Knightshade
Well-Known Member
This thread is so much more relaxed and level-headed today than the main one.
Today?
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Wiki Selling TSLA Options - Be the House
- Thread starter adiggs
- Start date
Today?
Have a hard time reading it much anymore, even scrolling past 80% of it. I guess people who are used to being slammed by the slings and arrows of options are more humbleThis thread is so much more relaxed and level-headed today than the main one.
I guess people who are used to being slammed by the slings and arrows of options are more humble
Nailed it! (Sorry for the pun
)
People who have been here for more than 2 years have experienced losses over what 99% of the population have.Have a hard time reading it much anymore, even scrolling past 80% of it. I guess people who are used to being slammed by the slings and arrows of options are more humble
This is the resilience thread
We who trade options are impervious to pain
Or like painWe who trade options are impervious to pain
I don't completely understand this mentality. This is only true if you turn around and resell the exact same option at the exact same time. Assignments happen overnight and if the share price shot up, then you wouldn't be able to recoup that extrinsic as the same option is now worth less when you resell it. However, if it went down, then good for you. Not always a win. Am I missing something?
I believe they are referring to immediately selling the shares assigned, not selling new contracts.
You also own the shares, which change in value as well. The important part would be to sell the shares and reopen the contract at the same time (though if you feel good about a direction, you can wait in between and win/lose depending on if you are right)
I’d just add finding a strike and DTE with better extrinsic may be wise if the trend is still down or uncertain.
Does that mean my sold calls can also be closed prior to expiration date if Tesla drops low enough with say also a year left till expiration?
SpeedyEddy
Active Member
the one time in that thread I really wasn't overwhelmed either. (not that I am a non-disturbing member over here, so who am I to have an opinion... ;-)Nailed it! (Sorry for the pun
They can but it's less likely. This is because exercising calls requires you to give up cash to purchase the shares. Conversely with the puts you receive cash when exercising the contracts which is why this happens more often with puts
I'd much rather we keep it all right here; IMHO it's all relevant to making us better TSLA Option Sellers, even if it provides learning excercises involving NVDA or whatever.
Edit- keeping it here far better serves us members than making us shuffle about through various venues and forums.
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As you get deeper ITM, time value becomes less and less of a factor. So an option 2 years out that’s DITM may be almost priced the same as the same strike just 6 months out.
This is why it makes sense to buy DITM LEAPS, because you aren’t paying a whole lot of time value. E.g., a 1/25 50c is ~136 and a 6/26 50c is ~141 right now. $5 for an extra year and a half.
You can also use this to roll in DITM puts to a nearer expiration for cheap.
I agree and it's convenient! But other tickers are technically off-topic so I can see how others feel differently.
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