over 50 more strategies.

optionstrat.com

It's more like 1:7 for $6 credit. And it's a BTC the -255p. I had calls available to write, because I was expecting a pop of the SP pre earnings that didn't really materialize. It's a gamble.

 

[Oil4AsphaultOnly]

I am curious, why not just keep on rolling the -255p? I have -280p for December and I would have to sell 4x $215 for December break $235 to flip the put. Maybe I am still too bullish lol.

After having puts early exercised against me, and everyone with any puts in the 300 range also getting early-exercised, the DITM puts were making me VERY nervous. And if macros cause the SP to tank next week, I might get margin called, so I needed to free up margin to build a buffer.

The fear of the TWTR deal seemed like a good time to risk it. Once Oct 28th is reached, as long as there's no nuclear war, the SP "should" bounce, ergo the gamble.

 

[OrthoSurg]

IBKR just liquidated my jan25 -320 puts. Took a big loss on these.
Looks like their risk analysis decided that they were too risky.. brought my cash balance negative and I had to sell some shares to bring it back to positive.

The more I read about IBKR the more I don’t like about their “Interactivness”
Uhh..

 

[JustMe]

The way I have been managing CCs during steep rise is rolling over and out 2 weeks out for a $1 credit and trying to improve my strike of $20 since the split or $60 pre split.
If I have to roll again the week after then we are in a short bull trend then in March I rolled 6 months out for a 50% strike improvement at a price I would have been happy to sell at $1500 pre split. When the SP started dropping again and it was gaining bear momentum I rolled back in.

There is also the option of rolling 1 year out to improve your strike of 100% if you think there will be a crazy bull run however you need to do that as soon as your strike gets ITM because if you wait to long then it’s over there is no way to improve a strike price decently when DITM.

I do not need the regular income of CCs so I do not care to sacrifice the couples weeks of no income when there is a sharp rise but I do understand for option sellers who want regular income or is not a good time to sell close ITM CCs because they could get steam rolled at anytime.

I have been stuck with DITM CCs a couple of times. One thing that can help is to sell bps at or below the CC. Use the proceeds to raise the strike price of a CC.

Be careful of course. Earlier this year I ended up with under water BPS and DITM CCs bad combination!

Focus on rescuing one CC at a time.

 

[Oil4AsphaultOnly]

I have been stuck with DITM CCs a couple of times. One thing that can help is to sell bps at or below the CC. Use the proceeds to raise the strike price of a CC.

Be careful of course. Earlier this year I ended up with under water BPS and DITM CCs bad combination!

Focus on rescuing one CC at a time.

Actually, selling BPS above the CC (or CC below the CSP) and using the proceeds to raise/lower the strike price works far faster. Adiggs mentioned it near the beginning of this thread, and I've been using it to "fix" my underwater options for almost this entire year!

Edit: It's just that we whip-sawed between Hertz, then Elon selling shares to pay taxes, and then FOMO, and then recession fears MUCH TOO QUICKLY for me to rescue all my positions. I need to learn more patience.

 

[Yoona]

Actually, selling BPS above the CC (or CC below the CSP) and using the proceeds to raise/lower the strike price works far faster. Adiggs mentioned it near the beginning of this thread, and I've been using it to "fix" my underwater options for almost this entire year!

"selling BPS above the CC" !

can you give an example? TIA!

 

[Oil4AsphaultOnly]

"selling BPS above the CC" !

can you give an example? TIA!

So I have a DITM 11/04 -280p to start.

I would need a $4.95 debit to roll to 11/11 -275p,
or a $1.22 debit to roll to 12/16 -276.67p,
or a $1.65 credit to roll to 1/20/2023 -276.67p

JustMe is advocating selling covered calls to help facilitate this roll. But 11/11 -275c are selling for only $0.50, so only the 12/16 -276.67 roll would be viable for a net credit.

What I'm suggesting is to sell the 11/11 -230c (for $6.30) with the 11/11 -275p roll to get a net credit. If the SP rises quickly, then while the CC becomes ITM, the CSP will be less ITM so that the next roll into 11/18 (or the following weeks) will have a greater chance of falling OTM (for both options). If fortune is in your favor, then the CC will stay OTM and you can roll the 11/11 -275p into 11/18 -270p with whatever CC gives you enough credit to still have a net credit for the roll. If you're unlucky, then once the underwater CSP becomes OTM, the CC becomes DITM and you'll have to "fix" it with your now available margin - which was what I was in the middle of doing before the bear-market rally faltered and all my CSP's became DITM!

So it's kind of a question of whether you think the SP would rise quickly or slowly?

 

[samppa]

I can't speak for @samppa but he probably came very close to his maintenance margin. IB does not issue margin calls, they will liquidate it for you.

@samppa Did they give you any warning or an indication that this was going to happen?

I had been flying pretty close to the maintenance margin - too close - and now they suddenly liquidated a bunch. Somehow the algo decided that those protective puts I had bought were not enough anymore..

Pretty much the whole year down the drain.

Well at least I'm not broke.

I'm going back to work and taking a break from options.

Edit: after some more thoughts, my problem with trading options is I'm really averse to taking a loss. I try to avoid it till the very end, try to pull rescue moves etc.. this works until it doesn't, and then when it doesn't the loss has multiplied.