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Wiki Selling TSLA Options - Be the House
- Thread starter adiggs
- Start date
Max Plaid was talking about trying IC's. I said ala Yonna, (Meaning like Yonna does, Selling weekly Iron Condors)
Best Christmas present ever.
The Twitter post showed up on my feed and I don't why, maybe it is a sign 
. As a reminder, It is really easy to get wiped out if you are not careful. Please don't use margin if you can or just use very little margin. We had members here that completely wiped out their 7 figure accounts and one that took his life.
No way I would do IC's on my entire holdings. I am shooting for 0.25% on my entire holdings per week and that is even hard to do consistently. A 0.25% return puts me at less than 10% OTM with CC's or puts if open weekly contracts on Monday. The Tesla premiums are better than most but they are not what they used to be.
. As a reminder, It is really easy to get wiped out if you are not careful. Please don't use margin if you can or just use very little margin. We had members here that completely wiped out their 7 figure accounts and one that took his life.No way I would do IC's on my entire holdings. I am shooting for 0.25% on my entire holdings per week and that is even hard to do consistently. A 0.25% return puts me at less than 10% OTM with CC's or puts if open weekly contracts on Monday. The Tesla premiums are better than most but they are not what they used to be.
Wecome back! I would LOVE advice for Monday/Tuesday....View attachment 1000145
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piece of cake!
want to know the secret?
Wouldn't lower interest rates boost sales (margins) and sentiment, or so far that's way off so it doesn't count right now (Dec-Mar)?
Christmas is sooner this year I guess.View attachment 1000145
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piece of cake!
want to know the secret?
Welcome back.
Welcome back Yoona!
all you guys DO know this already and you are a much more educated crowd than those in Twitter... imma just preaching to the choir hereWecome back! I would LOVE advice for Monday/Tuesday....
1. Don't sell options with income in mind: "I gotta make $x this week". That's how you will quickly lose money, because no one can predict where the stock will go and, meanwhile, you're betting on a fixed strike due to income desire. Rather, sell with success in mind: "Based on TA, what delta or OTM% will make me win this week?" Income will be smaller, but probability of success is very high. (Trust me on this, I have proven stats.) I personally try to not go below 1 standard deviation from previous Friday Close, no matter what TA lines say. So you left a lot of money on the table. That's still better than weekly loss or rolling for debit or rolling with no income for weeks.
2. Do not go all-in, betting the farm especially at the start of the week because of "theta harvesting." Theta is overrated. One can many times get better prems on Wed than Mon. Patience is key.
3. At the risk of stating the obvious, wait for move with momentum before selling. That's where we get the high credits. If i see a sudden vertical spike up or down, that's my cue.
4. If selling IC, don't sell both sides in one transaction. If the day reversed, one side is quickly underwater. Wider width is much, much better than more contracts with narrow width: you want the IC to mimic a Short Strangle for easier rolling. Also, cheaper if rolling for debit.
5. Layer in. This is probably my #2 most important learning from the years. (#1 is Don't Lose Capital). If you have room for 12 contracts, do only 3 a day. This averaging will smooth out the week's unrealized loss, if any. Mon down: 3 BPS. Tue up: 6 BCS. Wed up again: 3 BCS. Thur down: 6 BPS. Sell only the side that's moving until all 12 are filled. On each day's sell, watch for the new delta or OTM%. So the Wed BCS should be different strikes than the Tue BCS, because you're de-risking and not getting stuck-up only on a particular strike due to "tall call wall or put wall." That's why you see my IC with many legs. Each day's new legs are moving in the direction of the stock. My IC is growing AND following the money. If the stock moved too far by Friday, then i only need to roll Monday's 3 legs, not all 12. 9 legs are safe this week. That means 75% win rate instead of rolling everything for debit. That's very important lesson from layering: only 3 out of 12 strikes are at risk of being breached. If the 3 are rolled out to many weeks, i still have 9 to make income.
6. To get extra income, I mirror this week's trades into next week. So if Mon i sell 12/22 16 delta BPS, i will also sell 12/29 16 delta BPS at the same time. Just taking advantage of the spike. Both should/will have diff strikes. Then close everything on Fri and be all-cash on the weekend, unless next week's is a loss so i will let that ride out.
7. Don't sell on Fridays, the Risk/Reward ratio is awful and gamma is at the highest at 0DTE (ie riskiest day to trade).
8. Avoid noise: FUD, China numbers, analyst ratings, AI, FSD, etc. TA lines are often reliable, but don't bet based on them. Sure, "242 is strong resistance". But i'd rather be at 262.5 (smaller income and protected by 250/260 even numbers) than at 245. Don't trust heatmaps which can be faked. I trust tall gamma walls but don't stay too close to them, just in case. Last Friday was classic example. All week long, everyone was sure about MM defending the 250 call wall and tall 250 gamma wall but both failed.
Not advice!
later i'll show some mind-boggling stats... Which Works Better? Rolling for Same Strike or Rolling for 5-Strike Improvements or Rolling for 10-Strike Improvements? How Many Weeks Before They Go OTM If I Keep On Rolling My ITM?
next week is probably 240-260/265 for now:
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I've been wanting to get started learning EWT - Elliot Wave Theory - for awhile now. The books and other material I find for getting started has been overwhelming, and left me not getting started 
Found this book yesterday:
Elliot Waves Made Simple
Cheap in whatever form - I've found it highly approachable.
About 110 pages - took me maybe 3 hours to read cover to cover. My plan was to read it one time through, fast, and not worry about whether I'm remembering every pattern or threshold. Get myself a quick overview. That is now complete - I'll go back and read it again, and I'd guess a few more times.
I've found this approachable and usable. We'll see how well it does at helping me start identifying patterns and how it contributes to my trading. I don't know yet.
I also don't yet know if I can use Trading View for the charting that I'll need to start doing a much better job of. I'll be doing some serious work getting to know Tradingview as well now - something tells me that learning to chart will actually be the bigger task here.
Anyway - not-advice or anything. It's a resource that has helped me get moving down this vector - somethign I've been wanting to do for more than a year now.
Found this book yesterday:
Elliot Waves Made Simple
Cheap in whatever form - I've found it highly approachable.
About 110 pages - took me maybe 3 hours to read cover to cover. My plan was to read it one time through, fast, and not worry about whether I'm remembering every pattern or threshold. Get myself a quick overview. That is now complete - I'll go back and read it again, and I'd guess a few more times.
I've found this approachable and usable. We'll see how well it does at helping me start identifying patterns and how it contributes to my trading. I don't know yet.
I also don't yet know if I can use Trading View for the charting that I'll need to start doing a much better job of. I'll be doing some serious work getting to know Tradingview as well now - something tells me that learning to chart will actually be the bigger task here.
Anyway - not-advice or anything. It's a resource that has helped me get moving down this vector - somethign I've been wanting to do for more than a year now.
Needs to be bookmarked, printed and taped over the desk, bed, and kitchen!
Can't wait to read about the rolling stats!
Also would like to know how often you wait until Friday to close vs take the early win.
Yoona said:
I assume you are talking about the width of the BPS or BCS and not the IC?
Is this really the case that wider width with those is easier to roll? I've been doing a lot of BCS the last few months and often doing 100x contracts where I am getting maybe 0.20 selling the short leg and paying 0.05 for the long, with spreads of 5-10 points. If I widened that my long leg would only drop to maybe 0.04 or 0.03 and doesn't seem worth doing.
I assume you are talking about the width of the BPS or BCS and not the IC?
Is this really the case that wider width with those is easier to roll? I've been doing a lot of BCS the last few months and often doing 100x contracts where I am getting maybe 0.20 selling the short leg and paying 0.05 for the long, with spreads of 5-10 points. If I widened that my long leg would only drop to maybe 0.04 or 0.03 and doesn't seem worth doing.
thenewguy1979
"The" Dog
Thank Yoona. With my small dog brain I have to read this multiple times to comprehend the beauty of the plays.
The layering part is a great derisking strategy. Please share the delta or OTM% you look for? .15? .30?
For specific week if stock only goes up , then no put selling only call? So no IC that week?
yes, wider spread
the difference between 5-10 points and 30 points is in risk management because of the long leg decay
-c270/+c280 is cute now, because "there's no way we'll touch 270 this week" but with high IV, this is most probably a debit roll
OTOH, -c270/+c300 has more benefits:
- higher probability of profit and higher breakeven point
- behaves more like naked options, which is what we want the IC to be; the 270/300 will decay much faster than the 270/280 because the 300 long decays faster, so we get profits faster (ie theta decay working overtime)
- easier to roll because halfway point is 285, not 275
- if rolling, will oftentimes give strike improvement AND credit
they explain it better:
at the minimum, i am guaranteed at least 1 STDDEV away
there is always MMD even on green weeks
we all know Kirk from Option | Alpha, he's literally on post #1 of this thread - he explains the layering better (ie follow the market) :
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Looks like a lot of hard work and does require a lot of cash/margin to build this much volume to get decent returns, no? And there's always the spectre of a substantial move bringing a total loss in one direction, although for sure this would be a rare event, it does happen
This is why I like to do calendar spreads, so the long side of the trade is several months out, which facilitates rolling. I look for along strike that costs around 50c/week on average, then sell against those for both puts and calls -> hence my term "calendar condors"
I think my big problem here is that I sell too aggressively, often writing straddles, which 80% of the time work out and some weeks are spectacularly profitable, but then the move comes and it's all-hands-on-pumps
Hence my idea to shift to $1 weekly premiums, which does putthe trades above/below the Gamma walls as far as I can tell, obviously the lower the price goes, the more aggressiveon short puts, and vice-versa with calls, then the art is to sell off the long sidejsut before the reversal and profit on that too
It's a decent strategy, I think and doesn't require too much management
SpeedyEddy
Active Member
And with that I mean as a minimum top. 340 would not even surprise me very much. But it will be punished hard. Parabolics always mirror..
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