The Feds will most likely not reduce rates until we see real weakness in the economy. This is why Powell will reiterate "too soon to lower rates" every time he talks. He wants the market to agree, as the fed rate rise/fall follows market expectations.
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Wiki Selling TSLA Options - Be the House
- Thread starter adiggs
- Start date
Rate cuts aren't really priced in until May, and even then aren't more fully priced in until June. No one is expecting a March rate cut. With that said, I would expect a hot CPI print to still cause a selloff, because it will immediately reduce bets on May/June cuts. And Truflation not withstanding, I haven't seen much to indicate downside in CPI. Used auto prices have stabilized, rent is showing some YoY increases, energy prices are on the rise.
There's a difference between expectations and Wall St making it's own narrative to support a rally or a sell off. The market was pricing in a Fed rate cut in March 2 months ago and then we got inflation data that poured cold water on that and yet, the market is up since this.
We never got a sell off even though expectations for a rate cut went from something like 80% in mid Jan to 0% now.
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They are spreads, but safer than straight spreads because the long leg buys you more time. The risk is that on a big rally, the short leg price increases way faster than the long leg.
It's a calendar spread in general, and a poor man's covered call in this specific combination. Those are the magic terms that will help you find stuff to tell you in as much, or more, details as you'd like about them.
Hola - well first of all, I have nearly 2.5 years to roll up to a Jun 2026 strike, a lot can happen in that time, so although it would be annoying it's not a big deal either
Secondly, I have 100x January 2025 +c300's sitting there doing nothing, meaning I can write 100x weeklies relatively close to the money and if they go ITM enough that they're difficult to roll, I can just roll them out to September, something like that, then continue with weeklies, albeit with more caution
Already did that on the last run from 180 - 200, I have -c185's go ITM and I threw them out to September -c240's, then when it crashed back down, I rolled them back and closed them out
And if we get a serious rally then I do the same but stop writing weeklies, then sell off my LEAPS for profits at a certain point, then deal with the rolled calls
thenewguy1979
"The" Dog
At least we closed green. Some progress
It might try to push through $182 again at open tomorrow macro permitting. Though at this point I wonder who are the sellers itching to dump there if TSLA’s risk skew is to the upside at this point. If they step aside and wait they could sell it for more higher up
Unless they “know” something lol, or have other reasons.
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thenewguy1979
"The" Dog
Rolled 5x NVDA 3/15 -p950 -> 4x 3/22 -p970
Extrinsic was getting pretty low, and yeah, slightly higher strike, but 20% less exposure
Still holding 20x July +p600, will reduce the contracts first if possible, then start 2x the contracts to roll down if needed
Extrinsic was getting pretty low, and yeah, slightly higher strike, but 20% less exposure
Still holding 20x July +p600, will reduce the contracts first if possible, then start 2x the contracts to roll down if needed
Nice to see you didn't lose your sense of humour!
john tanglewoo
2012 Roadster Owner
Off topic, but curious what you'd do in my situation.
Back when market was tanking, I hedged most all of my NVDA position when the stock was around 160. I was fearful of losing stock value, so I sold calls against most of my position to fund a put spread.
The calls I sold were -C300 50x 6/21/24 at 176.54
The put spread expired worthless.
I had actually rolled these sold calls up once from 250 and payed a hefty premium. Now the situation is basically untenable. Sitting on about $2mm gain in stock that I will likely lose out on from being too slow to continue rolling the position as the stock went up.
Worst part is my cost basis on NVDA is $38, so it's going to be a massive capital gains hit if all the shares are sold away.
Advisors are telling me that if i'm still bullish on NVDA, to simply take the loss and re-enter the position. Just wondering if you'd have any suggestions. Shitty situation to be in.
ChiefRollo
Member
That’s a bit more option gymnastics than I’m used to. I can learn / try it at some point, I think.
It hasn't been easy. I've been on the verge of tears and panic for 3 days. When I factor in the TSLA shares I had to sell that I had acquired for a Buy-Write at SP 242, the loss is in the 7 figures, and my account is not that large anymore. I might have to come out of retirement and/or sell my much smaller plane that I love, and the thought of flying commercial makes me want to puke....Nice to see you didn't lose your sense of humour!
O.T. but relevant. I never understood PTSD before, but after our son's suicide in 2019, my brain is not the same. I can't handle the frustrations of hospital work/patient management anymore, or frustrations in general. That is part of the reason I retired - I was getting panic attacks in the operating room before the case would start (even if it was an easy surgery). It is crazy to be aware of it but unable to control it. I was lucky that I had made so much money in TSLA by that point. It is unfortunate that I discovered this thread and lost 66% of it now. NO MORE SPREADS for me.
Knightshade
Well-Known Member
If one is a fundamentals matter person they could be seeing more analysists following Troy down on deliveries (and EPS) and saying "I'll take whatever little pop I can in the morning to sell because surely posting only ~420k deliveries in ~3 weeks is gonna tank the stock, right?"
one option - hopefully others chime in.....
hoping that you dont need the shares for a while.... looks like the extrinsic is at or near 0 - i see ~ 560 for the Jun C300. If you dont need the shares - you can roll to Dec 26 and raise the strike to 350 for close to even
its not alot of help, but it does give some protection against the shares getting called away - and if they do, it's $50/sh higher
i looked at nearer rolls, like dec 24, but you dont get much strike improvement without paying
edit - and as soon as the next later set of options open up - keep trying to roll up if possible.
It needs to be huge sellers though to put up a fight like that at the boundary one would think. I hope those kinds of sellers aren’t that myopic, unless it’s predefined scalps from $173 and out $183 and move on to another ticker/trade or some other factors
It’s similar to those who sit at the bid as the shares tank trying to buy and buy, but if they’d wait another few minutes they’d get the same shares $3-$4 dollars cheaper. I never understood that. In general watching the tape one sees all kinds of weird behavior.
I STRONGLY recommend getting a Portfolio Margin account to sell naked options on stocks, instead of selling spreads. I have done both and naked options are both safer and easier on the brain, despite the name and the lack of a safety net, which, lets be honest, sometimes just gives you a false sense of security and pushes you to take outsized risks. Otherwise, stick with selling covered and add some spread buying. I dont recommend gambling with spread, but if you feel the urge to sell them so close to the money to capture large return, you might have an underlying need for adrenaline, and instead of denying its existence, you might satisfy that hunger by buying a few spreads here and there. keep it interesting but with much lower risks.It hasn't been easy. I've been on the verge of tears and panic for 3 days. When I factor in the TSLA shares I had to sell that I had acquired for a Buy-Write at SP 242, the loss is in the 7 figures, and my account is not that large anymore. I might have to come out of retirement and/or sell my much smaller plane that I love, and the thought of flying commercial makes me want to puke....
O.T. but relevant. I never understood PTSD before, but after our son's suicide in 2019, my brain is not the same. I can't handle the frustrations of hospital work/patient management anymore, or frustrations in general. That is part of the reason I retired - I was getting panic attacks in the operating room before the case would start (even if it was an easy surgery). It is crazy to be aware of it but unable to control it. I was lucky that I had made so much money in TSLA by that point. It is unfortunate that I discovered this thread and lost 66% of it now. NO MORE SPREADS for me.
It's crazy how the timeframe of finding this thread or becoming knowledgeable about options changes based on the period of what TSLA was doing during said timeframe.It hasn't been easy. I've been on the verge of tears and panic for 3 days. When I factor in the TSLA shares I had to sell that I had acquired for a Buy-Write at SP 242, the loss is in the 7 figures, and my account is not that large anymore. I might have to come out of retirement and/or sell my much smaller plane that I love, and the thought of flying commercial makes me want to puke....
O.T. but relevant. I never understood PTSD before, but after our son's suicide in 2019, my brain is not the same. I can't handle the frustrations of hospital work/patient management anymore, or frustrations in general. That is part of the reason I retired - I was getting panic attacks in the operating room before the case would start (even if it was an easy surgery). It is crazy to be aware of it but unable to control it. I was lucky that I had made so much money in TSLA by that point. It is unfortunate that I discovered this thread and lost 66% of it now. NO MORE SPREADS for me.
I was in the opposite situation where I wish I had discovered the thread in 2021 or even the summer of 2022. I had always been the accumulate and hold type investor. Keeping it simple as you'd say. I knew I had some big financial obligations coming up in early 2023 including needing a down payment for a home in the many hundreds of thousands of $$$ + more cash buffer for a family since a baby is on its way, and I kept hoping the stock would get back on it's uptrend and then as we all know, Q4 2022 happened and I couldn't take the risk of the stock being 100/share or lower for an extended period of time so I sold a tranche of shares.
What I should have been doing during 2021-2022 was what I'm doing now...setting some exit points and selling CC's at those exit points to generate income, even if I didn't need that income at that exact moment. My lack of action before Q4 2022 cost me about 25% of my position in TSLA. I'm hoping through learning here and restricting myself to safe option strategies, that over the next few years I'll be able to replace those lost shares (or the cash value of the sum).
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