I think @dl003 recently said that in this instance he doesn’t agree with Mauro’s count and we may have seen the bottom earlier at 104 area.
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Wiki Selling TSLA Options - Be the House
- Thread starter adiggs
- Start date
SpeedyEddy
Active Member
Market makers working hard to not loose too much tomorrow in the trillions-options-game (S&P related, incl TSLA AAPL AMZN), so I think the most of the pullback before ER will be seen next week, after closing @ 128.5-129.50 tomorrow. The rest really is up to ER, like @dl003 stated above. Or NFLX ER must be superbad..., then $TSLA $122 is possible still this week.
Ah thanks for reminding me about NFLX ER, it could easily drag us down 2-4% tomorrow. I am worry more about my -p123 than my -c128.33 now. But it's okay either way to loose share to get assigned though. But best if it can close between that range.
It appears the price pattern today is similar to yesterdays ... the lows occurred early afternoon. I'm looking for a BPS set point for tomorrow or next week.
SebastienBonny
Member
Those are for this week. Look at 01/27…
Even 100 -p and 150 -c above 0,50 while 20% OTM now.
bballshinobi
Member
Ah ok, you are right. $150 call for next week is going for $1.00.
SebastienBonny
Member
Yes they seem tempting, but we could get to the upside and downside fast if earnings moves the SP 10% in a heartbeat.
bballshinobi
Member
It feels like a lot of bad news are already priced in with the stock at $125, but we did rally 25% off the low so it's definitely possible we sell back down to the $100-110 again just for the sake of profit taking.
EVNow
Well-Known Member
Delta is 13% for C150 - suggesting market assigns 13% chance of getting over $150.
Don’t forget to to BTO any option the morning of the earnings and let it gain value with IV going up and tell them gain in value and STC just before market closes. That’s what I told myself I was going to do last earnings.
correct. While I think new lows are possible, they don't need to happen like Mauro said. Today we partially filled the gap at 124 but before NFLX ER and leap opex is over tomorrow we may go down still. In fact if was a betting man I'd say we will go down as this is looking more and more like a bear flag; nothing major though. Momentum on the hourly timeframe is slowly but surely turning bearish. Daily momentum is squeezing with no clear direction into ER. I can't say hedging here is a brilliant idea; prudent yes but not brilliant. Maybe short 160C and buy 110/100P exp 1/27. It will cost about 0.4 - 0.45 for about $10 of downside protection. If the stock shoots up, 160 should be tested several times and give you the opportunity to roll the calls out.I think @dl003 recently said that in this instance he doesn’t agree with Mauro’s count and we may have seen the bottom earlier at 104 area.
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EVNow
Well-Known Member
I've tried that and lost money - because SP went down.
Always - there are 3 things that affect premium. SP, IV & Theta. Even if IV goes up, SP going down can hurt you. There is no "free lunch".
SebastienBonny
Member
Buy put AND call.
SP down, put up in value.
Couldn’t that work out?
market and TSLA heading green now.
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The upside with a strangle is very small. You basically need a huge move in one direction, like at least a 10-15% move to make any kind of money. ITM calls/puts might be a better option but then you are risking so much.
For eg: let's look at the Jan 27 +125 call/+135 Put strangle for 20$. I need Tesla to either be below 115 or above 145 to just break even. IMO it's a losing strategy and I'm saying this from experience. The only options I buy for short term are puts when key technical levels get taken out and that is because of macro and ER uncertainty. Even buying puts is a losing game but for key events it's insurance money that I'm willing to lose.
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Today -
Closed out my 01/27 $150 CC's - sold in 2 batches (last Friday and Tuesday) for $1 each and $1.6 each - closed for $0.90 each today.
Total gained was $0.55 each. Not amazing but seeing them at $3+ yesterday had me thinking about closing them if the opportunity presented.
Will look to open again tomorrow or Monday.
Today STO $115P for 01/27 for $3 each - Medium position - looking for more tomorrow to fill this out.
Closed out my 01/27 $150 CC's - sold in 2 batches (last Friday and Tuesday) for $1 each and $1.6 each - closed for $0.90 each today.
Total gained was $0.55 each. Not amazing but seeing them at $3+ yesterday had me thinking about closing them if the opportunity presented.
Will look to open again tomorrow or Monday.
Today STO $115P for 01/27 for $3 each - Medium position - looking for more tomorrow to fill this out.
No that's not how ITM chances are calculated. Bell curve
Key number is the one standard deviation move. I don't do a lot of research into this but the basics I get. Since the dealers already calculated it and used it to price options, a shortcut that traders frequently use is (ATM call premium + ATM put premium) * 0.85 = 1 standard deviation
For example, as I'm typing this, 1/27 128C + 128P = $14. $14 * 0.85 = $11.9. It means the stock has 68% chance of remaining in the 116.1 - 139.9 range (-/+ 1 standard deviation), 95.4% chance of remaining in the 104.2 - 151.8 range (-/+ 2 standard deviations). Which means only 2.2% chance of going over 151.8. There is a formula to calculate the chance of over/under any certain strike but
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EVNow
Well-Known Member
I had read about the delta being chances of being ITM long time back. To confirm I just searched - and I got dozens of confirmation within minutes ... here are a couple of them.
Weighing the Probabilities: Options Delta, Options Probability, and Other Risk Analytics - Ticker Tape
https://www.cmegroup.com/education/courses/option-greeks/options-delta-the-greeks.html
Nflx popping green after hours. Could bode well for market tomorrow.
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