Wiki Selling TSLA Options - Be the House

[bxr140]

LOL I forgot about the margin calculator. Yeah the 2x $400 +Ps will make a +18% change in excess margin for me. The puts will cost $2 each so not so cheap but not so bad.

Yeah its a bummer to have to back into this kind of position, because the +P's will directly reduced the capped profit you would have made on the original sale of the -P's. (So you're tying up the same amount of capital for less profit) And, because the +P strikes are so far away from the -P's they don't really help you too much on offsetting losses if underlying keeps going down (∆ on the -P will be way higher than the +P).

If you're not already, you might as well make use of the double-dip on margin and sell calls as well, even if they're way OTM such that you're just using their sale to offset the purchase of the +P's. (You can also buy +C's with the proceeds from the -C sale to fix the margin requirements on the top side)

 

[st_lopes]

If the spread width is too large then yes, the bought puts are irrelevant to your margin...other than the fact that they generally reduce your available margin by as much as their purchase price (which of course is small relative to a sold put).

Having more +P's than -P's is irrelevant to margin in the context of creating a put spread to reduce the margin on an otherwise naked put. The additional +P's may slightly reduce your total portfolio ∆ (if they're way OTM, not by much) but that's not something your broker cares about; that's just you managing your portfolio ∆.



It is VERY unlikely that a $200 +P bought against a $610 --with underlying at $6XX--will ever come close to reducing the margin requirements for your -P. Your broker should have a tool to calculate margin requirements, including what would happen if you sent XYZ trade on top of your existing positions. I would guess you need to be at least at $400 for the +P to materially reduce margin requirement on your $610 -P, but I'd also double check that before running out and buying a $400. The big kicker is that the calculations get worse the farther ITM the -P is, so the more the underlying drops, the higher your margin requirements become. That's because your exposure to the underlying 100 shares remains the same (you owe 100x strike) but your exposure on the -P becomes greater (if you were put shares early, you essentially eat the negative value of the -P).



No, that falls into both the #1 and #2 notes from my earlier post.

1: You're creating a $650 wide put spread, which would normally require $65k margin for each spread. A naked $850 -P is probably only going to require ~$30-40k (total guess) of margin, so the $200's do you no good.

2: Because the +P's are closer in expiration than the -P's, your broker still sees your portfolio has having excess margin exposure, because on 3/6 when the +P's expire, you're back to a bunch of naked -Ps.

And, as noted above, the quantity difference is irrelevant for what you're trying to do. (More +P's may or may not be a benefit to other greeks, but that's another conversation)

 

[adiggs]

I am curious as to when someone on this thread will be selling June?

Sometime in May (me that is).

 

[samppa]

Hi!
Something I would like an opinion on.. I have the following Iron Condor, expiring tomorrow: (not much money on this, it's more a learning process..)
720 long call
700 short call
620 short put
600 long put

Judging from pre-market, stock will most likely blow way over my 700/720 spread. At least today. Who knows, might reverse tomorrow.. I could
Options I see:
- roll the put side to a higher strike for credit, eg. 660/680, be prepared to take a little loss (but will be smaller loss). Risk is that if stock reverses tomorrow, it could blow below that.
- close both sides today, possibly brake-even
- buy back the short call, and bet that stock will end up over 720 by tomorrow.
- do nothing
- close the put side, roll the long side to next week and higher strikes
Opinions on alternative ways to handle this?

 

[bxr140]

Opinions on alternative ways to handle this?

Less an option and more a general strategy: Generally its a good idea to close a side when it gets above a profit threshold. That protects profit on that side of the position from a reversal. Doing so also better enables you to split the unprofitable side into a new (in this case) Iron Condor, ostensibly with more favorable strikes.

You can still adjust the sides independently even if you don't close one out, you'll just end up with a tighter spread. In such a situation bookkeeping is a good idea, as you'll likely roll one of your sides at a debit...so if you adhere to "never roll for a loss" game, you'll want to roll the other one for equivalent credit.

I guess for more specific alternatives, IF you think price is going to at a minimum hold through tomorrow, one thing you could do is move some of the value of your call spread down to your put spread. That would necessarily increase both the -P strike so you'll have less downside room, but it will increase the -C strike so you'll have a little more comfortable space for upward price movement

Another alternative is to open up the spreads a little bit while rolling them up (specifically the call spread, if you're worried about upward price movement). Just as a random example, your 700/720 call spread has the same value as a 705/735 call spread. Obviously the latter requires more margin, and certainly moving the strike just $5 might not be worth it, but you get the point. Combine with the above concept (moving value from the call side to the put side) and maybe you get your -C strike to a sufficiently comfortable place.

 

[bxr140]

A couple other thoughts I had over the past day:

1. When considering buying s put to manage margin on a -P, consider underlying movement probability as well. For instance, if you think underlying may continue down, you may want to buy a strike close to and potentially even higher than the -P, and potentially one farther out in expiration than the -P [as opposed to the classic strategy of buying a DOTM +P]. What this can do is basically net-zero the new position profit with further drop in underlying so your account balance doesn't draw down any further. It can also create a revenue source which can enable you to roll down your -P strike without doing so at an account-balance level loss. Obviously that kind of position is worse [than a DOTM +P] if underlying reverses immediately and starts going back up, but you can further protect from that scenario by building a call position as well, whether its simply a +C (LEAP or whatever) or some more complicated spread.

2. With respect to "I don't understand the risk of selling puts", I think a huge part of it that I probably haven't properly explained is the opportunity lost by tying up capital. I'm of the opinion that its always good to have cash on hand for buying opportunities such as the one we're going through now, including having stop losses to free up cash at the beginning of a downturn. Some folks have talked about stepping into more shares as price goes down, some folks probably are buying calls/long spreads at some 'down there' underlying price. Whatever one's method, the one truth of the market is that its always going to reverse at some point, and capitalizing reversals--both big and small--is where smart money makes money with short term trades. If someone has a ton of capital tied up in underwater position that can only ever return its [relatively small] maximum profit at some hopeful point in the future, one's best possible outcome for a pullback is to not lose any more money.

 

[st_lopes]

I’m starting to develop an appreciation for avoiding small premium sold calls (thanks @adiggs).

My 750s have held up in premium a lot more than I would have liked and for much of the day were underwater. Decay took hold late in the PM, but again not as much as I would have liked. I ultimately rolled them to 770c 03/19 for an $8.85 credit (0.21 delta at time of sale), clipping 17% of the previously sold premium (sold premium was only $1.8). Theta on those two positions was near the same, so definitely felt like a trade in the right direction.

I'm still holding on to some 730c 03/12 as I wasn't intending to re-initiate those in to next week. They have decayed nicely, confirming my bias towards selling higher premium calls going forward. I intend to sell some share lots to convert them to leaps over the next couple weeks, hence not rolling the 730s.

 

[Yoona]

Hi!
Something I would like an opinion on.. I have the following Iron Condor, expiring tomorrow: (not much money on this, it's more a learning process..)
720 long call
700 short call
620 short put
600 long put

Judging from pre-market, stock will most likely blow way over my 700/720 spread. At least today. Who knows, might reverse tomorrow.. I could
Options I see:
- roll the put side to a higher strike for credit, eg. 660/680, be prepared to take a little loss (but will be smaller loss). Risk is that if stock reverses tomorrow, it could blow below that.
- close both sides today, possibly brake-even
- buy back the short call, and bet that stock will end up over 720 by tomorrow.
- do nothing
- close the put side, roll the long side to next week and higher strikes
Opinions on alternative ways to handle this?

If you did nothing, it's a win! My IC 640-750 also expired worthless. Thank you, TSLA.

 

[Towly420]

Hey guys!
Interesting read on the margin requirements of a naked put.

I sold a risky $865 put before the down-journey began, got $30 premium for that and was ready to let assign the stock if the stock would be something around $800. Well we all know what happened afterwards...
It was an interesting journey, seeing my portfolio jumping from $70k to $35k back up to $60k in some weeks. Something that helped me going through this was this thread. Especially addiggs described how he sometime rolls his -P / -C like forever.

Well and that is what I started. Rolled two times down and out, always 2 weeks out and $5 down for additional $10 premium.

I still was bullish on the stock and bought some calls during the dip. Also I had to maintain my margin with a $600 +P, that’s kind of annoying. My broker would want the full $855 (!) for the -P or the difference of $855 - $600. To reduce the margin I rolled the -P kind of “far” out now, to $820 in May (and sadly the +P too). I think there were many people far under water with -Ps the last weeks, please continue to share how you managed your positions!

Thanks all and cheers

 

[Stretch2727]

Trying to take the emotion out of my strategy. Close to retirement, recently change to a less stressful but lower paying job, but no need for income right now. Trying to figure out the best strategy for retirement.

I have diversified some of my gains out of TSLA but would still like to hold a large position and diversify further if it makes more large gains and buy back in if it declines.

My general strategy for some income against the TSLA holdings. I just started a few weeks ago.

Hold a targeted fixed $$ amount in TSLA. It's a fairly large position.
I sell 2 layers of weekly puts and calls that put me at approximately at the same $$ amount for TSLA if they assign. The price goes up the calls sell the shares, the price goes down the puts buy the shares.

For instance for March 5th I have sold 1 contract of the following:

Layer 1 Strangle
715C
650P - Assigned
Layer 2 Strangle
750C
625P - Assigned

If the options go ITM, I let them assign.
If both sides are OTM I will usually roll everything. Actually pretty rare. My position will not change as the the selling and buy points are based on my target $$ amount and the number of shares I hold.
I will usually try to adjust the trade every Friday for the following week. If one side is ITM I will assume it will assign and will open a new position for the following week.
Have plenty of shares for the covered calls. As well I make sure I have plenty of cash to secure the puts. I have other diversified index ETF's in the same account I can sell if I need cash. Had to do this with the recent stock decline.

I usually get $3-4K per week, but also benefit by buying low and selling high. It will keep me in a fixed $$ amount of TSLA which I comfortable with in my overall portfolio. As well does not take too much of my time so I can actually retire at some point.

My trade for this week for expiring March 12 options below netted about $7.4K today. I am assuming the puts from last week will assign so I picked up 200 shares in a down week. I sold a bunch of my index ETF earlier in the week so I have cash for the puts. You do need a bunch of cash to make this work especially in a down market. The volatility greatly increased the premiums!

Layer 1 Strangle
645C - Assigned
590P
Layer 2 Strangle
670C - Assigned
570P

So for this week the calls from March 12th will assign. So selling 200 shares. In an upweek.

Early this afternoon I sold the below, again picking up $7.5K for the week. Actually I sold the March 19 700C earlier in the week for $40 to capture more time value as it looked like the calls from this week would assign (they will). If the stock dropped and my calls did not assign for March 12th I was going to roll it down and pick up even more premium. The puts from last week were rolled up so I did not need more cash to cover for today.

For March 19th

Layer 1 Strangle
700C
640P
Layer 2 Strangle
740C
615P

Last 2 weeks have been great for the premium. Again I am trying to hold a fixed large dollar amount of TSLA, diversify out as the stock rises but buy back in when it drops. So far happy with how this is working. You could also say the total premium from the puts and calls added $37.5 to the price of each assignment this week. I like that there is really no decisions to make. The call and put strikes are based on keeping my Tesla holdings to a fixed dollar amount ($1.5M) and I just let them assign as the stock moves.

 

[adiggs]

I’m starting to develop an appreciation for avoiding small premium sold calls

The more I've been thinking about this, the more I find myself thinking about selling straddles (both sides ATM). I'm not there yet . I do have the opportunity though.

I'm finally having access to roll retirement accounts over into a Rollover IRA. I plan to be managing that account using this same overall strategy even though it's going to be ~8 years before I have unrestricted access. There is an easy argument to make that I would be better off just buying shares and waiting 5-15 years.

My intent though is to keep this account closer to 50/50 shares/cash and manage using these semi-permanent strangles. My rationale includes:
- More and faster experience that will help all 3 accounts I'm managing this way
- Risk mitigation. If I'm ~50/50 shares and cash, then I'll miss out on roughly 1/2 of moves to the upside. I'll also miss out on ~1/2 of moves to the downside. I think of this as part of the reason the typical financial management recommendation for people in retirement includes a significant chunk of bonds (but not all of course).
- And maybe what makes this easy - I could just lose 100% of this account and it won't really affect my retirement. It would have a noticeable impact on how much we get to donate over the remainder of our lives. What I get from that isn't to turn up the risk - its to use this account to better explore the income generation from this semi-permanent strangle so I learn faster and have a more complete education and experience for when things go south on me (which they will - there's no such thing as free money).

Something that helped me going through this was this thread. Especially addiggs described how he sometime rolls his -P / -C like forever.

This is an important motivation for starting this thread. I know I've learned from others experiences and insights about what is possible, and then gone and explored it for myself -- such as these deep ITM rolls. I never really expected these to work as well as they have so far. And my own motivation is income to live on in retirement - it isn't maximizing growth. I can trade away a lot of growth for a good income - that won't work for many and its important for each of us to understand where we're at on that scale.

 

[adiggs]

My current big position is a March 19 790/615 strangle. Both legs are ITM right now, and they are quite a fair bit ITM.

And that has gotten me thinking about art of the possible and how I might handle this in the coming weeks.


The put leg is actually the easiest for me despite being ~$100 ITM. With both legs ITM, I'll be rolling the put for whatever net credit and strike improvement is available but not worrying about it beyond that. The primary risk that I see in this approach is a combination of opportunity cost and being careful about too much cash being tied to those puts.

This is also the account that is current our source for monthly income, so having unencumbered cash (or margin) is important - house, car, food, shelter - these things don't stop. Oh - and taxes. We're about to be sending in our biggest tax bill by far in another month. This is the too much cash component.

The opportunity cost arises from the shares trading down. If they were to continue trading down to $500 and then $400, etc.., then this $790 strike put won't be traipsing along, and I won't be able to take assignment at $500 for some cheap incremental shares (which I would very much like to do). More shares would be really nice, but is fairly far down my list of priorities.

This leg is easy for me as the worst case - I keep rolling along (maybe shifting to monthly rolls from 2 week rolls) until the share price comes back. My investment thesis says this is inevitable.

This is also a small change from my plan a week or so ago - I was getting ready to take a net debit to roll this for a lot more strikes for the opportunity cost reason - were the shares to keep going down, I'd like to be able to buy more (take delivery on some puts) to benefit from that. With the move back up, those net debits have been mentally reassigned to the call leg though


The call leg has become a "problem" though, despite being a serious cash generator for 6+ weeks. Many of my 2 week trading windows have seen 2 highly profitable call legs get opened and closed. But now I'm reasonably far ITM so I don't expect much in the way of net credits from the next roll and maybe for a few rolls.

The overall plan for the next roll is to tighten up the strangle and probably take a net debit on the call leg to move it much closer to the share price.

The call leg is where I am the most sensitive to being far ITM. The basic problem is that whatever strike the put leg is at, I consider it inevitable that the shares will and go above that strike. Even if it takes a couple of years, besides the opportunity cost, I've got no problems with that and my view on TSLA and Tesla is such that I have no emotional worry about how its going to play out.

But the call leg - if I "lose contact" with the share price, then there is no theoretical limit to how far behind the share price I can get. And in my investment thesis, far and fast moves to the upside are to be expected and have been personally experience by me two times ($6 to $36 post-split in 6 months; and the more recent move from $80 to $800 depending on how broad you want to make that window). I consider $5000/share by 2030 to be, if anything, conservative. Even with fewer total shares, I still want to benefit in a big way from that $5000 share price. To do so, I need to keep the call leg at least reasonably close ITM. Up to and including using the net credits from the put leg to 'help out' the call leg. OR even reaching back to previous profits and spending some of those to help out the call leg.

So though I didn't do anything today, when I start thinking about a roll on the call leg next week, I will be strongly considering a net debit roll. I don't like being most of $100 ITM as I am right now as another $100 move will still be short of where we've been recently, and would put me even deeper ITM and start being at risk of losing contact.


And the last observation I have, tying back to something @st_lopes commented on, these deep ITM positions that can appear are why I don't like far OTM / small premium options; particularly on the call side. I've gone W A Y far OTM on some calls, and still had them go deep ITM in a short time frame. Higher premium calls provide some flexibility in dealing with these (while also increasing the likelihood that they happen).

 

[Chenkers]

I think there were many people far under water with -Ps the last weeks, please continue to share how you managed your positions!

I've been rolling 8 sold Puts for a few weeks now. I've generally been rolling out a couple of weeks and down as much as possible at zero cost. They're currently all at 19th March expiry with strikes between 785 and 820. I'm pretty comfortable with it since I had a similiar experience earlier in the year on the call side. I'd much rather be selling puts and calls together but it's nice to be able to recover from the unexpected and keep earning premiums.

I've had to manage portfolio margin along the way. Buying cheap puts has minimal impact on my margin calculation and I've found selling calls to be more effective. I'm currently maintaining at least 8 sold calls at a time and this is helping keep the margin healthy and some buying power intact.

 

[JustMe]

Guys - I never buy calls because I suck at timing the market, but I had a strong feeling that TSLA was going to bounce back from the $500’s - so I took a chance.

I used some of my my covered call earnings when the stock tanked and bought 11 April 1 $725 calls for about $15 each, leaving me with nine dollars in cash in my account. They’re sitting at 33.50 now. I sold 5 at 22-35, recouping the investment. I plan to sell the remaining 6 next week, hopefully in the >50.00 range if the recovery continues. Best case scenario - enough for a new Model Y.

I’m normally on the other side of this trade selling covered calls. This time the clock is running against me and the wild price swings in these options every day are jarring.

It gives me the heebie geebies!

 

[gabeincal]

Just checking in, it's been a while.

I'm setting up my trading account for regular trading of 2 positions (selling calls and puts).

I've set it up this morning and have plans to keep rolling the losing leg. Positions in the account:

800 x TSLA
-8 x Apr 16 900c
-8 x Apr 16 900p
+9 x Jan '21 1300c
$150k cash
(Margin maintenance excess is at $104k)

My plan is to keep selling equal number of calls and puts with the same expiry date (a short strangle?) and roll the leg(s) that's at risk. Have been holding about -6 puts so far through this major TSLA dip and had no effect on my account, so I think so far it proved to be somewhat safe. Rolling these will likely generate 5 digit $ income every month for my family.

Looking for any feedback or warnings about this.

 

[UltradoomY]

Just checking in, it's been a while.

I'm setting up my trading account for regular trading of 2 positions (selling calls and puts).

I've set it up this morning and have plans to keep rolling the losing leg. Positions in the account:

800 x TSLA
-8 x Apr 16 900c
-8 x Apr 16 900p
+9 x Jan '21 1300c
$150k cash
(Margin maintenance excess is at $104k)

My plan is to keep selling equal number of calls and puts with the same expiry date (a short strangle?) and roll the leg(s) that's at risk. Have been holding about -6 puts so far through this major TSLA dip and had no effect on my account, so I think so far it proved to be somewhat safe. Rolling these will likely generate 5 digit $ income every month for my family.

Looking for any feedback or warnings about this.

The only thing I would be slightly worried about is the early assign from the P side - I would imagine the premium offsets it though.

 

[Yoona]

-8 x Apr 16 900c
-8 x Apr 16 900p

My plan is to keep selling equal number of calls and puts with the same expiry date (a short strangle?) and roll the leg(s) that's at risk.

Newbie question... I am curious about the advantage of -c900 and -p900, plus the work to roll a leg afterwards.

Compared to, say, setting up in one trade -c900 -p690 (if i am assuming 690-900 is closing range).

I ***think*** the same strikes will generate a significantly higher credit, and it's cheaper to just roll a leg later???

What am i missing? Thanks in advance!

 

[bxr140]

Guys - I never buy calls because I suck at timing the market...

I’m normally on the other side of this trade selling covered calls. This time the clock is running against me and the wild price swings in these options every day are jarring.

I think this is a good case study to re-align some misconceptions about buying calls, and awesome that it can be a situation where someone has ~doubled their money in a few weeks as opposed to a kicking the dog kind of thing. Diving into these concepts:

1. I suck at timing the market: This one is echoed quite a bit in this thread and, as you've found, one doesn't really need a complicated algorithm to identify probable direction. At its core directional trading is actually quite straightforward, and if we're really honest with the core of this apple, few if any people out there making the "I suck at timing the market" statement that have actually made a concerted effort to actually try.

The other big part of "I sell options because I suck at directional trading" is a false perception that its all about theta decay. In fact, as is evidence by folks in this thread, much if not most of those profits folks are realizing from sold contracts are actually coming from directional movement. So...if someone is actually making money selling options, they're actually already doing a pretty decent job of "timing the market". And of course, the big rub on this is that ∆ becomes progressively less favorable for profit on a sold contract, versus progressively more favorable for a bought contract...

Further impacting the false perception that selling options is all about theta, a good portion of the non-directional profit folks are taking are from decreasing volatility. (Not to mention that pretty much any profit taking in an increasing volatility environment will be from ∆)

The bottom line for anyone playing the "can't time the market" card is 1) Most folks aren't haven't actually tried to "time" the market" and 2) Most folks are making most of their profit by "good timing" on directional underlying movement.

2. The clock is running against me: It is generally bad practice to buy close expiration contracts because they are a) massively impacted by volatility changes and b) more unfavorably impacted by theta decay. Close expirations can work for VERY short position durations (like day trading) but a general rule of thumb is to not buy options any closer than 3 months expiration, and you are right to think about closing them out sooner rather than later Generally theta will burn off ~10% of the value of those bought options over the course of ~1 month.

3. The wild price swings are jarring: Its good to remember that ~1 bought contract is ~equivalent to ~1 sold contract. The diverging greeks [between sold and bought contracts] of course means that's only true within a small window, but its close enough for the thought experiment. So, your 11 OTM +C's calls are going to move more or less as fast as had you sold 11 OTM -P's. As you might imagine, and as others have shared, if you were holding 11 -P's (or CCs) over this pullback your account balance would have suffered a pretty jarring drawdown.

 

[adiggs]

Just checking in, it's been a while.

I'm setting up my trading account for regular trading of 2 positions (selling calls and puts).

I've set it up this morning and have plans to keep rolling the losing leg. Positions in the account:

800 x TSLA
-8 x Apr 16 900c
-8 x Apr 16 900p
+9 x Jan '21 1300c
$150k cash
(Margin maintenance excess is at $104k)

My plan is to keep selling equal number of calls and puts with the same expiry date (a short strangle?) and roll the leg(s) that's at risk. Have been holding about -6 puts so far through this major TSLA dip and had no effect on my account, so I think so far it proved to be somewhat safe. Rolling these will likely generate 5 digit $ income every month for my family.

Looking for any feedback or warnings about this.

I'm in the setup phase of a new and roughly half sized account. For me this is a rollover IRA as I bring former work retirement accounts under my direct control.

The initial entry is 400 shares at $676 and
-4 x Mar 19 705 calls
-5 x Mar 19 650 puts

The 650 puts reached ~75% profit today and have been rolled to
-5 x Mar 19 700 puts

I chose to keep the expiration the same, mostly because I'd like to roll the calls and puts together and the calls aren't ready. But this situation is closer to a coin flip (the Mar 19 vs. the Apr 2 expiration) for me - 1 full week to expiration could also get rolled out by 2 weeks. If I were rolling that position tomorrow then it would almost certainly be the 2 week roll. As it is I picked up a $14 net credit and turned $6 worth of premium left to earn this week into $20 worth of premium to earn over the balance of the week.

This also leaves me in a 700/705 strangle expiring this week.


I don't have the margin available (IRA) but this is otherwise what I'm doing - I hope it works as well for me

I think that the primary observation I have for others is that in an IRA that doesn't have withdrawals going (my situation) then this 50/50 cash/shares balance is almost certainly a lower return choice than just holding shares. I've got 8 years to go until I have full access to this money and managing it as if its an income source today, and given my own investment thesis, just owning shares will almost certainly outperform. I am primarily managing this resource in this fashion as I think this will do well enough and mostly I want to be generating feedback today with the balanced puts and calls; the other accounts are share heavy and the feedback isn't as good because of that.


My target is slightly more cash value to share value, and to be selling slightly more puts than calls. When there are enough more puts than calls then I'll be looking for assignment on 1 or more put contracts to get back close to even numbers.

As this is new money going to work I have started the account out with my target ratios and get direct and immediate feedback from an account with a balance between shares and cash.

 

[st_lopes]

I’m starting to develop an appreciation for avoiding small premium sold calls (thanks @adiggs).

My 750s have held up in premium a lot more than I would have liked and for much of the day were underwater. Decay took hold late in the PM, but again not as much as I would have liked. I ultimately rolled them to 770c 03/19 for an $8.85 credit (0.21 delta at time of sale), clipping 17% of the previously sold premium (sold premium was only $1.8). Theta on those two positions was near the same, so definitely felt like a trade in the right direction.

I'm still holding on to some 730c 03/12 as I wasn't intending to re-initiate those in to next week. They have decayed nicely, confirming my bias towards selling higher premium calls going forward. I intend to sell some share lots to convert them to leaps over the next couple weeks, hence not rolling the 730s.

Closed the 730 with 0.02 left, 99.98% premium gain. Did not re-initiate since I intended to sell that lot of shares to convert to 3x LEAPs. Made that conversion this morning.

I plan to keep adding to the LEAPs pile until I hit a target delta exposure on those contracts (likely hit it around 20x LEAPs). Currently strikes are all 850 March 2023, but that may move around as I add more to the pile.

To summarize my current approach:

1) Sell 0.2-0.3 delta calls - add shares with proceeds;
2) Continue holding 850p 04/16;
3) Depending on price action and maintenance excess - I will be gradually adding LEAPs from the cash balance in margin account;
4) On roll/close of the 850p - will aim to round off to 20x LEAPs [yes this means I believe we reach these levels again in April];
5) Will look to sell balanced strangles as of that point and use sold premium for opportunistic buys;