So I have Jan 23 600/800 BPS. I somehow have not been worried about these, but now I’m thinking there is something wrong with my wiring and I should take some conservative move to roll them out further.
Would you:
1) roll right now
2) roll on the next stock climb (10-20%)
3) you think stock will climb above 900 at some point before end of year so deal with it then
4) don’t do anything, stock will be above $740 (break even point) at expiration
Thoughts?
These are cash secured so no margin concerns. I do have some long term and short term cap gains this year so maybe I should definitely roll a portion just to zero those out, and wait and see on the rest.
Most scenarios I would be okay unles the stock price stays this low or lower until Jan 23.
I would think inflation easing up will jolt markets up before then but WTF I’m no macro expert!
Well apparently being mostly right about inflation easing isn't enough. I forgot that I am definitely not a FED nor Elon & Twitter expert.
I am an idiot. These things were 25% in the green in September. I thought about closing out and getting rid of them, but I prefered to not accrue more capital gains this year thinking I could just wait until January. Greed and trying to trade around tax timing have gotten the best of me.
Even a month ago, these now 200/266 BPS were at a loss but at a stable point when the stock was ~ $220-230. At that price, the time decay wouldn't hurt nor help, the loss would be similar near expiration. I could be comfortable at that point being patient, even if the share price didn't recover, I could roll the position. But the stock dropping 20% over the last month while SPY is actually up is a killer.
Now the position is at a major loss, and extremely sensitive to share price swings. I am trying to get an opinion of what range of share prices you expect to see over say the next month. The stock price being at $180, $200, or $220 are big differences for how much is lost when closing this position.
So that's all the bad news. On the bright side, it was
only (only?) a quarter of my total trading funds. The 1/2 in IRAs are looking good for the long term. The other 1/4 was in the same taxable account holding shares. Regardless of this trade, I was thinking about converting those to LEAP call spreads. Since I'm at such a loss with the BPS, I don't have to worry about tax considerations when I sell the shares and convert to LEAPS.
So I am thinking about basically closing all positions and combining the total residual value into some combination Jan 24, June 24, Jan 25 call spreads somewhere in the range of $200/$400 to $250/$400.
These would approximately give me a 5x to 6x return, which would easily put me in a better position than I would have been if the BPS had been profitable and cashed out and the rest held as shares. So if successful, I will be even better off.
Of course there is risk (I mean who would have thought we'd be this low now?) but I'm feeling confident (too confident?) about these. With solid earnings growth and the FED stopping interest rate hikes at somepoint next year, I think think TSLA will likely be at least above say $280 in a year and a half?
Sorry for the long post, but it's a lot of money for me. 1) Thoughts on when best to close this Jan 23 200/266 BPS (what will TSLA max be in next month?) and 2) How dumb are my LEAP call spread ideas?
