-
Want to remove ads? Register an account and login to see fewer ads, and become a Supporting Member to remove almost all ads.
Short-Term TSLA Price Movements - 2013
- Thread starter Robert.Boston
- Start date
- Status
Citizen-T
Active Member
Yes. I intend to sell for a hefty profit then use the proceeds to purchase calls when the time is right. In fact, I purchased these puts with some of the proceeds from buying calls at the bottom of the channel not that long ago.
Since we are at the upper band of the trend, FWIW, I sold the Oct 4 215 calls for $0.33. I'm also short Sept 27 200 covered calls @ $0.20, which should expire worthless tomorrow. Then the Oct 4 215 calls should then become covered calls. These are just pocket money. Nothing to shout about.
Maybe I should be buying puts like Citizen-T. But I'm just too cheap to pay for options.
Good luck, all. Congrats as we make another new ATH.
Maybe I should be buying puts like Citizen-T. But I'm just too cheap to pay for options.
Good luck, all. Congrats as we make another new ATH.
Gah, stupid question with puts. Do I want "sell to open" or "buy to open"? I've read the damn info on puts 6 times and I can't yet distinguish which means what. I feel like an idiot, but it's all jargon I don't understand. I think I'd be "buying" the put, but it's to "sell" the underlying shares so I'm not sure which is what I'm looking for.
kevin99
Member
Oh these two "sell to open" or "buy to open" are miles away. If you feel confused, they means you need to spend more time so you are responsible for your money.
"sell to open" a put is when you think the stock won't come down much. Basically a long position, modestly optimistic but provide a bit of downside cushion.
"buy to open" a put is when you think the stock will come down fast. Very negative.
Whether you are purchasing puts or calls, it is "Buy to open". Sell to open is for writing (or selling) puts and calls. \
It is odd jargon.
Of course I'm responsible for my money, what the hell was that supposed to me? That's why I was reaching out to folks who know how to interpret the jargon, because after about 20 minutes of reading explanations of puts, calls, protected puts, and such NONE of them used the phrase "sell to open" or "buy to open".
I get you're encouraging folks (me specifically) to be cautious, but that came across as really condescending.
I know what I want to do conceptually, but mapping that to financial jargon is proving to be a challenge. I'm having better luck now just googling the phrase itself, rather than reading on puts/calls and such, which seems very odd to me. Rather than researching the thing I want to actually buy, I'm having to research the jargon used to describe it.
Edit: found a good explanation (I think), which also explains the origin of the terminology which helped tremendously.
What do the phrases "sell to open", "buy to close", "buy to open", and "sell to close" mean?
Edit: Sorry, I reacted strongly to the implication I wasn't taking responsibility for my own money/actions. That probably wasn't the intent.
Last edited:
borat99
Member
Super low volume earlier. West and East Coast took a lunch break at the same time?
Buy to open 600 puts. Now, that would be another highlight of the the day. Seriously though, I had the same confusion just a few months ago. Spend more time to reading. These visual explanations worked really well for me Option Trading Strategies & Resources - TradeKing.
Buy to open 600 puts. Now, that would be another highlight of the the day. Seriously though, I had the same confusion just a few months ago. Spend more time to reading. These visual explanations worked really well for me Option Trading Strategies & Resources - TradeKing.
Mario Kadastik
Active Member
The "to open" jargon means to open a position. So buy to open means you buy the put and then have a position that protects your stock (or speculates to the future drop). Sell to open means you write a naked put and it increases the open interest.
the same way those systems have a "to close" transaction meaning you do the reverse of your initial transaction and close the position.
now more decent systems just have buy and sell and will figure out whether it's to open or close by looking at your prior position.
the same way those systems have a "to close" transaction meaning you do the reverse of your initial transaction and close the position.
now more decent systems just have buy and sell and will figure out whether it's to open or close by looking at your prior position.
kevin99
Member
No worry. I just mean do know the full implication before placing your money.
I am avoiding using "put" in the "put in the money" phrase.
Interesting, Ameritrade won't let me buy more puts than I have actual stock. I think that might the be next tier of options, which I purposely didn't ask for access to since I didn't really understand what trouble it'd let me get into
Ya because you are using margin at that point
Sunnyday
Member
Ckessel, I can share a trade I made a couple months ago. I "sold to open" Jan 15 puts with a strike price of $200. The stock was around $140 at the time I made the trade, so it was about $60 in the money. This obligates me to purchase the stock at $200/shr in Jan 15 if the stock is trading below $200 (or, obligates me to "buy to close" the options to close out the position). If the stock closes over $200 at expiration, the options expire worthless and I keep the $80+ I received for each contract. If TSLA goes bankrupt tomorrow, I'm on the hook to purchase those shares for $200/each. This is a high-risk, bullish position. The same day, I took the risk level up a notch. I took all the proceeds from the sale of puts and purchased twice the number of calls for the same exp. date but a strike price of $140. So net net, it was an extremely bullish bet. So far it's looking quite good. If this trade plays out as I hope, in Jan 15 the puts will expire worthless and for the calls I'll sell enough to exercise the max number of options to add to my long stock position (or I'll come up with the cash to exercise the calls).
Next, I'm considering selling out of the money puts to open at strike prices at which I wouldn't mind purchasing more shares if the options were excercised (ie., if I was forced to purchase them). For example, if I decided I'd love to purchase more shares at $100 if given the chance, I could sell puts to open for Jan '15 today for a whopping $10.85. So I'd collect $1,085 for assuming the $10,000 obligation to purchase 100 shares at $100.
It should probably go without saying but don't sell puts to open unless you've got the funds at your broker to purchase those shares if the option is exercised. Good luck!
kevin99
Member
Wow that was two great trades! It is the most bullish trade combo you could have.
I did similar thing in Q1, selling OTM puts to finance the cost for the calls. As long as TSLA does not drop belows the strike price, which I am quite confident, at least I will be even with unlimited upside.
Your trades is bolder as the put is deep ITM $200, which could be hit right there. You will make the most gain if TSAL does well!
Yeah, I know. Too much time on my hands.
But all these charts and "channels" and, well, I was curious where it led by 2015. So I hacked this together (emphasis on hack) during lunch. Ketchup on keyboard and all.
Yep, methinks holding until 2016+ is still the plan.
And now back to your regularly-scheduled short-term thread.
But all these charts and "channels" and, well, I was curious where it led by 2015. So I hacked this together (emphasis on hack) during lunch. Ketchup on keyboard and all.
Yep, methinks holding until 2016+ is still the plan.
And now back to your regularly-scheduled short-term thread.
I am enabled for margin trading, though I'm not sure how it decides how much margin it would take. Presumably a lot if I had to come up with 100 shares at $190
kevin99
Member
That is a fun exercise. What I am afraid is there will be a few periods of 10%-20% corrections, followed by weeks of consolidation, effectively slow down the pace of the straight channel, or taking away like half year of climbing, which bring the price target down to $500-600, if the channel theory works for such a long period !
Last edited:
Mario Kadastik
Active Member
A mandatory link after such an extrapolation
xkcd: Extrapolating
- - - Updated - - -
Not really ckessel. I regularly sell naked puts and the margin requirement is ~1-2k per contract. This is dynamic however so if the stock moves down the requirement moves up and at some point you might get a margin call
xkcd: Extrapolating
- - - Updated - - -
Not really ckessel. I regularly sell naked puts and the margin requirement is ~1-2k per contract. This is dynamic however so if the stock moves down the requirement moves up and at some point you might get a margin call
- Status
Similar threads
- Locked
- Poll
