Wiki Selling TSLA Options - Be the House

[BornToFly]

At the opening pop, sold 100X naked calls for next Friday -352.5 for 0.1

Market closed Monday.

 

[phantasms]

I again kicked my c232.5 to next week for $2.38. Happy with this form of management thus far.

 

[Blue horseshoe]

But what was the SP at that time? Aren’t premiums related to the SP as well? Going 10% OTM was giving 100 for weeklies when we were trading around 110, now that’s 200-300. Which is normal of course.

I wasn't doing options before the stock split, but followed premiums since then.
I can recall 10% OTM gave you like 1% (so when we were trading at 800 you could get 800 USD weekly for a 10% OTM PUT/CALL).
Correct me if I'm wrong.

You're right im thinking of post split numbers and don't remember what the percentage was right now for premiums pre split.

I do remember IV being over 100 for much of 2021 and 2022 with periods of dips spread throughout. A good indicator as someone else mentioned is the IV percentile. We are currently sitting at 40% meaning in the trailing 52 weeks we have had higher IV than the current IV 60% of the time.

 

[Max Plaid]

Good advice above. But there is also just closing them out and being tax neutral, if you are willing to let 400-500 shares go. Scrounge enough to close a single option, then sell 100 shares to get cash to close more options. I estimate you will lose 400 shares. Loss of options will cancel profit of shares sold and be tax neutral. The rest of shares will be untouched.

I guess it depends where one is living... for example, here in Belgium, losses on shares are not deductible, but losses on option trades are, how stupid is that? Basically encourages folks to trade options... this in a company trading account, in principle a personal account doesn't attract capital gains tax, unless you get caught and they decide otherwise (grey-zone)

 

[Max Plaid]

At the opening pop, sold 100X naked calls for next Friday -352.5 for 0.1

Market closed Monday.

Damn, you do like to live on the edge! I would not do that, what if some crazy news came out, like Buffet has been buying TSLA or FSD suddenly gets to L5, yeah, improbable, but not impossible...

 

[UltradoomY]

Damn, you do like to live on the edge! I would not do that, what if some crazy news came out, like Buffet has been buying TSLA or FSD suddenly gets to L5, yeah, improbable, but not impossible...

STO - 06/23 $275CC's - $4.50 each - not naked but a good time!

For clarity - we will not know if Buffet purchased TSLA until the quarterly disclosures come out for Q2 which I believe is September - unless he bought a massive amount that needs to be updated immediately following the 3 day rule.

 

[Max Plaid]

STO - 06/23 $275CC's - $4.50 each - not naked but a good time!

For clarity - we will not know if Buffet purchased TSLA until the quarterly disclosures come out for Q2 which I believe is September - unless he bought a massive amount that needs to be updated immediately following the 3 day rule.

Sure, I was just thinking of potential catalysts that could spike the stock...

Yesterday I was looking to buy some puts, July 21st +p200's for $2.65, got them today for $2.35

BTC 2x 7/21 -c200, STO 3x 12/15 -c300, pending STO 5x 6/26 -p260 (waiting for a bit more dip)

So 2x more underwater calls rolled, 124x left out of an initial 150x

 

[kcveins]

That far in the money, you can only roll for credit at the same strike, e.g. you can only forestall the inevitable. Unfortunately, you essentially “sold” those shares at $195, and now you must buy them back at $250, or roll for a looooong time (2025) to get any strike improvement, or roll at a debit (paying part of your loss). The only other way out is to roll and “hope” the SP drops. Unfortunately, hope is not a great strategy.

Thanks

So you received something like $5 for the initial premium and now they're trading $62...?

Depends how patient you are... October expiry you get +$15 strike improvement to -c210, December -c220, -c270 for September 2024

If you keep the 195 strike then quarterly roll to October pays $73, so you could reduce 20x to 18x, if you're prepared to sacrifice the initial premium (assuming was $5), then you can reduce to 17x

If you have cash then you could sell some ATM weekly puts - 6x per week and you can buy back one call, buy some October +p200's with your first put sell, then you have a safety-net on those in case of a pull-back, and a drop below 200 would save all your calls too

Combine the two above, quarterly all to less contracts, selling puts to close out, then can go faster than you think

A more nuclear approach could be to roll to a 10x October 260 straddle, that pays $33 for each side, cuts your expose down to 10x calls and puts, ATM, obviously a big move in either direction needs to be dealt with, but you essentially halve your risk

Not advice, of course, just what I would be looking at myself

Appreciate it

Good advice above. But there is also just closing them out and being tax neutral, if you are willing to let 400-500 shares go. Scrounge enough to close a single option, then sell 100 shares to get cash to close more options. I estimate you will lose 400 shares. Loss of options will cancel profit of shares sold and be tax neutral. The rest of shares will be untouched.

Thanks for this line of thinking
I too often think in terms of all or none

 

[kcveins]

I guess it depends where one is living... for example, here in Belgium, losses on shares are not deductible, but losses on option trades are, how stupid is that? Basically encourages folks to trade options... this in a company trading account, in principle a personal account doesn't attract capital gains tax, unless you get caught and they decide otherwise (grey-zone)

I reside in the US
So I can potentially sell some shares for a profit and balance out the losses from closing out the options

 

[CHGolferJim]

Trading volume seems low so far today at 84 million vs. 65-day average of 134 million. Does this suggest a slow day, or traders waiting for a spirited 3pm-4pm?

 

[riverFox]

Trading volume seems low so far today at 84 million vs. 65-day average of 134 million. Does this suggest a slow day, or traders waiting for a spirited 3pm-4pm?

I think it suggests it's a long 3-day weekend ahead and everyone is headed to the Hamptons.

 

[CHGolferJim]

I think it suggests it's a long 3-day weekend ahead and everyone is headed to the Hamptons.

On triple/quad witching day??

 

[riverFox]

On triple/quad witching day??

I think the interns are in charge now. We'll see how it goes...

 

[Cherry Wine]

Opened 10x 1/19/24 -c400s for a $13.20 credit. I feel like we could run up some more next week, but wanted to lock in some profits off of this incredible run.

 

[phantasms]

Off topic?....I'm normally a seller of things but I couldn't help buy some AAPL Puts for Jan next year. Lotto tickets with downside protection. ¯\_(ツ)_/¯

Also, while I hate trading options on the Chase website, they sure do hook me up sometimes with pricing.

 

[juanmedina]

Off topic?....I'm normally a seller of things but I couldn't help buy some AAPL Puts for Jan next year. Lotto tickets with downside protection. ¯\_(ツ)_/¯

Also, while I hate trading options on the Chase website, they sure do hook me up sometimes with pricing.

View attachment 947595

Nice! I am thinking about some NVDA lotto tickets as well.

 

[Max Plaid]

Nice! I am thinking about some NVDA lotto tickets as well.

Yeah, was thinking that too, just needs a crappy earnings for Q2 and could be some fireworks

Pure speculation though

 

[juanmedina]

Yeah, was thinking that too, just needs a crappy earnings for Q2 and could be some fireworks

Pure speculation though

A little blemish and boom -30%. With the way companies are moving now days +/- double digits during earnings I have been thinking about buying and equal number of lotto calls and puts right before earnings and one side should pay easily for the other if there is a big move. I might do this on TSLA, META, NVDA, AMZN and SHOP.

 

[elasalle]

Jan 24 CC 300 ~ $31
Jan 24 CC 350 ~ $19

So for my Jan 24 300 CC's , for $10, I can go from 300 to 350 strike improvement. - use proceeds from weekly ATM PUTS for the move.
slow roll ... these situations do cause you to think
(need option to be able to sell all my shares in Jan, so pushing to future is not an option for personal account)
cheers!!

 

[Cherry Wine]

Thinking out loud...if macros stay bullish, I'm thinking we could get a run up into and through P&D, but I think there's a decent chance margins revealed at earnings could cause a pullback. (Or margins could not disappoint, in which case, crazy as it sounds, back to retest ATHs?)

Looking to keep some powder dry on longer dated CCs in case that happens.