Social Chat - Short Term TSLA Movements

[sleepyhead]

When TSLA didn't go up above 250 as I expected, around lunch time I put in three orders (1/3 each) to close my daily options at 10%, 20%, and 30% gain. The 10% and 20% quickly got struck and missed the 30% by a hair. Ended up taking a 70% loss on the last third.

Overall, I could (should) have covered my trade for a quick double just minutes after I made it, but I got greedy and once again greed did not pay off. Overall I lost about 20% on the trade, so not too bade considering that there was potential for a big pay off.

I also lost money on my 265 trade earlier in the week. I was smart enough to cover half yesterday morning when TSLA was rallying, but kept the other half and let it expire worthless. I made some good solar trades this week to offset that, so all is good.

Overall, I don't know about these weeklies; just not enough time to make money in them. That 10-bagger every now makes up for the losses, but it is a lot better to be selling these than buying.

 

[sub]

I'm a seller of weeklies, you may have bought some of mine. They lose value so fast that some days I day trade them, sell at the top, buy back at the low (30-50% gain), rinse and repeat.

 

[sleepyhead]

I'm a seller of weeklies, you may have bought some of mine. They lose value so fast that some days I day trade them, sell at the top, buy back at the low (30-50% gain), rinse and repeat.

I used to do that strategy as well, and I am going back to doing that one instead of buying.

 

[InTheShadows]

I used to do that strategy as well, and I am going back to doing that one instead of buying.

I'm just curious if you could do that selling a call that is one or two strikes otm and also selling a put one or two strikes otm. Or is that being greedy?

I bought back my first weekly play this am, I mad out great on it but now we know I should have let it expire worthless.

I will not be trying anything like this next week. I think the bull pennant is strongly formed now.

I am making a pennant play for next week. I bought half of it today. I think I will be able to buy the other half early next week for a little less.

We will see how this goes.

 

[sleepyhead]

I'm just curious if you could do that selling a call that is one or two strikes otm and also selling a put one or two strikes otm. Or is that being greedy?

I bought back my first weekly play this am, I mad out great on it but now we know I should have let it expire worthless.

I will not be trying anything like this next week. I think the bull pennant is strongly formed now.

I am making a pennant play for next week. I bought half of it today. I think I will be able to buy the other half early next week for a little less.

We will see how this goes.

I do not sell naked calls or naked puts (I would do this, but it ties up too much capital and I don't plan on buying stock yet).

I have a bunch of ITM TSLA LEAPS that I am riding naked for now. So I just sell as many calls as I have naked LEAPS at the most. That way I am always covered if something crazy happens.

Also, I am almost always 100% invested so I can't sell naked options because they have margin requirements.

 

[772]

I sold some naked otm weekly puts ~10 mins before the close. It does tie up a considerable amount of margin, but I had the cash to cover it and that cash would be freed up soon since the contracts expired worthless.

 

[FANGO]

I do not sell naked calls or naked puts (I would do this, but it ties up too much capital and I don't plan on buying stock yet).

I have a bunch of ITM TSLA LEAPS that I am riding naked for now. So I just sell as many calls as I have naked LEAPS at the most. That way I am always covered if something crazy happens.

Also, I am almost always 100% invested so I can't sell naked options because they have margin requirements.

This is why I sold put spreads on the last earnings call, I was able to do 15 contracts worth of spreads whereas if I had gone naked puts I could have done like one or two contracts worth. Could do more but most of my stock is in an account which doesn't let me sell puts :-/

 

[InTheShadows]

This is why I sold put spreads on the last earnings call, I was able to do 15 contracts worth of spreads whereas if I had gone naked puts I could have done like one or two contracts worth. Could do more but most of my stock is in an account which doesn't let me sell puts :-/

Would my itm leap calls cover me selling puts. I forgot about that aspect of it. The calls I sell are always well covered. I guess I could try to sell a put now since the market is closed. It would let me know if I can sell it or not. I have level 2 options so I can't do anything naked.

 

[FANGO]

Would my itm leap calls cover me selling puts. I forgot about that aspect of it. The calls I sell are always well covered. I guess I could try to sell a put now since the market is closed. It would let me know if I can sell it or not. I have level 2 options so I can't do anything naked.

I don't think you can cover a put with a call. For a covered put you would have to short sell the stock. If you buy a call and write a put, then both are betting on the stock going the same direction, so you are uncovered if it goes in the opposite direction.

 

[InTheShadows]

I don't think you can cover a put with a call. For a covered put you would have to short sell the stock. If you buy a call and write a put, then both are betting on the stock going the same direction, so you are uncovered if it goes in the opposite direction.

You are correct. I can sell the put(s) as long as I have enough cash to exercise the option at market value. I tested it with an order that I had enough cash that I could cover if it exercised. It let me place the order. I tried placing an order that I did not have enough cash but enough value and it would not let me place the order.

 

[sleepyhead]

I'm a seller of weeklies, you may have bought some of mine. They lose value so fast that some days I day trade them, sell at the top, buy back at the low (30-50% gain), rinse and repeat.

But also there will come a day where you are picking up the nickles, and I come in charging as the steamroller. I can lose 9 times out of 10 and still win overall big time if I am long weekly OTM options.

I know it sounds like a losing strategy and normally it is, but with TSLA you would have been a lot better off buying deep OTM weeklies than selling them over the past 12 months.

 

[FANGO]

You are correct. I can sell the put(s) as long as I have enough cash to exercise the option at market value. I tested it with an order that I had enough cash that I could cover if it exercised. It let me place the order. I tried placing an order that I did not have enough cash but enough value and it would not let me place the order.

So this is why I sold bull put spreads. If you sell a naked put then you have to be able to cover (some percentage of) the full price of the stock times the number of shares, but if you sell a put spread then you just have to be able to cover the width of the spread times the number of shares. So when I did mine, instead of selling a 185 put, I sold 170/185 put spreads, which means instead of having to cover 185 points worth of potential drop, I only had to cover 15 points worth. But I still got something like half as much per contract as I would have gotten for the naked 185 put, so the total possible proceeds are much higher. Though the total realistic loss is also higher (cause really, the stock isn't going to zero, but maybe it would go to 170, and that would hurt a lot more with 15 170/185 puts than with 1 naked 185). This was all at ER so the stock was at 195 or something at the time.

 

[sub]

But also there will come a day where you are picking up the nickles, and I come in charging as the steamroller. I can lose 9 times out of 10 and still win overall big time if I am long weekly OTM options.

I know it sounds like a losing strategy and normally it is, but with TSLA you would have been a lot better off buying deep OTM weeklies than selling them over the past 12 months.

wasnt questioning your strategy, I do understand the odds and that those of you that play options heavily have had big playoffs. It comes down to investing strategy and risk tolerance. I'm 90% buy and hold and dabble in options here and there with small amounts. I hold 20-30% in cash and cover my options if strike met with more shares. This allows me to make 2-5x more off my cash than if I just held another 100-200 shares even over the past 8 months since I've been in the stock. So, I don't get run over by the steam roller, I buy it and make more money. I don't yet have the risk tolerance to do heavy options.

 

[ckessel]

I know it sounds like a losing strategy and normally it is, but with TSLA you would have been a lot better off buying deep OTM weeklies than selling them over the past 12 months.

When you say deep OTM weeklies, what's deep in that context? 5%? 10%? (versus deep OTM in the context of a LEAPS would be completely different)

 

[AlMc]

When you say deep OTM weeklies, what's deep in that context? 5%? 10%? (versus deep OTM in the context of a LEAPS would be completely different)

Tremendous leverage with deep OTM weeklies if you catch a shooting star. While I am new to options I like to pick 2-3 strike prices out of the current price with weeklies. Sleepy is WAY more experienced but that is my comfort level.
Over the last 12 months it is difficult not to make money with almost any bull strategy with TSLA.

 

[sleepyhead]

When you say deep OTM weeklies, what's deep in that context? 5%? 10%? (versus deep OTM in the context of a LEAPS would be completely different)

When it comes to TSLA I would say about 5% to 10% is what I consider deep OTM.

 

[Mario Kadastik]

Uhm, not feeling too happy about this mornings drop. For CSIQ it's a nice buying opportunity, but for TSLA I guess I shouldn't have bought as many March $270's, looks like the pennant might be broken to the wrong side :/ Anyone got an update on the chart, where's the support line that we better not break?

 

[austinEV]

Uhm, not feeling too happy about this mornings drop. For CSIQ it's a nice buying opportunity, but for TSLA I guess I shouldn't have bought as many March $270's, looks like the pennant might be broken to the wrong side :/ Anyone got an update on the chart, where's the support line that we better not break?

Yuck. Looks like it flat broke the wrong way. $225 20 day MA looks like the next technical support to me... Or just 238 because it bounced there a few days ago.

 

[sleepyhead]

Meh, I am a buyer of TSLA on this weakness. Don't believe in the pennant. Bought some weekly call options again.

 

[bhuwan]

Meh, I am a buyer of TSLA on this weakness. Don't believe in the pennant. Bought some weekly call options again.

Mind sharing what exp?