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Newbie Options Trading
- Thread starter Jonathan Hewitt
- Start date
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- investing options TSLA tsla stock
mershaw2001
I'm short the short sellers
Rolling is nothing more than buying back what you sold (or selling what you bought) and then selling (buying) a different contract. Even though it might have the same ticker and strike, it's a different contract. So you incur tax on the original sell/buy based on how long you held the option, most likely short term.
I have three categories of options in my account right now and I'm trying to figure out the best plan of action to sell, roll, or exercise. Any thoughts?
1. Weekly Options
- AUG 180 WK2
Only two days left to trade this. Should I sell tomorrow or do people see a bigger rally on Friday? Margin call will be tomorrow at close correct? So its possible it could go way up again on Friday. But if it doesn't the value will crash (unless it has intrinsic value on it... here's hoping to +$180 tomorrow)
2. Short term Options
- AUG 160
- AUG 170
- AUG 185
- AUG 285 (just for fun)
- SEP 160
This is tricky because I'm guessing tomorrow is only the beginning of a strong run as more institutional money decides to come in. I think the best plan for the AUG calls is to wait till early next week to see if the run continues. If tomorrow is amazing I will unload a portion of the AUG positions. I will probably hold the SEP calls for a bit to see how big the run is and unload in phases.
3. LEAPS
- Jan 14 125
- Jan 15 90
- Jan 15 95
- Jan 15 120
- Jan 15 150
- Jan 15 180
I'm pretty clueless what the best strategy here would be. I wont have to act quickly here, but I'm not sure if I should exercise or roll, and when the best time to do so would be. For my Jan 15 90's and 95's I think the value of the option might soon go over the strike price. At this point I can roll without having to use margin and I don't have to worry about short term capital gains. But is that the wrong move to do so early for a 2015 leap? I think for everything else I will let ride for a while and reevaluate down the road.
I only have level 2 option trading so I cannot do too many crazy techniques. Anyone else in the same boat? Any advice or outlook from more experienced option players would be great to hear!
1. Weekly Options
- AUG 180 WK2
Only two days left to trade this. Should I sell tomorrow or do people see a bigger rally on Friday? Margin call will be tomorrow at close correct? So its possible it could go way up again on Friday. But if it doesn't the value will crash (unless it has intrinsic value on it... here's hoping to +$180 tomorrow)
2. Short term Options
- AUG 160
- AUG 170
- AUG 185
- AUG 285 (just for fun)
- SEP 160
This is tricky because I'm guessing tomorrow is only the beginning of a strong run as more institutional money decides to come in. I think the best plan for the AUG calls is to wait till early next week to see if the run continues. If tomorrow is amazing I will unload a portion of the AUG positions. I will probably hold the SEP calls for a bit to see how big the run is and unload in phases.
3. LEAPS
- Jan 14 125
- Jan 15 90
- Jan 15 95
- Jan 15 120
- Jan 15 150
- Jan 15 180
I'm pretty clueless what the best strategy here would be. I wont have to act quickly here, but I'm not sure if I should exercise or roll, and when the best time to do so would be. For my Jan 15 90's and 95's I think the value of the option might soon go over the strike price. At this point I can roll without having to use margin and I don't have to worry about short term capital gains. But is that the wrong move to do so early for a 2015 leap? I think for everything else I will let ride for a while and reevaluate down the road.
I only have level 2 option trading so I cannot do too many crazy techniques. Anyone else in the same boat? Any advice or outlook from more experienced option players would be great to hear!
My goodness you folks with short term, 160, 170, 180! I bought a few Aug 150's and I thought that was madness! I would have my finger on the sell button on all those speculative options all day if I were you. I wish you luck. My 90s, 95s, and 100's (and their weird out-of-town cousin 150's) will be there with you.
I am no expert by any means.
Hold all Jan 14+
your #2, hold till monday. and re look at them then
#1 is the tricky one. I dont see the stock getting that high so the delta is going to start to kill it. if you have time really the best option is to watch the value of it like a hawk. once you see the delta take hold and the value start to dip either with no stock movement turns negative even with stock movement. which would be mid to end of day tomorrow if the stock does not keep on a nice up swing you should dump it. dont get to greedy and end up with a worthless call. make your profits and be happy you have them. cuz remember even if the stock get to 180 buy then, theoretically that call is still darn near worthless. that is why you need the volatility of the stock on a heavy up swing to get people to pay a pretty penny for it.
Hold all Jan 14+
your #2, hold till monday. and re look at them then
#1 is the tricky one. I dont see the stock getting that high so the delta is going to start to kill it. if you have time really the best option is to watch the value of it like a hawk. once you see the delta take hold and the value start to dip either with no stock movement turns negative even with stock movement. which would be mid to end of day tomorrow if the stock does not keep on a nice up swing you should dump it. dont get to greedy and end up with a worthless call. make your profits and be happy you have them. cuz remember even if the stock get to 180 buy then, theoretically that call is still darn near worthless. that is why you need the volatility of the stock on a heavy up swing to get people to pay a pretty penny for it.
Heck, I'll probably unload my Sep 170 call tomorrow or maybe Friday because once the earnings report volatility passes it's going to lose alot of its value. I'd want to dump weekly or August OTMs in a big hurry and walk away with money in my pocket before it goes poof. Of course, I don't get close to expirations to begin with because I can't handle the risk, but more power to you if you want to roll the dice on it becoming ITM.
I'd consider selling these 20-30 minutes after market open tomorrow. Reason being is that sure they can go up in value after that but when the stock stalls and loses trajectory toward 180, the option premium will tank like crazy... like others have mentioned.
I'd also unload your 285 too, if you can get anything, asap. But I'm guessing you didn't spend much on it anyway. But got it give it to you. $285, wow. That's too awesome.
DaveT, you are the reason I got the 285's... (more so as a joke) I wasn't able to scrounge up 100,000 contracts though. But in seriousness, its only a couple hundred bucks I have on the line there, and based on an options calculator I don't really stand to make much unless the price goes up a lot. Shouldn't I take the gamble that the real squeeze will push into next week? Or since its so far out of the money would I just be better off taking whatever profit I can get tomorrow.
Johan
Ex got M3 in the divorce, waiting for EU Model Y!
If you can afford it, please keep them and let that bet ride. How much did you pay for them? It would be legendary if those became 100-baggers.
The 285s are pure crazyness.
I would try to unload them for anything. Actually, I'm not sure you'll be able to fetch even $0.01/share because there needed to be a crazy blowout ER with after hours this afternoon to be trading in the 190s or so, for your 285s to have any value tomorrow. Sorry, bro. But legendary move. You were the guy who bought Aug13 285s.
I just got 50 contracts at .03. I use scottrade and the fees for that many contracts is outrageous, otherwise I would have gotten more probably.
I'm using this options calculator: http://www.optionsprofitcalculator.com/calculator/long-call.html and it shows the potential profit declining quite a bit after the weekend.
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The 285s are pure crazyness.
I would try to unload them for anything. Actually, I'm not sure you'll be able to fetch even $0.01/share because there needed to be a crazy blowout ER with after hours this afternoon to be trading in the 190s or so, for your 285s to have any value tomorrow. Sorry, bro. But legendary move. You were the guy who bought Aug13 285s.
I will see tomorrow what I can get for them and report back!
That's my worry with the Aug 17 150-170's. I feel like as soon as some momentum is lost the value will rapidly drop. In that case I'd have to hope that the stock does go well above 170. Do you think the same for the Sep 21's? No major news event from now till then so feel like they will also tank fast.
I'm also very tempted to just hold till Monday and see if the hyperloop announcement helps at all
Enough about selling, what about buying. Thinking of using some of the profits for more long term 200+ strikes. Thoughts?
Johan
Ex got M3 in the divorce, waiting for EU Model Y!
Yes! But those will be pricey right now so I would consider taking profit now and then just waiting a bit for a better time to buy. I'm not saying the stock will necessarily come back down below $140 or what-not, but if we peak in to the $180's or so it would be hard to fathom that not being a bit temporary. Also, even with the stock in theory trading sideways option premiums for the long term calls will be inflated right now, since there is a lot of focus on the options right now and for the fact that a lot of people will be looking to roll to higher strikes when locking in profits now. It's just my thinking but I won't hurry with buying for example Jan 15 calls.
Great advice. Being patient is the hardest part
I'm also thinking about the tax implications. Wish there was a way to be able to avoid the short term tax rates. Don't have the capital to exercise.
I would consider selling one and holding one if you think the stock peaks tomorrow. If these are a small portion of your total investment and you are hoping to hit it big I would hold them both.
So I'm rather frustrated. Just got off the phone with someone at TD Ameritrade after I received an email from them explaining that they won't approve me for buying calls/puts. I don't get it. I make a low 6 figure salary, have very few debts aside from my house, and already have a small position in TSLA. Is this common? I guess it's too late since I missed today's big move anyway, but I wish I understood what the deal is.
Grats to all those who were able to execute their strategies though. Well deserved.
Grats to all those who were able to execute their strategies though. Well deserved.
That's why you need to fluff up your options trading application; like some people do on their resume when they apply for a job. I just applied 3 weeks ago with Schwab and got highest level 3 clearance. That is advice I got from a smart professor in a MBA program.
InTheShadows
Active Member
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