Wiki Selling TSLA Options - Be the House

[elasalle]

Anyone picking up any LEAPS at this time with the drop in IV?

If so, any (non-advice ) strike recommendations ?

With Fed news out of way, I picked up Dec 25 300 leaps($79) and sold 300 PUTS against (0.65)for next week. Hope to keep selling weeklies against.
Yesterday, I closed positions when SP around $272 ... and using same monies cheers!!

 

[SebastienBonny]

Actually quite surprised my 225CC hasn't got executed yet.
Very low on extrinsic now. Just coincidence?

 

[mongo]

Actually quite surprised my 225CC hasn't got executed yet.
Very low on extrinsic now. Just coincidence?

Owner gets returns nearly 1:1 with stock movement, what would they switch to if optimistic?

 

[Jim Holder]

STO 30x -C280 7/28 (tomorrow) for 0.50 ($1,500). With the $270 monster +GEX wall still in place I don't see $280 in 24-hours.

I’m finding writing short calls 1-2 DTE (Thursday for Friday expiry for example) is less risky/dangerous since the whole week can show sentiment and resistances making it easier to choose a strike. Of course it works until it doesn’t, but this is an interesting corner to bring in some addl income.

 

[tivoboy]

STO 30x -C280 7/28 (tomorrow) for 0.50 ($1,500). With the $270 monster +GEX wall still in place I don't see $280 in 24-hours.

I’m finding writing short calls 1-2 DTE (Thursday for Friday expiry for example) is less risky/dangerous since the whole week can show sentiment and resistances making it easier to choose a strike. Of course it works until it doesn’t, but this is an interesting corner to bring in some addl income.

Post FED OMC days can be very volatile, stay frosty.

 

[juanmedina]

Actually quite surprised my 225CC hasn't got executed yet.
Very low on extrinsic now. Just coincidence?

Same with a single $190CC that I have and the $220-215's. I am going to let a few contracts go and sell puts because I think I am die waiting for the stock to go down to free up those shares. I got a $.3-.2 credit on the calls that I rolled to next week.

 

[Max Plaid]

Any ideas why markets started dumping at 13:05EST, seems to be everything...???

 

[Jim Holder]

STO 30x -C280 7/28 (tomorrow) for 0.50 ($1,500). With the $270 monster +GEX wall still in place I don't see $280 in 24-hours.

I’m finding writing short calls 1-2 DTE (Thursday for Friday expiry for example) is less risky/dangerous since the whole week can show sentiment and resistances making it easier to choose a strike. Of course it works until it doesn’t, but this is an interesting corner to bring in some addl income.

STC @0.11 for an $1,170 win

 

[ReddyLeaf]

Edit: @Max Plaid I was thinking about making a joke about the big boys got back from lunch, but now that we’ve broken $260, it’s a serious bear raid.

Looks like quite a few of this week’s p270s are being moved to Sept. Lots of big volume roll trades (sell p270s, buy p210/220s) showing. Looks like the whales are targeting 220s as per Wicked Stocks. My -cc LEAPS will be happy, but the BPS side of my ICs not so much. I closed out my +250/-270/+290 IB near the AM high, and I’m glad for that. I’ve been burned on those too many times on expiration day. Still holding a few wide +p247/-p257/-c277/+c287 ICs at $0.50, but most everything was rolled to next week.

 

[Jim Holder]

Looks like quite a few of this week’s p270s are being moved to Sept. Lots of big volume roll trades (sell p270s, buy p210/220s) showing. Looks like the whales are targeting 220s as per Wicked Stocks. My -cc LEAPS will be happy, but the BPS side of my ICs not so much. I closed out my +250/-270/+290 IB near the AM high, and I’m glad for that. I’ve been burned on those too many times on expiration day. Still holding a few wide +p247/-p257/-c277/+c287 ICs at $0.50, but most everything was rolled to next week.

View attachment 960103

A close over 269.85>280.04>short?>290>short?>293.43>314>414
A close under 260.87>buy puts, perhaps $220 for 60-90 days.

Dealer positioning is still showing long/hold, so the data is a bit conflicting. Maybe we'll get more clarity after July closes and those positions flow through the system.

Gamma exposure Profile showing most dealer support in a range between 255 and 270 going into August trade:

Wookie-Jookie simulation shows lows at most $243.70:

These data points have held up the past 2-3 weeks that I've been monitoring them more closely.
August is likely to be soft, perhaps even September, but how deep and if we get the upward gap-fill before/during is still an open question.

That everything else is quite toppish doesn't bode well overall IMO. May be summer correction for fall run.

Clear as mud

 

[adiggs]

Actually quite surprised my 225CC hasn't got executed yet.
Very low on extrinsic now. Just coincidence?

The key isn't very low extrinsic, it needs to be functionally zero. The better way to think of it is that if the call owner exercises their option, then they give away whatever extrinsic value remains. Even if its only .10, then they just gave you that .10. For the market makers that .10 is theirs if they wait, so no rush eh? With calls, since they will be acquiring shares, it also means they don't need to deploy capital early in order to give you that .10. Waiting to the very end lets you be the provider of the capital (shares) and lets them do other things with that money.

That doesn't mean you want to wait until the last hour to roll of course, but the lower the extrinsic at roll, the less you're buying out when you sell the new position.

 

[SebastienBonny]

The key isn't very low extrinsic, it needs to be functionally zero. The better way to think of it is that if the call owner exercises their option, then they give away whatever extrinsic value remains. Even if its only .10, then they just gave you that .10. For the market makers that .10 is theirs if they wait, so no rush eh? With calls, since they will be acquiring shares, it also means they don't need to deploy capital early in order to give you that .10. Waiting to the very end lets you be the provider of the capital (shares) and lets them do other things with that money.

That doesn't mean you want to wait until the last hour to roll of course, but the lower the extrinsic at roll, the less you're buying out when you sell the new position.

So are all options always executed? I can imagine it makes more sense for a buyer to sell the contract in stead of executing it? Read into this and it seems ITM options aren’t always executed/assigned.

 

[adiggs]

So are all options always executed? I can imagine it makes more sense for a buyer to sell the contract in stead of executing it? Read into this and it seems ITM options aren’t always executed/assigned.

ITM options are auto-executed at expiration.

But rarely do options get executed prior to expiration, for this reason if none other. The further out in time, and the lower the extrinsic value, the more likely an early exercise.


My own approach with DITM options is that I keep an eye on the extrinsic and roll earlier than something closer to the money. In practice that often looked like rolling options a week before expiration. In these cases I would also roll by at least 2 weeks, and strongly consider 1-12 months (for me, heavy bias towards 1 month at a time). I do the monthly roll instead of weekly for a couple of reasons - I don't have to roll again in a week, and with a 1 month roll I might even pick up enough time value to trade it in for a strike improvement, where 4x 1 week rolls wouldn't.

Deep enough ITM, and I REALLY don't want to be assigned, I've done 1 - 2 year rolls. If nothing else rolling into next year can move the tax impact at assignment if I want to do that.

 

[SebastienBonny]

ITM options are auto-executed at expiration.

But rarely do options get executed prior to expiration, for this reason if none other. The further out in time, and the lower the extrinsic value, the more likely an early exercise.


My own approach with DITM options is that I keep an eye on the extrinsic and roll earlier than something closer to the money. In practice that often looked like rolling options a week before expiration. In these cases I would also roll by at least 2 weeks, and strongly consider 1-12 months (for me, heavy bias towards 1 month at a time). I do the monthly roll instead of weekly for a couple of reasons - I don't have to roll again in a week, and with a 1 month roll I might even pick up enough time value to trade it in for a strike improvement, where 4x 1 week rolls wouldn't.

Deep enough ITM, and I REALLY don't want to be assigned, I've done 1 - 2 year rolls. If nothing else rolling into next year can move the tax impact at assignment if I want to do that.

Thanks! This selloff happening now might give me a good monthly roll opportunity, but want a bit more than what I’m getting now.

 

[tivoboy]

Any ideas why markets started dumping at 13:05EST, seems to be everything...???

10 yr was ramping, up and over 4%

 

[tivoboy]

Wookie-Jookie simulation shows lows at most $243.70:

View attachment 960108


These data points have held up the past 2-3 weeks that I've been monitoring them more closely.
August is likely to be soft, perhaps even September, but how deep and if we get the upward gap-fill before/during is still an open question.

That everything else is quite toppish doesn't bode well overall IMO. May be summer correction for fall run.

Clear as mud

My medium duration target is $238-242 for entries. ;-)

 

[UltradoomY]

STO - 08/04 - $260C's - $10 each
BTO - 09/01 - $220P's - $2.50 each

Market is in the 3 day digestion period after Fed yesterday and I think we get a market half flush that will be accelerated by profit taken from momentum traders that rode this up for the past few months.

I also have some Collars on SPY - Sell a Call - buy a Put for September 1st

 

[Blue horseshoe]

ITM options are auto-executed at expiration.

But rarely do options get executed prior to expiration, for this reason if none other. The further out in time, and the lower the extrinsic value, the more likely an early exercise.


My own approach with DITM options is that I keep an eye on the extrinsic and roll earlier than something closer to the money. In practice that often looked like rolling options a week before expiration. In these cases I would also roll by at least 2 weeks, and strongly consider 1-12 months (for me, heavy bias towards 1 month at a time). I do the monthly roll instead of weekly for a couple of reasons - I don't have to roll again in a week, and with a 1 month roll I might even pick up enough time value to trade it in for a strike improvement, where 4x 1 week rolls wouldn't.

Deep enough ITM, and I REALLY don't want to be assigned, I've done 1 - 2 year rolls. If nothing else rolling into next year can move the tax impact at assignment if I want to do that.

This applies to call options only. Puts are often exercised prior to expiration.

 

[DaveG_NJ]

This trading day was just 4 hours too long. At least my ITM -p265's for tomorrow popped their head above water long enough to get out with decent gains. Also sold some 280CCs expiring tomorrow just before the afternoon slide. Those should be safe. Just a small silver lining to an otherwise cloudy day.

 

[adiggs]

This applies to call options only. Puts are often exercised prior to expiration.

Very good point