trading

[vikings123]

@saniflash

I went to bed around 2:15PM, but I'm very curious if you observed the closing cross today, and what you saw in terms of an imbalance, if any.

Frank-I was trying to catch this on Webull. This was the situation at 3:55. Paired shares ended up around 1.1 million and the imbalance for maybe 40000 shares. Interesting thing to note below is the far indicative closing price.

Far Indicative Clearing Price: The far indicative clearing price is the crossing price at which orders in the Nasdaq opening and closing book would clear against each other at the time of dissemination.

 

[FrankSG]

Frank-I was trying to catch this on Webull. This was the situation at 3:55. Paired shares ended up around 1.1 million and the imbalance for maybe 40000 shares. Interesting thing to note below is the far indicative closing price.

Far Indicative Clearing Price: The far indicative clearing price is the crossing price at which orders in the Nasdaq opening and closing book would clear against each other at the time of dissemination.

View attachment 618761

How do you get this as early as 3:50PM? I thought it wasn't available until 3:55PM?

 

[FrankSG]

It comes down to a person's comfort level - although I do agree with your statement - since these options were clearly bought as an inclusion play, why sell today? But it that helps the owner sleep better - I guess it is worth it.

In my case, I am quite comfortable holding for some more time. I have 840s for tomorrow, which will likely expire worthless, so it will be a loss of about 15K. These were bought with the expectation that buying would start early this week - that clearly did not happen. I am fine with losing these and will hold till the bitter end tomorrow.

It looks to be that this entire S&P buying thing is also on Elon time - just a little bit later than expected

So I decided to play it safe and rolled out my OTM Dec 24 options to Dec 31 to buy an extra week. The ITM and ATM ones are looking fine at 300% - so those I will keep till next week.

Consider playing the closing cross. This is what I will do for my $760s if they are still OTM. I'll just enter LOC orders above $760. If they somehow get filled, I can exercise the options to cover the short position, and pocket the difference.

 

[vikings123]

How do you get this as early as 3:50PM? I thought it wasn't available until 3:55PM?

Looks like that timestamp might be inaccurate. I took the screenshot shot a few seconds after 3:55.

 

[vikings123]

Consider playing the closing cross. This is what I will do for my $760s if they are still OTM. I'll just enter LOC orders above $760. If they somehow get filled, I can exercise the options to cover the short position, and pocket the difference.

Can you do this for options? If so how to do it in IBKR? I thought you had until 5:30 EST to exercise so why not just wait and see?

 

[FrankSG]

Can you do this for options? If so how to do it in IBKR? I thought you had until 5:30 EST to exercise so why not just wait and see?

Limit-on-Close (LOC) Orders

I mean, you could enter LOC orders, then exercise the options after if they get filled during the cross.

Of course if you expect AH price and liquidity to be similar or higher, you could also (short) sell the stock AH, and exercise the options.

 

[Criscmt]

What I previously stated was that I thought closer to $800 is more likely than closer to $600 (so $700+ more likely than $700-), and that there's a fair possibility of higher spikes, as well as higher settlement.

I think I actually feel more bullish now than when I wrote the post. I think settlement above $700 instead of below it is now not just more likely, but quite a bit more likely. Probably more like 2-to-1 rather than 60/40 or so.

It's hard to say when I'll sell which options. I've been going on a day-by-day basis and constantly adjusting my plan, and I might have to go hour-by-hour, or even minute-by-minute if things get volatile. With regards to my DITM leaps, I think I'll almost certainly convert some before $750, and also almost certainly convert all before $850, perhaps before $800.

This is mostly a factor of them being so deep ITM, and having little upside left. Converting these (which make up a v large % of my portfolio) to shares is also a good way for me to limit downside, and make me a little more comfortable holding onto my short-term options longer. It's very unlikely we'll see a drop so large that my DITM leaps get into real danger (<$400), but I'll still feel a lot better about letting short-term plays run (if I so choose) after those DITM leaps have been converted to shares.

I am sorry for pinging you again, I am not sure if you missed one last part of my message.
> Is FSD the reason to have $1600-$2000 by Sep-21 as the target for potential CC sale, consideration?

 

[srius]

What I previously stated was that I thought closer to $800 is more likely than closer to $600 (so $700+ more likely than $700-), and that there's a fair possibility of higher spikes, as well as higher settlement.

I think I actually feel more bullish now than when I wrote the post. I think settlement above $700 instead of below it is now not just more likely, but quite a bit more likely. Probably more like 2-to-1 rather than 60/40 or so.

It's hard to say when I'll sell which options. I've been going on a day-by-day basis and constantly adjusting my plan, and I might have to go hour-by-hour, or even minute-by-minute if things get volatile. With regards to my DITM leaps, I think I'll almost certainly convert some before $750, and also almost certainly convert all before $850, perhaps before $800.

This is mostly a factor of them being so deep ITM, and having little upside left. Converting these (which make up a v large % of my portfolio) to shares is also a good way for me to limit downside, and make me a little more comfortable holding onto my short-term options longer. It's very unlikely we'll see a drop so large that my DITM leaps get into real danger (<$400), but I'll still feel a lot better about letting short-term plays run (if I so choose) after those DITM leaps have been converted to shares.

It seems that exercising deep ITM calls is mostly for the psychological reason. Your exercise cost is fixed, and the value of exercised stock is the same regardless of when you exercise the option. Let's say you exercise a $300 call when the stock price is at $1,000. And for whatever reasons Tesla drops to $400, the stock is worth $40k, with $30k cost (not counting the cost of the contract). If you would have exercise now, the stock is worth the same $40k, with the same $30 cost.

 

[Criscmt]

Limit-on-Close (LOC) Orders

I mean, you could enter LOC orders, then exercise the options after if they get filled during the cross.

Of course if you expect AH price and liquidity to be similar or higher, you could also (short) sell the stock AH, and exercise the options.

Looks like I am not following your plan.
Firstly, are the C760 calls long calls?
1. Place LOC order on your existing shares above $760 price. Side effect: Cap gain Taxes, I guess doesn't apply to you being in Singapore.
2. Have the C760 get assigned.
3. If C760 get assigned, how would '1' help?

 

[saniflash]

I went to bed around 2:15PM, but I'm very curious if you observed the closing cross today, and what you saw in terms of an imbalance, if any.

screen recorded the a(u)ction off of my TWS (it started at 3.50pm), uploaded it here (HD version is still being processed as I'm posting this):

@FrankSG

 

[FrankSG]

I am sorry for pinging you again, I am not sure if you missed one last part of my message.
> Is FSD the reason to have $1600-$2000 by Sep-21 as the target for potential CC sale, consideration?

Not just FSD. I did some projections for next year's financials, and although the valuation would be very rich, I could see EPS of >$2 in Q2 if things go very well, which would mean >$8 on an extrapolated yearly basis, which at a P/E of 200x would be $1,600.

I think it's unlikely to get to $1,600+ by Sep'21, but I certainly wouldn't completely rule it out either.

I don't think the market will attach a significant value to FSD by then.

 

[FrankSG]

Looks like I am not following your plan.
Firstly, are the C760 calls long calls?
1. Place LOC order on your existing shares above $760 price. Side effect: Cap gain Taxes, I guess doesn't apply to you being in Singapore.
2. Have the C760 get assigned.
3. If C760 get assigned, how would '1' help?

I have a long position in $760s expiring today. I guess they'll probably end up OTM, but you can never know on a day like this. Even if the stock is well below $760 near close, I wouldn't rule out a closing cross squeeze.

The plan is to potentially:
1) Place LOC orders > $760, for the amount of shares I could exercise with my contracts. I can even go short for this.
2) If any of the LOC orders get filled, I can use the money from those sales to exercise the $760s to buy back all these shares.
3) I can keep the difference between $760 and the price at which the LOC orders were filled.

 

[vikings123]

OT question but relevant since it is going to be a fun day.

I’m using IBKR TWS and subscribed to NASDAQ total view but unable to see level II data. Their customer service sucks so hoping somebody knows what I might be missing. I only see one quote for ZERO MM in my market depth level II window.

 

[willow_hiller]

I've got a bit of a noob question, but I can't find any solid answers.

Does a Limit on Close (LOC) order have any advantage over a Limit Day order as far as participating in the closing cross is concerned? It would make sense to me that they would behave exactly the same during the last 5 minutes of trading, and the only difference would be that the Limit Day could fill from market open to market close, while the LOC could only fill at close.

 

[corduroy]

Speaking perhaps a bit candidly......why buy options to lever up on inclusion and then sell them before any real buying even happens? Certainly those Dec31's have a more than decent chance of appreciating quite a by EOD Monday?

Yea, it wasn't the most logical decision. But there were some influencing factors:

- I didn't have a great entry point into those positions.
- At the time I was losing conviction that this event would go as I expected when I bought them.
- This was my first time buying short term calls and didn't want to lose money. (this was probably #1)

 

[willow_hiller]

Does a Limit on Close (LOC) order have any advantage over a Limit Day order as far as participating in the closing cross is concerned?

I think I answered my own question, in case this is useful for anyone: https://www.nasdaqtrader.com/content/productsservices/trading/crosses/openclose_faqs.pdf

Which order types are eligible for the Crosses?

Includes Good-for-the-Day (DAY), Good-tilCanceled (GTC), Immediate-or-Cancel (IOC) and market orders

 

[jeewee3000]

FYI: I've entered a series of staggered sell orders for about 15% of my holdings LEAPS/stock just in case there would be a squeeze.

Not saying what levels, you know who could be reading .

Now I'm playing dead investor.

 

[adiggs]

Do you mind sharing the strikes of the Jan-2021 calls you are holding, and the premium you paid?
I have a bunch of Jan-2021 C500 C600 C700. The C700 is at now at no loss no gain. C600 and C500 are up 30-45% profits.

Sure thing.

I have Jan '21 500s I paid 27.50 for (@174 now), 700s I bought in two bunches for a blended 22.60 entry (@46 now), and 800s with a $7 entry (@20 now).

The big position are the 700s. I got the 500s and 1/2 of the 700s the morning after the announcement.

I added on the 800s and other half of the 700s 1 day and $50 share price change later.

 

[strago13]

Another noob question. I have limit orders for my shares (easy enough), which likely will not hit, but you never know.

For my options, I have a set of options at a strike in January. On eTrade it is not intuitive what I need to do, I only have, add, close, roll as selections to deal with these options. Do I need to go place an options order as such? I've put a chat request in, but 56 minute wait =/

Trade->Options->Call, select Sell Close, choose my quantity, expiration, and strike? Set price type to limit and then put that # of contracts in there I am closing? And when it says limit, thats the current cost of the contract not the market value-- so if the current contract costs $10, and I want to sell at $40, I put $40 which would be $4,000? Just confirming before I hit the button

 

[FrankSG]

I actually just bought a few $650s expiring this week, right before it broke through $620.

Sold 3/7th of this position for an ~2.5x gain. Using it to cover tuition fees and living expenses for next year.

I'm letting the remaining 4/7 ride for now. IBKR gave me an extension on liquidating this position (that is too large for me to exercise on margin) until 15:45.

I'll either have to sell or roll-over before then, or I might contact the block trade desk to see if I can arrange for them to sell these calls in the final 2 minutes.