Veteran traders have told me that market orders for options are literally last resorts to be used for all out panic, like you need money to post bail immediately kind of panic, and that some kind of limit order is best because someone is guaranteed to scalp your money with a market order. But it sure stings when you miss out on tons of gain by buying manually. Algos can prevent that, but then, you're an algo trader and that's a whole 'nother level.
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TSLA Trading Strategies
- Thread starter Robert.Boston
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my advice: NEVER market order options- stay in jail
If you have to move very fast then limit the order to the current spread- the market maker will rip you off- but you won't get burned to crisp;
Since getting burned alive in years past- the only time I've resorted to a market order option was when a company suddenly announced bankruptcy- it was that or nothin'. Otherwise 'just say no' to those market-order drugs imo
InTheShadows
Active Member
My only reason for this is I placed two limit orders this morning one for 225's at $2 and the other for 230's @ 1.2. I basically doubled the last on Friday and added a bit extra because I really wanted them.
When I saw pre market this morning I knew today was going to be huge. I didn't expect this huge.
Those 225's went for 2.75 at market open so my doubling plus from .89 wasn't enough. They are worth $9 now. Even after the pull back. I don't know what the 230's went for at open but they are $6 now.
I don't think this is a good idea normally, however in circumstances like today I think it might be a good idea.
No way is this a good idea on thinly traded options. Volume was huge, no, massive today on the ntm weeklies. 7k on the 230's.
Some more thoughts. This was a fast moving market situation. When I sold all my options I placed market orders because I wanted them to execute. They were all heavily traded, however I was sure the top was passed. We didn't get a pull back like I expected at the top, but we did get a slow drift down that I think was propped up buy some or a big buyer mid day today.
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It doesn't seem that the 30. announcement is expected to influence the stock price, by looking at the MayWk1 options premiums compared to MayWk2 premiums... I may look like the "street" don't expect anything big, which in turn seems like a good call-option buying opportunity (with limited downside-risk). Then again, MayWk1 leaves only 1 day of time premium if the stock doesn't move.
I'm thinking of deploying my last reserves into May options on the seeming dip today (perhaps market related). I'm already mostly all in with around 50% of my options in various short-term contracts ranging from May - September, the rest is in 2017 LEAPS.
What do you guys make out of this dip, last good opportunity to deploy before Thursday? Any thoughts are appreciated.
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Interesting, thanks for that. I'm looking to buy May 15 or May 22 though as it should give enough time to analysts to (hopefully) up their price targets.
What do you guys make out of this dip, last good opportunity to deploy before Thursday? Any thoughts are appreciated.
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Interesting, thanks for that. I'm looking to buy May 15 or May 22 though as it should give enough time to analysts to (hopefully) up their price targets.
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I added to my June 19 270s for $2.90. Still holding May 15 200/240s. I may sell half of them before close tomorrow if we get a run up close to $240 but I am torn because I think we will see revenue from the battery storage in the ER/CC that has not been built into the price.
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I bought May 15 245 for $5.40. I think they should cover annoucements and hopefully new reports from analysts. If not I'm overweight on June 19 and September 18 anyway. GL to us all.
InTheShadows
Active Member
I'm going to close out all my positions that expire before September for this week's announcement.
I'm going to set up a strangle (probably a series of them) with weeklies tomorrow near the close. Lots of leverage with not that much risk I think. As long as the iv doesn't start going up.
I'm going to set up a strangle (probably a series of them) with weeklies tomorrow near the close. Lots of leverage with not that much risk I think. As long as the iv doesn't start going up.
Straddle? One strike away from where it looks like it will settle on close Thursday?
InTheShadows
Active Member
That's why I was planning a strangle. I think I still am planning a strangle. It depends on how tomorrow fairs. I probably won't be doing a balanced strangle. Probably 2:1 on the call side. Depends on tomorrow afternoon.
I was just on a cruise with very slow and very expen$ive internet. Was trying to sell some puts (TSLA and others) using my Scottrade iphone app, but the app was gagging when I'd try to place a limit order (I'd enter $0.40 and it would respond "limit price must be an increment of $0.01" - go figure). So I crossed my fingers and sold at market. Every time (and I probably made 10 or so trades during the trip), the order was filled between the current bid and ask - usually about halfway in-between. Many times it filled at a price that was slightly better than the limit I would have used. So while Scottrade's app was a bit buggy, they never gouged me.
Just a datapoint - YMMV, particularly if there's not a lot of liquidity where you're trading...
InTheShadows
Active Member
My experience has been similar when placing market orders on extremely liquid options.
I would attempt this on current week options and next month or two monthlies on round numbers near the strike price.
Before placing market orders I look for a tight bid ask and options with lots of open interest. I like to see 900 or more. If it's less than 1500 I look at volume too.
I usually am not trading more than 20 contracts either. If I was trading 50 or 100 contracts I might take a different approach.
It's more than just Thursday's event, Tesla seems to run in cycles, and this has been a pivot from the down cycle (missed guidance, questions about execution, questions about China, questions about demand drying up....etc. etc.) down to 180 to.......10,050 in Q1, greater transparency on quarterly numbers, "The Missing Piece" tweet, P70D, Disclosure to Analysts about SGIP and Utility product, positive analyst notes...to Thursday, to Earnings, to Annual Shareholders Meeting, to Model X reveal, ....
This is in J.B.'s and Elon's wheel house. They have been teeing this up for 4 years. There is a reason to roll this out now. In addition, demand is strong, global wait times are increasing, the X is coming. Yes, the last few events were painfully sell-on-the news. I don't think Friday will be a repeat.
Cheers and good luck to all. See you in the funnies on Friday.
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doggusfluffy
Closed
Is there a consensus on what would be the best "lottery ticket" model for a hypothetical call option specifically for this event?
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Not sure I would buy options now unless you have a thesis as to why -- best to practice with "paper trades" before you jump into options if you aren't sure what you're doing. Can always buy some trading shares with lower risk/leverage needed.
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