trading

[mongo]

A good question. It all depends on whether or not the delivery report is out, and if it is, just how good is it?

As I always do, I already put in a sell to close order for half of them at twice the price. The pre-market is nicely up, so that would almost certainly trigger at opening. But based on Elon's email, I might just cancel that, since they're likely to pop even higher. In any case I will sell half early in trading, unless it looks like they might end in the money.

I'm going to be glued to the ticker no matter what.

Given premarket, what about reducing the number you are selling and upping the price to cover the cost of the gamble?
(Hard to estimate, I know)

 

[ggr]

Given premarket, what about reducing the number you are selling and upping the price to cover the cost of the gamble?
(Hard to estimate, I know)

Yes, I will do that, but I'll do it when the market is open, not try to guess the right price.

I also have a Put to close, which will free up some capital. I will sell another one further out while volatility is high.

Edit: Went out for my morning constitutional, and came back to the delivery report. Looks like my gamble will pay back. And to think, I promised myself I wouldn't do short term options any more.

 

[ggr]

Yes, I will do that, but I'll do it when the market is open, not try to guess the right price.

I also have a Put to close, which will free up some capital. I will sell another one further out while volatility is high.

Edit: Went out for my morning constitutional, and came back to the delivery report. Looks like my gamble will pay back. And to think, I promised myself I wouldn't do short term options any more.

To conclude this story, I sold them in 3 tranches:
20 @ $3.5 at 9:37 (covered much of cost, miscalculated)
9 @ $1.25 at 10:15, tried to sell most of them but the price and time value were both dropping.
71 @ $0.68 at 10:30 since it looks like the manipulators want to close around $1200.

Net result: 30% gain, my middle scenario. I got greedy. If I had left my "sell half at twice the price" order in place it would have sold more at a higher price on market open, and been less stressful. Note to self: don't trade short term options. Still can't complain.

 

[mongo]

To conclude this story, I sold them in 3 tranches:
20 @ $3.5 at 9:37 (covered much of cost, miscalculated)
9 @ $1.25 at 10:15, tried to sell most of them but the price and time value were both dropping.
71 @ $0.68 at 10:30 since it looks like the manipulators want to close around $1200.

Net result: 30% gain, my middle scenario. I got greedy. If I had left my "sell half at twice the price" order in place it would have sold more at a higher price on market open, and been less stressful. Note to self: don't trade short term options. Still can't complain.

I copied you, but at 1260 and much fewer.
Sold to cover cost at open, some more later, hanging on to the rest because I'm silly like that.

Regretting not buying some $1 puts at open. Still picked up a few cheap ones to play the drift down.

 

[juanmedina]

To conclude this story, I sold them in 3 tranches:
20 @ $3.5 at 9:37 (covered much of cost, miscalculated)
9 @ $1.25 at 10:15, tried to sell most of them but the price and time value were both dropping.
71 @ $0.68 at 10:30 since it looks like the manipulators want to close around $1200.

Net result: 30% gain, my middle scenario. I got greedy. If I had left my "sell half at twice the price" order in place it would have sold more at a higher price on market open, and been less stressful. Note to self: don't trade short term options. Still can't complain.

I copied you, but at 1260 and much fewer.
Sold to cover cost at open, some more later, hanging on to the rest because I'm silly like that.

Regretting not buying some $1 puts at open. Still picked up a few cheap ones to play the drift down.

Me too, sold some 1280s at $3.52 and than some at $0.82 and kept the 1240 just in case :/ (fail) and sold my 7/10 1060 for a 80% gain . Note to self: don't do this again but if you do sell everything at open lol. We got IV crushed fast.

 

[Boomer19]

traded in and out of a few calls and puts just screwing around the last week or so. with so much velocity just trying to take advantage for a few bucks

i imagine many are doing same

i haven’t made any large moves here though. too risky. just sitting on stk and leaps

 

[juanmedina]

@ggr and everyone else, are you guys planning any moves for the upcoming earnings report? I been seeing some post this weekend that profit seems like a done deal.

 

[vikings123]

@ggr and everyone else, are you guys planning any moves for the upcoming earnings report? I been seeing some post this weekend that profit seems like a done deal.

Im already invested in a few LEAPS in my trading act and a few short term options(August to October) I bought in my IRA on Friday. I thought the SP really held the 1480 level pretty good last week.

No idea what macros hold for us next week but assuming macros are stable I expect the stock to breakout tomorrow and probably settle down Tue/Wed. If you have not already made any plays yet I suggest waiting until Tue/Wed. I plan to buy a couple of lottos based on where the SP finishes close to end of market on Wednesday.

 

[ggr]

@ggr and everyone else, are you guys planning any moves for the upcoming earnings report? I been seeing some post this weekend that profit seems like a done deal.

Me, personally, not advice, blah blah:
I wrote a $1515 put on Friday with the expectation that we'd open higher on Monday, I will close that early on Monday no matter what.
I have calls at $1100, $1600 for this week, and $2350 for the following week. I am planning on a run up into earnings, so planning to sell half of these during the day Wednesday. They will lose time value quickly, particularly since the market will hold its breath waiting for earnings, so probably fairly early in the morning.
I'll sit on the cash from those trades just in case, but the next options are for August 21 and later, so I don't expect to do anything with them or the shares until well after the earnings have been absorbed by the market.

I do have some longer term deep in the money calls. Once the strike on those is less than half the current stock price, and the volatility premium has reduced, I will probably roll them to more calls nearer to the current price, adding more "delta".

I also have some DITM calls for the relatively near future (September). My aim with these is to let them convert to stock, selling some if necessary to cover the cost, to get the lower cost basis.

Repeat: Not advice. It was only earlier this year that I finally made net money trading options, after having some early big wins, and then losing at it for 5 years.

Edit: this is all subject to change depending on what actually happens, of course. Except for closing the put... that will happen no matter what.

 

[FrankSG]

I just spent 3-4 hours looking over options. I think I'll sell some Jun'22 $990s and Jan'22 $500s, and purchase some Sep'20 $2,750s and Nov'20 $1,400s.

The issue with the 2022 options is that the market seems to expect TSLA will continue rising swiftly over the next 2 years, and although I think there will be vast appreciation, I don't think it will happen to the continuous extent the market seems to be pricing in right now. It's impossible to get 2x returns (counted in # of shares) on any Jun'22 options unless the stock price goes to like $6,000+. The Jun'22 $990s I hold offer very little upside at this point.

Furthermore, I have a very hard time seeing Q2 not being at least a small profit. S&P 500 should follow suit, battery day being a potential catalyst (although could not do much like autonomy day), and likely very strong Q3 numbers as a fallback, I think it's more likely than not that the stock price will stay above $1,500-$2,000 during the next few months. Nov'20 $1,400s look likely to end op ITM, and potentially offer some good ~2x returns (counted in # of shares) if stock goes to $2,500-$3,000.

The Sep'20 $2,750s I plan to buy are quite a small bet, in case of a large S&P 500 squeeze/share shortage. I don't think it'll be as severe as Fact Checking (Twitter) thinks it could be, but nonetheless I think a squeeze to $3,000+ is possible, and I'm willing to make a small bet on it.

I'm still keeping the vast majority of my 2021 and 2022 options, because they're far lower risk. I plan to convert them to stock if stock goes up to ~$2,500 (because further upside will be approaching zero at that point). But I'll make these trades because the options I currently hold offer very little leverage, and I'm quite bullish on stock price for the next few months.

Current plan for selling:

• If earnings are good, probably take small profits next week.
• Convert most options to shares if we get to ~$2,500, give or take a few hundred.
• Hope to get lucky timing the top if there is a crazy $3,000+ squeeze

 

[vwman111]

I just spent 3-4 hours looking over options. I think I'll sell some Jun'22 $990s and Jan'22 $500s, and purchase some Sep'20 $2,750s and Nov'20 $1,400s.

The issue with the 2022 options is that the market seems to expect TSLA will continue rising swiftly over the next 2 years, and although I think there will be vast appreciation, I don't think it will happen to the continuous extent the market seems to be pricing in right now. It's impossible to get 2x returns (counted in # of shares) on any Jun'22 options unless the stock price goes to like $6,000+. The Jun'22 $990s I hold offer very little upside at this point.

Furthermore, I have a very hard time seeing Q2 not being at least a small profit. S&P 500 should follow suit, battery day being a potential catalyst (although could not do much like autonomy day), and likely very strong Q3 numbers as a fallback, I think it's more likely than not that the stock price will stay above $1,500-$2,000 during the next few months. Nov'20 $1,400s look likely to end op ITM, and potentially offer some good ~2x returns (counted in # of shares) if stock goes to $2,500-$3,000.

The Sep'20 $2,750s I plan to buy are quite a small bet, in case of a large S&P 500 squeeze/share shortage. I don't think it'll be as severe as Fact Checking (Twitter) thinks it could be, but nonetheless I think a squeeze to $3,000+ is possible, and I'm willing to make a small bet on it.

I'm still keeping the vast majority of my 2021 and 2022 options, because they're far lower risk. I plan to convert them to stock if stock goes up to ~$2,500 (because further upside will be approaching zero at that point). But I'll make these trades because the options I currently hold offer very little leverage, and I'm quite bullish on stock price for the next few months.

Current plan for selling:

• If earnings are good, probably take small profits next week.
• Convert most options to shares if we get to ~$2,500, give or take a few hundred.
• Hope to get lucky timing the top if there is a crazy $3,000+ squeeze

How do you calculate the upside of your options? Do you convert to shares once they get over a certain delta? Is it still not more profitable to hold the options as you have close to a delta of 1 on many more contracts/shares than owning shares outright?

 

[FrankSG]

How do you calculate the upside of your options? Do you convert to shares once they get over a certain delta? Is it still not more profitable to hold the options as you have close to a delta of 1 on many more contracts/shares than owning shares outright?

My TSLA Investment Strategy

Read the 4th section on options. I use various charts and tables. They're included in a spreadsheet called "Options Analysis" that you can download.

And yeah, options will always be slightly more profitable if the stock keeps going up, but an option can never be worth more than 100 shares, and once an option is worth 60, 70, or more shares, the stock has to go up tremendously to get any decent upside on them.

Holding stock has certain advantages, on top of obviously being lower risk. In case of an unexpected large dip (like COVID) for example, stock holds its value better and can be converted to options to take advantage of the dip.

 

[vikings123]

Im already invested in a few LEAPS in my trading act and a few short term options(August to October) I bought in my IRA on Friday. I thought the SP really held the 1480 level pretty good last week.

No idea what macros hold for us next week but assuming macros are stable I expect the stock to breakout tomorrow and probably settle down Tue/Wed. If you have not already made any plays yet I suggest waiting until Tue/Wed. I plan to buy a couple of lottos based on where the SP finishes close to end of market on Wednesday.

I got the first part right (Monday breakout lol) but I don't know about settling down Tue/Wed . I sold a couple of the short term calls for a nice profit but holding on to most them through earnings. I'm not going to buy any more calls if we do not see a drop in IV, might actually sell some for this Friday if this continues.

I think the IV crush on Friday and this morning was a setup to shake out some of the option holders. Once IV was crushed you saw big option buyers step in and take this well into 1600s.

The tech sector was on steroids today. If this continues we might actually reach ATHs by tomorrow.

 

[juanmedina]

I have a debit spread that was ITM this morning but it was barely up from what I bought it for. Do I have to let it go to expiration to get the max profit? Is there any risk by doing that?

 

[EV forever]

I think this is important and it can help save tax and allow compound growth by deferring the tax.

This is about how to convert short term call to long term call without paying tax in the same year and vice versa.

Long Term Call to Short Term Call
This is easier.

Say you have Jun 22 $1000 call, and since it is deep ITM, you want to convert it to a higher leveraged position.
You can sell a Jun 22 $1010 call, and take the premium to buy short term calls or high strike calls. Note that after this trade, you should have 2 trades open:

Long Jun 22 $1000
Short Jun 22 $1010

As long as the 2 trades are open, you wont be taxed for the premium you received for selling $1010 call yet.

Short Term Call to Long Term Call
This is much harder I think. Here is a way that I am using, but I am open to other ideas.

Say it is Aug 2020 now, and you have 10 Oct 20 $1800 call as the S&P 500 inclusion play at 5k cost each. But you dont want to trigger the short term capital gain tax.

You can open 10 call spread, say
10 long Jun 22 $1500 (assuming the cost is 510)
10 short Jun 22 $1510 (assuming the cost is 500, cheaper than the above)

The cost to open the spread is 1k per contract and 10k in total. The margin requirement should be $0 for such bullish call spread.

Then in Oct 20, assuming TSLA SP is $2000, you make $20k-5k = 15k profit (realize $15k gain) for 1 $1800 call, and you realize 150k gain in total for the 10 calls.

When wait for another month, say it is Nov 2020 now, the "short Jun 22 $1510" position might be worth $800 now, so you accumulated ($800-500)*100 = 30k loss per contract.
So now if you buy back 5 $1510 contracts, you can realize $150k loss here.

Note that to buy back 5 contracts, you need $400k cash. You have $200k cash from the sale of 10 $1800 call, and you need to find another $200k to cover the entire gain. Or if not, you can only cover a portion of the gain. This part is configurable depending on the call spread you choose.

Now the net gain is $0 for 2020. And you have these trades open:

10 Long Jun 22 $1500 (This position hasn't changed, and the $1800 call profit is transferred to these calls)
5 short Jun 22 $1510 (This position is reduced as we use it to realize loss)

Would this work for you? And be aware of wash sales rules when closing the short $1510, because it is a tax event and there is loss occurred. The wash rule applies for 30 days before and after this tax event.

posting here - since this is of interest for trading. It may get lost in the main thread.

 

[juanmedina]

posting here - since this is of interest for trading. It may get lost in the main thread.

On the long term to short term strategy what is the likelihood of the option that you sell to get exercised since it is ITM?

 

[Boomer19]

Or you could use options to potentially reduce the price.

C) buy 100 shares now, and sell a covered call. You receive the option premium to lower the cost of the shares, at the risk of losing them (for a profit) if the SP > strike price at expiration. Otoh, you make money even if shares are called away, instead of waiting for a $1200 SP that may never arrive.

D) buy 100 shares now around $1480 and place a ~1200/1960 collar on them that expires in 2 to 5 months. ThIs requires selling a call at $1960 and buying a put at $1200 for each 100 shares you buy. The collar is free.

a. If TSLA falls before expiration, you can sell the collar for a profit and keep the shares for an effectively lower price. For example, if TSLA went down to $1200 next week on a Oct 16 collar, you could sell the collar for about $130/share.
b. If TSLA is between $1200 and $1980 at expiration, the collar expires worthless and you keep the shares.
c. If TSLA is above $1980 at expiration, you lose the TSLA shares for $500 profit each.
d) If TSLA is below $1200 at expiration, the collar is worth 1200 - TSLA SP for each share. The collar guarantees your shares are worth at least $1200.

Last week I did (D) except at 1100/2100 and bought DITM calls instead of shares.

reposting trading ideas
thx mrmage

 

[juanmedina]

I just spent 3-4 hours looking over options. I think I'll sell some Jun'22 $990s and Jan'22 $500s, and purchase some Sep'20 $2,750s and Nov'20 $1,400s.

The issue with the 2022 options is that the market seems to expect TSLA will continue rising swiftly over the next 2 years, and although I think there will be vast appreciation, I don't think it will happen to the continuous extent the market seems to be pricing in right now. It's impossible to get 2x returns (counted in # of shares) on any Jun'22 options unless the stock price goes to like $6,000+. The Jun'22 $990s I hold offer very little upside at this point.

Furthermore, I have a very hard time seeing Q2 not being at least a small profit. S&P 500 should follow suit, battery day being a potential catalyst (although could not do much like autonomy day), and likely very strong Q3 numbers as a fallback, I think it's more likely than not that the stock price will stay above $1,500-$2,000 during the next few months. Nov'20 $1,400s look likely to end op ITM, and potentially offer some good ~2x returns (counted in # of shares) if stock goes to $2,500-$3,000.

The Sep'20 $2,750s I plan to buy are quite a small bet, in case of a large S&P 500 squeeze/share shortage. I don't think it'll be as severe as Fact Checking (Twitter) thinks it could be, but nonetheless I think a squeeze to $3,000+ is possible, and I'm willing to make a small bet on it.

I'm still keeping the vast majority of my 2021 and 2022 options, because they're far lower risk. I plan to convert them to stock if stock goes up to ~$2,500 (because further upside will be approaching zero at that point). But I'll make these trades because the options I currently hold offer very little leverage, and I'm quite bullish on stock price for the next few months.

Current plan for selling:

• If earnings are good, probably take small profits next week.
• Convert most options to shares if we get to ~$2,500, give or take a few hundred.
• Hope to get lucky timing the top if there is a crazy $3,000+ squeeze

Frank have you made any trades recently? The IV keeps dropping and I been tempted to get a few more options to play the inclusion. I have a September 18 but I am now wondering if October is a better date since it will include the Q3 P&D report and battery day.

 

[FrankSG]

Frank have you made any trades recently? The IV keeps dropping and I been tempted to get a few more options to play the inclusion. I have a September 18 but I am now wondering if October is a better date since it will include the Q3 P&D report and battery day.

I haven't. I'm still holding.

The Sep'20 $2,750s were a bit speculative to begin with, but all the mechanisms are still in place for a large squeeze. We'll have to see what happens. They're not worth much atm, so I'm just holding.

The Nov'20 $1,400s have lost 1/3 of their value I believe (maybe more after today's drop), but I'm still pretty confident in them. S&P 500 inclusion should almost certainly happen by then, and even if it doesn't, there should still be a blowout Q3 P&D and ER that'll shock the street. Main risk to these remains the same as when I bought them: some sort of massive macro dip. Barring that, I reckon I'll at least break even on them.

I haven't looked in-depth at the prices of options since the Q2 ER. Some of them are probably good value, but they're obviously more speculative. Oct, Nov, or even early 2021 options could also be pretty good. Some of these also allow you to capture some of the Q3/Q4 upside (hopefully).

I'm personally not too convinced Battery day itself will do a lot to the stock price. Autonomy day was completely ignored by the market.

 

[juanmedina]

I haven't. I'm still holding.

The Sep'20 $2,750s were a bit speculative to begin with, but all the mechanisms are still in place for a large squeeze. We'll have to see what happens. They're not worth much atm, so I'm just holding.

The Nov'20 $1,400s have lost 1/3 of their value I believe (maybe more after today's drop), but I'm still pretty confident in them. S&P 500 inclusion should almost certainly happen by then, and even if it doesn't, there should still be a blowout Q3 P&D and ER that'll shock the street. Main risk to these remains the same as when I bought them: some sort of massive macro dip. Barring that, I reckon I'll at least break even on them.

I haven't looked in-depth at the prices of options since the Q2 ER. Some of them are probably good value, but they're obviously more speculative. Oct, Nov, or even early 2021 options could also be pretty good. Some of these also allow you to capture some of the Q3/Q4 upside (hopefully).

I'm personally not too convinced Battery day itself will do a lot to the stock price. Autonomy day was completely ignored by the market.

I agree this year should be awesome unless something unrelated to Tesla happens. I also agree about battery day; if they only announce a 1M mile cells just like autonomy day it will be a let down. If they announce an advancements in cell technology like Munro speculated (solid state batteries) or that Tesla will make the cells 100% themselves it would be a nice day for the SP.