What happened the options contracts at the end of the day on Friday? I have been offline since Friday afternoon so I assume this may have been discussed somewhere else already but I never seen options go down on price so fast. All the options closed at about what they were worth on Wednesday the 16th; SP around $620 with an IV of 83%. Will we see farther IV crush on Monday with the options opening at a even lower price? I sold some of my options Thursday morning so it seems that I could rebuy some of my contracts at a small discount. @FrankSG @brx140 @ggr
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trading
- Thread starter Boomer19
- Start date
The consensus here seems to be that the options prices are simply incorrect and we will need to wait till market open on Monday to find out the correct prices. On Friday, due to the sudden spike at closing, option prices went haywire. Some of my LEAPS were showing price drops of 90%. Even now, there is a big difference in the bid and ask prices and the brokerages are simply showing the mid-point or the last price for that option.
So what happens to the people that sold options if the prices were incorrect?
If folks sold options before this happened, they already know the price they sold at, so that doesn't change. The market closed immediately after the SP spike, and you cannot trade options in after-hours. So although the accounts are showing incorrect prices, it doesn't make any real difference for now.
There is an issue with people like me who suddenly ended up with options in the money at Friday market close (I had 670s which became in the money), and there was no time to close them out. Many of these folks were able to call their brokerages and get these closed out in after-hours. Others, me included, ended up with a bucket load of shares assigned (with account balances going in negative) which we will need to manage come Monday.
TheTalkingMule
Distributed Energy Enthusiast
This is what I'm seeing with my options on Fidelity. 1/15 500's are quoting at $159, aligned about to the ridiculous 3:43 share prices. Bid/Ask is still showing $150/$169, so basically options market was closed for TSLA around 3:45 it seems?
TheTalkingMule
Distributed Energy Enthusiast
Asked this in the main thread, but it wasn't about cats or FSD so was ignored.
Can someone fill in the gaps for me on exactly how much volume we saw at each turn Friday?
My thought is that 69M at the cross is way low. Traders and benchmarkers saw this and then bought everything in sight from weak longs and front-runners @ $680 after-hours with plans to dump @ $695 to indexers at the opening cross Monday? That way all index demand is met at $695 in two big sweeps with no regular market action in-between.
It feels like that's what everyone hopes will happen. But clearly, I know nothing. Any logic to this thought? Do inclusions ever go in two back-to-back crosses?
If that's the plan, I think they underestimate the conviction of this next set of sell orders vs. Friday's closing cross. Mine are in and 4 digits with no inclination execute or desire to see them sell.
Can someone fill in the gaps for me on exactly how much volume we saw at each turn Friday?
My thought is that 69M at the cross is way low. Traders and benchmarkers saw this and then bought everything in sight from weak longs and front-runners @ $680 after-hours with plans to dump @ $695 to indexers at the opening cross Monday? That way all index demand is met at $695 in two big sweeps with no regular market action in-between.
It feels like that's what everyone hopes will happen. But clearly, I know nothing. Any logic to this thought? Do inclusions ever go in two back-to-back crosses?
If that's the plan, I think they underestimate the conviction of this next set of sell orders vs. Friday's closing cross. Mine are in and 4 digits with no inclination execute or desire to see them sell.
^^^^ No idea, but I expect the MMs to manipulate the SP to keep all us option holders from getting our dues. Lots of shares will be traded before open and we won’t be able to profit. Hopefully, there will be something left for us. At least we still have Q4 sales and financials coming in a few weeks.
mickificki
Member
Anyone here have TOS for TDA(think or swim for TD Ameritrade)? What my TDA says for my account differs on what my TOS position monitor says. My position monitor for TOS says friday was a + day, whereas TDA says - . What gives? Both matched after friday's close, now the TOS is changed.
adiggs
Well-Known Member
My own experience with selling covered calls is that I'm earning much less than with selling covered puts. I keep getting caught out by big up moves (sigh).
It's not a free lunch by any means. That being said, if you think of the covered calls as pre-sales, then maybe you take the first of the early sale (and tax consequences), with the intent to avoid assignment and collect the premiums that pays down the margin debt.
I think the primary consideration is to be certain you know both the upside and downside risks of selling covered calls, as they apply to your situation. If those aren't clear, then I suggest you have some education to acquire before that becomes a plan to rely on.
The Wheel thread is one place where we're focused on selling options if you're not already a regular reader, and might be helpful; comment not necessarily directed specifically to you, but for everybody thinking about this general approach.
adiggs
Well-Known Member
I've been thinking about this as well, and I think that the option prices are probably "wrong" every weekend and off hours after trading, and that most days, the closing cross is close enough to the last trade that we haven't noticed it before.
of course, it could also be that there was so much volume, that we broke it
Runarbt
Active Member
I have 4x june2021 $200 calls I am thinking of turning back into shares.
Dont want to just sell and buy shares. but go through put options. Maybe sell 3x $650 feb2021 puts?
Should get $100 a put ($30.000 total) - so shares then will be $550 for me if I have to buy.
Question is though:
Should I sell the calls now, or hang on to them and only sell if I get the share put to me? Or perhaps sell one call now, .. and keep 3, until puts expire.?
(I am able to cover all 3 put contracts on margin, one option.. let these expire and then decide.. )
Dont want to just sell and buy shares. but go through put options. Maybe sell 3x $650 feb2021 puts?
Should get $100 a put ($30.000 total) - so shares then will be $550 for me if I have to buy.
Question is though:
Should I sell the calls now, or hang on to them and only sell if I get the share put to me?
Or perhaps sell one call now, .. and keep 3, until puts expire.?(I am able to cover all 3 put contracts on margin, one option.. let these expire and then decide.. )
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I guess I should have sold covered calls on Friday instead of waiting to see the price today. Short-term (through March 19, 2021) OTM call prices seem to be down. Although I have a DITM ($220) owned call for March 19, 2021 that is up 3% today.
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If it were me, I would continue to hold DITM calls until after (or right before) next Q4 financials. As an example, I have some 12/24 545c that I’m still holding because they are trading much like stock, definitely not as volatile as OTM options. However, I will sell them today because they will expire this week and I don’t have cash in that account to exercise them. I also have Jan2023 options and will hold those through multiple earnings announcements.I have 4x june2021 $200 calls I am thinking of turning back into shares. Question is though:
Should I sell the calls now, or hang on to them and only sell if I get the share put to me?
Nope. I guess I just found the answer from Fidelity the hard way. They just sold those shares at 660 plus few additional shares to cover for the lower price. So I lost a few shares.
Mo City
Active Member
Took the plunge earlier today on some Jan 2023 $900 calls.
TheTalkingMule
Distributed Energy Enthusiast
I'm only seeing LEAP options out to $1300 for TSLA, any idea why this hasn't been expanded? Jan 2023 $1300 is less than 2x the current, let alone inclusion share price. Would love to sell some covered calls and sit on my shares, but was counting on a higher strike for a few contracts.
mickificki
Member
adiggs
Well-Known Member
I decided this morning that the inclusion trade is over for me. You can all thank me as I've been an outstanding indicator for local bottoms in the share price . I think I closed the various positions this morning with the shares in the low/mid 650s.
I closed out all of my remaining positions, including the January inclusion event calls. Looks like my overall results were usefully positive, but nothing like where I was at much earlier in the inclusion. I had $$ dancing in my eyes and forgot that I'm actively bad at buying options, and should have just taken my results then when the margin between reality and possibility had shrunk as much at that time.
No violins for me - I'll have a bigger tax bill this year as a result of the trades. And the way one gets a bigger tax bill is by making money. Back to selling dividend level options for me.
Good luck to all!
. I think I closed the various positions this morning with the shares in the low/mid 650s.I closed out all of my remaining positions, including the January inclusion event calls. Looks like my overall results were usefully positive, but nothing like where I was at much earlier in the inclusion. I had $$ dancing in my eyes and forgot that I'm actively bad at buying options, and should have just taken my results then when the margin between reality and possibility had shrunk as much at that time.
No violins for me - I'll have a bigger tax bill this year as a result of the trades. And the way one gets a bigger tax bill is by making money
. Back to selling dividend level options for me. Good luck to all!
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