I swore off short term calls, so naturally I bought a little 250 Oct 4 calls at 1.88. Next step: Enroll in gamblers anonymous.
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I've been trading and accumulating Oct. 4 options with relatively decent success over the last week. I'm now left with 227.50 puts and 247.50, 250, 255, and 265 calls in various proportions, with much more calls than puts. This is more options than I normally hold, but I have been trading them too and with some success, so that my net outlay is not too bad. I'm fine with them all expiring worthless.IV is now about 72%. I expect it to drop to 50% after P&D.
I'm looking at calls/puts ~ $1 - for these to make money, we need a ~ $10 change in SP. If buying both puts & calls to hedge, need ~$15 SP change to break-even. Not sure we'll get that kind of SP change (esp on the upside).
I would agree that it seems unlikely that we will see more than a $10 stock movement. I think the most reliable play, as is often the case, was to buy calls several days before and sell them near market close today. Of course, we didn't get that much of a climb, which made it more difficult to sell before the news.IV is now about 72%. I expect it to drop to 50% after P&D.
I'm looking at calls/puts ~ $1 - for these to make money, we need a ~ $10 change in SP. If buying both puts & calls to hedge, need ~$15 SP change to break-even. Not sure we'll get that kind of SP change (esp on the upside).
I disagree. IMO the best move on these delivery report days and before earnings reports is to sell very OTM (8-10%) calls and puts and let them expire worthless. I have been doing that for 2 years now - easy money. I tend to sell more calls since they are covered by my shares in case there is an unexpected large run-up.I would agree that it seems unlikely that we will see more than a $10 stock movement. I think the most reliable play, as is often the case, was to buy calls several days before and sell them near market close today. Of course, we didn't get that much of a climb, which made it more difficult to sell before the news.
I don't know the stats on the deliveries reports, but you maybe right. The earnings reports, however, have caused big moves, like Q2 2019 and Q3 2018. Option sellers would have took a bath.I disagree. IMO the best move on these delivery report days and before earnings reports is to sell very OTM (8-10%) calls and puts and let them expire worthless. I have been doing that for 2 years now - easy money. I tend to sell more calls since they are covered by my shares in case there is an unexpected large run-up.
Yeah, the black swan type events aren't rare with TSLA, so it's easy to get killed selling options even though you can make steady money most of the time. The covered call is a way to mitigate this though since in effect you just lose your shares without benefiting from the climb, but you do get to keep that modest option premium.I don't know the stats on the deliveries reports, but you maybe right. The earnings reports, however, have caused big moves, like Q2 2019 and Q3 2018. Option sellers would have took a bath.
I picked up some 227.5 puts and 255 calls. Hoping to sell the puts quickly tomorrow before the total IV crash to break even.
PS : Or I could wait for MMD. Would be strange if they don't try an MMD tomorrow.
Nice call, though risky. Did you cover?Shorting Tesla @ 243.8
Sold my puts ~ $4 too. Missed the $5 high mark when SP was at 225 (bounced within a minute), still covered both the call & put - and made a tidy profit. Similar to what happened after Q2 ER.I sold my 247.50 calls for 0.25 on the opening bounce. Not much, but its some pocket change I could use for lotto calls later. The 250, 255, 265 were single pennies range, so I'll just hold 'em. Never know, black swan and all. Continuing to hold 227.50 puts. Let's see what happens.
Edit: Just sold the 227.50 for $4 and bought the 222.50 for $2. Locked in my cost plus a tidy profit. So now I can just ride these down or let them expire.