Social Chat - Short Term TSLA Movements

[pz1975]

Excellent breakdown - thank you. In your third paragraph you meant to put "230/235". I had to go back and check from your breakdown below.

Like you said, your results may be skewed because the trades were done at different times. Next time you are doing one of these trades, would you mind doing a quick comparison of the simultaneous differences between strike price differences of 2.5, 5 and 10? I think that would be really useful information for all of us (with all centred on the same strike price unlike the one above)? I have done a couple of these now, but have done it with a strike price difference of 10 with fewer contracts. I agree that the commission price difference makes a minimal overall effect.

 

[DaveT]

Excellent breakdown - thank you. In your third paragraph you meant to put "230/235". I had to go back and check from your breakdown below.

Thanks for catching that. Just made the change.

 

[DaveT]

Like you said, your results may be skewed because the trades were done at different times. Next time you are doing one of these trades, would you mind doing a quick comparison of the simultaneous differences between strike price differences of 2.5, 5 and 10? I think that would be really useful information for all of us (with all centred on the same strike price unlike the one above)? I have done a couple of these now, but have done it with a strike price difference of 10 with fewer contracts. I agree that the commission price difference makes a minimal overall effect.

It's a bit tough to show the actual differences because the ask/bid spreads are significant and it's difficult to know at what credit you can really sell the spread until you actually put in a limit order and see if it fills or not.

 

[pz1975]

It's a bit tough to show the actual differences because the ask/bid spreads are significant and it's difficult to know at what credit you can really sell the spread until you actually put in a limit order and see if it fills or not.

Good point. I guess you and your wife would have to try to make simultaneous trades to test it. Sounds like a good date night activity!

 

[DaveT]

Good point. I guess you and your wife would have to try to make simultaneous trades to test it. Sounds like a good date night activity!

Actually it's usually a morning activity in bed while we're still half asleep. Not a recommended way to trade but what can I say.

 

[pz1975]

Actually it's usually a morning activity in bed while we're still half asleep. Not a recommended way to trade but what can I say.

Careful - I think this site is G-rated.

 

[justdoit]

I've only been doing them the past few weeks so I don't have much experience. But I've been researching how some experienced traders play weeklies and found that selling premium seems to be more consistent of a play vs buying premium.

This week's iron condor was a delayed construct since I sold the Feb28 200/197.5 bull put spread last Friday (when stock was at around $210) and I sold the Feb28 225/227.5 bear call spread today when the stock was at about $216-ish. That allows me to have a very wide range (200-225) where I can keep the full credit. I was actually going to play this week with just a bull put credit spread only but when the stock rose to $216+ I changed my mind and added the bear call credit spread to make the iron condor.

Today I also sold the Feb28 230/232.5 bear call spread when the stock was at $217. If the stock drops (ie., to 210 or so) I'll look into selling a 200/197.5 bull put spread since I'm fairly confident that the stock will hold 200, and that will make an iron condor. But if the stock doesn't drop I'll just keep my existing 230/232.5 bear call spread.

Last week post-earnings was similar where I started off Thursday morning bullish by selling a Feb14 210/205 bull put spread (thinking that was going to be my only post-earnings weekly play) but when the stock wasn't rising on Thursday, later that afternoon I sold a bear call spread (but I made a mistake and bought the wrong expiration so I sold it the same afternoon). My wife who's been following me in some of these trades with different strikes, did something similar where she started out Thursday morning last week by selling a 205/200 bull put spread and then later that day became less bullish and sold a Feb14 222.5/225 bear call spread.

If I thought the stock would be trading in a tighter range I wouldn't mind setting up both legs of an iron condor at the same time, but I'm expecting a wide range of volatility this week so that's why I delayed the construct.

Interesting trades. Personally I'm not a fan of the spreads that have like a $.40 max profit and $2.10 max loss or anything like that. Essentially if the max loss is like 2x or more I stay away. Mainly because with a volatile stock like TSLA you might think $2xx isn't likely but we can be there in the blink of an eye. I feel like these types of trades might work better with other more "stable" stocks.

I like something more along the lines of $2.50 max profit and loss b/c the way I look at it, it's the same as me buying calls and selling when they've doubled. Except the huge advantage is that I don't have to put the money up front (but should have cash on hand to cover if needed) and more importantly, time decay isn't killing me (since I'm assuming these are weeklies). At least this is how I'm seeing it. Still experimenting though.

DaveT, you really got me interested in learning more about these trades b/c I'm fairly convinced that they were the right way to play the ER. The more I think about it the more I think buying OTM calls were a bad idea. You had to have had the perfect strike calls to have made some decent returns, otherwise IV drop and time decay are killing you.

 

[DaveT]

Morgan Stanley's $320 price target is big news IMO. I plan to exit any short calls in my spreads tomorrow morning.

 

[Matthias Buhl]

When I was watching Frankfurt trading this morning I was thinking about all the shorts that are waking up in a few hours. :wink:
View attachment 44123

 

[FANGO]

I know what I'm having with breakfast tomorrow.

 

[Johan]

I know what I'm having with breakfast tomorrow.

A work of art! $227 in premarket right now. This stock is a MONSTER.

Buy the way DougK: It's time to double down on the short again

 

[Larken]

My Lord, it's going to be a massacre on shorts this week.. Morgan Stanleys report will definitely have shorts covering + Gigafactory announcement (which I assume is going to be great à la Musk style) + a potential NHTSA clearance that can come at anytime....

 

[Jonathan Hewitt]

I thought my computer was lying to me when I pulled up the premarket trading this morning. I then checked for news and now it makes sense It might gap down to start, or maybe it'll just shoot straight up, but either way it is going to be a good day!

Glad I still have some March 7th calls...

 

[AlMc]

I thought my computer was lying to me when I pulled up the premarket trading this morning. I then checked for news and now it makes sense It might gap down to start, or maybe it'll just shoot straight up, but either way it is going to be a good day!

Glad I still have some March 7th calls...

+1: Got up earlier than usual to get my child to an early school arrival and thought the site I check Premarket had a glitch..check here...no glitch. Seriously must consider retiring. Thanks Morgan Stanley. This is not going to be pretty for the shorts. I feel sorry for...wait...no I don't!

DaveT: I will help you buy that plane ticket and dinner for Speedy if (looking more like when) the stock hits $280 by March 31st.

 

[sleepyhead]

Morgan Stanley's $320 price target is big news IMO. I plan to exit any short calls in my spreads tomorrow morning.

Breaking news: DaveT to cause short squeeze while unwinding his short positions at market open; after his iron condors grew wings overnight and flew away with his money.

 

[bhuwan]

Breaking news: DaveT to cause short squeeze while unwinding his short positions at market open; after his iron condors grew wings overnight and flew away with his money.

LOL

 

[eepic]

A work of art! $227 in premarket right now. This stock is a MONSTER.

Buy the way DougK: It's time to double down on the short again

Nah, Doug Kass is going to claim "But of course I covered the short profitably at $209". Seems like he tweets hindsight paper trades. I feel bad for anyone suckered into trusting their money with him.

 

[blakegallagher]

Nah, Doug Kass is going to claim "But of course I covered the short profitably at $209". Seems like he tweets hindsight paper trades. I feel bad for anyone suckered into trusting their money with him.

His followers on twitter are making fun of the MS upgrade. like moths to the flame they come.

 

[uselesslogin]

Well, congrats to everyone who has managed to hold on to their options. I have my common and am very happy today but also somewhat regretting I sold the March 205 options I had.

 

[gym7rjm]

Well, congrats to everyone who has managed to hold on to their options. I have my common and am very happy today but also somewhat regretting I sold the March 205 options I had.

Ugh, feel ur pain. I sold my March options yesterday:'( I was using a lot of margin and was getting uncomfortable with the short term options. Oh well, can't be too disappointed with profit.