@BornToFly I’m still worried about TSLA filling the $146-$160 gap from 1/25, so my non-advice would be to buy +p150s, probably at least beyond earnings. Only $7.55 for May p150s. Also, FWIW, it looks like somebody else is already betting on those puts.
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Wiki Selling TSLA Options - Be the House
- Thread starter adiggs
- Start date
Thanks. The confusion comes from the fact that you added the two credits whereas I would have taken the average of the two.
Re Option 3 -- I think if you can wait, I would wait until CPI -Tues and FOMC - Wed next week. There will probably be big market moves. Aside from SP, the main issue I see is VIX/IV. If there is volatility crush next week after FOMC, then your calls will be worth a lot less after you bought them.
scubastevo80
Member
Non-TSLA trade - I sold FRC 4/21 $20 puts this morning for north of $7 a pop. IV was around 350% and my net purchase price would be under $13/share. The stock is trading like the company is heading towards an equity wipe-out even and after the news the FDIC/Fed will step in and backstop to some degree, I think they go higher or get bought at a premium to the strike price, as I think the Fed will take a page out of the 2008 playbook (let a few fail and force the others to make deals).
I would just caution that while this looks great there is no downside protection. FRC could go the way of SIVB. Just be very careful, none of us in this group know what's really going with the banks. Maybe there is more damage than they are making us believe.
edit: Not sure what happens to the stock if it gets halted and FDIC takes control of the bank.
OK, I'll bite: BTO 20x Jan 25 $CS c0.90's @$1.71 -> pretty sure they'll be rescued by the Suisse bank, the old "too big to fail" argument, doesn't need much upside to make a profit there and could sell calls for the next two years from that DITM strike
Just for entertainment more than anything
Just for entertainment more than anything
Man. Aggressive $2-3 stock price moves up and down in TSLA this morning very quickly. Sure seems like $200 would have been in reach tomorrow if we didn't have yet another potential Black Swan looming with the banks. It has just been one thing after another over the last year....
I like this gamble! Gonna copy it! But going for shares instead of LEAPs, since CS pays a dividend, so might as well collect some while selling cc's.
Closed 170/160 and 160/150 bps expiring tomorrow at .11 and .03. These were rolls from a previous week and landed me in a good net income position for both weeks.
That leaves me with 1 remaining roll that expires next week - 165/155s.
These were making me unhappy at the beginning of the week, but I find the US reaction to the 2 banks to be aggressive and appropriate. I haven't read about any golden parachutes - only executives canned on the spot, and investors left holding the bag of whatever is left over. Meanwhile depositors get immediate access to their money.
The only bit that I worry about is the moral hazard that arises from depositors getting their money back regardless of the theoretical limits on deposits. It sets a precedent that the deposit limit is irrelevant - that all deposits are FDIC insured. On balance I'm ok with that - it suggests to me though that the insurance rates are inadequate to actually insure deposits at the correct level, and that is a longer term problem. If the insurance rates collected are inadequate for this level of protection, that represents a systemic risk to the bank system as tax payers continue to be the ultimate back stop. For those in the banking industry, knowing that your risk is ultimately born by tax payers frees one up for all sorts of bad behavior. This is important MHO, but also relatively minor at this moment in time.
Actually impressed with just how fast and efficiently depositors got access to their money. No delay, measured in bank business hours time, that I saw.
At these low 180s levels, I still consider this to be good times to be selling BPS. That doesn't come from any deep TA - just my larger read that the share price is roughly 550 in pre-split terms, and that was a level that could just be barely pushed down to multiple quarters ago. We can always go lower, but I see much higher risk to the upside from selling calls than I see risk to the downside from selling puts / put spreads.
Probably waiting for tomorrow though to open the next batch, under my trading rule "close today, open tomorrow". There's a different rule that also applies "open puts on down day" that is really "open puts at a relatively low price". I think that even with the shares up today that qualifies as "relatively low price - so could open the replacements today.
That leaves me with 1 remaining roll that expires next week - 165/155s.
These were making me unhappy at the beginning of the week, but I find the US reaction to the 2 banks to be aggressive and appropriate. I haven't read about any golden parachutes - only executives canned on the spot, and investors left holding the bag of whatever is left over. Meanwhile depositors get immediate access to their money.
The only bit that I worry about is the moral hazard that arises from depositors getting their money back regardless of the theoretical limits on deposits. It sets a precedent that the deposit limit is irrelevant - that all deposits are FDIC insured. On balance I'm ok with that - it suggests to me though that the insurance rates are inadequate to actually insure deposits at the correct level, and that is a longer term problem. If the insurance rates collected are inadequate for this level of protection, that represents a systemic risk to the bank system as tax payers continue to be the ultimate back stop. For those in the banking industry, knowing that your risk is ultimately born by tax payers frees one up for all sorts of bad behavior. This is important MHO, but also relatively minor at this moment in time.
Actually impressed with just how fast and efficiently depositors got access to their money. No delay, measured in bank business hours time, that I saw.
At these low 180s levels, I still consider this to be good times to be selling BPS. That doesn't come from any deep TA - just my larger read that the share price is roughly 550 in pre-split terms, and that was a level that could just be barely pushed down to multiple quarters ago. We can always go lower, but I see much higher risk to the upside from selling calls than I see risk to the downside from selling puts / put spreads.
Probably waiting for tomorrow though to open the next batch, under my trading rule "close today, open tomorrow". There's a different rule that also applies "open puts on down day" that is really "open puts at a relatively low price". I think that even with the shares up today that qualifies as "relatively low price - so could open the replacements today.
scubastevo80
Member
I'm aware and its a small trade that I'm likely not going to hold overnight. It was also a poor choice of stock vs options - the option is up 25% as of right now, but the stock is up about 50% from where I could have got this at the open.
not-advice
More of a risk management technique for me as I am also withdrawing from my accounts for retirement living expenses - I've built a CD ladder using end of quarter expirations that now goes out to end of December (i.e. quarterly expenses through Q1 of next year). I started this 6 months back, give or take.
One dynamic I find interesting is that I see the interest rates in action. The original cd's roll off at end of March and then June and that will be all of them. Those are paying 2.5% ish.
The new cd's I've bought are all right around 5.00% (some 4.9s, some 5.2s). 5% for lending out my money for as much as 9 months - money I'll need then for living expenses, so putting it at least somewhat out of reach now is a good idea, strikes me as a good thing.
Whether this is the best way to handle this sort of future living expenses / emergency cash fund or not, I like the dynamic. And most importantly - it provides a lot of emotional stability as I'm making trades today that will turn into living expenses next year; not something I need for living expenses right now, so I can be up and down, as long as I'm more up than down over a wider time period than a single trade.
More of a risk management technique for me as I am also withdrawing from my accounts for retirement living expenses - I've built a CD ladder using end of quarter expirations that now goes out to end of December (i.e. quarterly expenses through Q1 of next year). I started this 6 months back, give or take.
One dynamic I find interesting is that I see the interest rates in action. The original cd's roll off at end of March and then June and that will be all of them. Those are paying 2.5% ish.
The new cd's I've bought are all right around 5.00% (some 4.9s, some 5.2s). 5% for lending out my money for as much as 9 months - money I'll need then for living expenses, so putting it at least somewhat out of reach now is a good idea, strikes me as a good thing.
Whether this is the best way to handle this sort of future living expenses / emergency cash fund or not, I like the dynamic. And most importantly - it provides a lot of emotional stability as I'm making trades today that will turn into living expenses next year; not something I need for living expenses right now, so I can be up and down, as long as I'm more up than down over a wider time period than a single trade.
Now its First Republic Bank in the news needing liquidity. Also in the report was a comment about the hedge fund / shorts going after regional banks. I don't know the sector and it may well be that these have become marginal businesses.
Somehow though I think that this is as much the efforts of the short sellers to create the perception of crisis - it has me wondering if / when it'll be the hedge funds that are identified as a systemic risk to the financial system. They don't need to be the only one - but adding their behavior to the list might be a decent sized step to ending that risk.
I think that a big chunk of that systemic risk can be ended with something as simple as the uptick rule being in place full time, for all issues. This also has the benefit that we won't be relying on enforcement by the SEC to implement this.
I wouldn't mind seeing an end to the dark pool trades. Put all trades on the open market and it'll move where it moves based on satisfaction of actual supply and demand, rather than hiding those trades away.
Somehow though I think that this is as much the efforts of the short sellers to create the perception of crisis - it has me wondering if / when it'll be the hedge funds that are identified as a systemic risk to the financial system. They don't need to be the only one - but adding their behavior to the list might be a decent sized step to ending that risk.
I think that a big chunk of that systemic risk can be ended with something as simple as the uptick rule being in place full time, for all issues. This also has the benefit that we won't be relying on enforcement by the SEC to implement this.
I wouldn't mind seeing an end to the dark pool trades. Put all trades on the open market and it'll move where it moves based on satisfaction of actual supply and demand, rather than hiding those trades away.
EVNow
Well-Known Member
Without getting too OT - all this happened because "regional" banks successfully lobbied to rollback Dodd-Frank regulations during last administration and senators from both parties voted for it. Budget Management office actually wrote that the rollback makes failure of a 100 to 200 Billion bank likely. See what happened just a few years out.
They need to strengthen the regulations if anyway these banks are not allowed to fail. Atleast let them be managed properly and insured and go through stress test regularly.
ps :
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Mod: further banking discussion in the main thread.
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Update -
Sold all the CS calls today at $0.50 each - not bad for 24 hours - I didn't want to be in this long and am glad it worked out but it could have gone bust. Set the limit order this morning and after lunch saw that it filled.
Not really knowledgeable about banks or their operations, so it was really just a YOLO that worked.
Just a few minutes ago - closed out my collars that were opened yesterday (for $0.30 each) of STO $175P / BTO $185C
Made $3.80 total per contract (the Put and Call when we hit $185)
I really like this position and will look to reopen tomorrow - just taking the easy close for 24 hours and $5 over max pain for the week.
(since it is triple witching - weekly, monthly and quarterly expiration, I think the tractor beam will bring us down to $179 tomorrow)
The past 2 months, I have been feeling good with holding core shares and Leaps (06/2025 - $200 & $250's) and making a lot of 24 hour or less trades that have brought in significant cash to the account to fund more leaps.
Will continue to add to the $200's and $250's before the P&D report to ride into earnings. Then I am not really sure but definitely going to stay nimble until the FED is no longer the main catalyst and Tesla execution is.
Cheers!
EVNow
Well-Known Member
Esp if the market goes down. Today TSLA is on par with Nasdaq (so underperforming its usual 2x beta).
The problem is they want to push SPY higher since the pax pain is 399. But TSLA max pain is 180 .... so needs to come down. Its going to be an interesting Friday.
I won't be surprised if this shift to Tesla execution as the catalyst doesn't happen until next year.
Actually I think its most likely that we'll get a drip of Tesla execution that builds steadily, while continuing to be drowned by macro for the year. The drip will sustain the share price, but front and center driver -- I won't be surprised if its a year or more.
EVNow
Well-Known Member
This 185.50 resistance level by WicketStocks seems to be holding pretty good today ...
scubastevo80
Member
And I'm out - closed these out just now about for a ~50% gain. I wouldn't be surprised if we have another see-saw day tomorrow or early next week.
Cary sees $183.36=$190.78=$195.21=$204.40=$221.25.
For downside $178.04 is a decent containment for the day. Break below brings $170.59.
A close Friday below $170.59 (not likely absent a black swan) is a significant sell signal and expect mid-140’s in 1-2 weeks.
This seems to imply that MM may end up with a Friday close over max-pain of 180 and any -C185 on shares not ready to part with might be at peril tomorrow. Caution advised.
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