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Wiki Selling TSLA Options - Be the House
- Thread starter adiggs
- Start date
I've only written 30% of available puts and 18% of possible calls, so lots of wiggle-room if I need to add contracts to facilitate rolling
thenewguy1979
"The" Dog
Got it. Basically rolling around the stock covered options and getting paid to do so. Thanks big dog.
Well sold puts have a return which is limited to the premium you received, bought calls have unlimited profit potential
However, long options also have the tendency to expire worthless, whereas short positions can be rolled
And it's the option sellers that usually make the money, 85% probability I believe
But sure, if you get the long options just right you can get spectacular returns
thenewguy1979
"The" Dog
More posturing. Something big is coming. Hope it's up as that where my kibbles at........
IMO, in keeping with "being the house", sell the puts (but as CSP, NOT BPS). If you think SP reaches 260 in 2 weeks, then sell a -260p instead of buying a +260c. If you're wrong about direction or speed, you can always roll it out and down. No such plan B with buying calls.
"Better" is a broad idea!
There is $ gain.
There is % gain.
There is stomach acid.
There is the energy and research that goes into picking that position.
There is the ongoing energy (and stomach acid) of watching and making the follow on decisions to manage the position.
How precisely do you need to get the direction and magnitude right?
You'll notice that I don't have any suggestions
. My answer to this question, yesterday, was to sell some -230p for next week. That's not really a "capture the upside" decision - that was more of a weekly income decision, and a readiness to buy shares at $230 (really wishing I'd bought some back at $215 when they were available).
A -260p is going to have a high delta and low time value. Winning with that will come from a share price move in your favor (rather than just waiting for time to elapse) - that's pretty aggressive
That being said I've used somethign like that to win bigly in the past. Pre-pre-split - I think it was a 1 year -600p that I sold when shares were around $430. Big up front income - I finally got a 2/3rds win after about 6 months.
Heck - if we get to another low point I need to consider that trade again!
I'm taking the opposite side of this. In for 15x 12/15 +c260s for $1.30, turning some already sold 12/15 -c270s into a bull spread. Tried for $0.90 earlier today but missed it by $.06. Looking to open more +c260s if we get some weakness into the close.
Real example - today I BTC 60x -c240, what if I had waited, well now they're trading about the price I sold them for, which would be OK as they were hedging the -p240's, so break-even on those was quite acceptable. However, if wanted to roll to next week any of these would recuperate the cost:
60x 12/8 -c240 @$4.50 ->
30x -c240 @$8.5, so half the number of cotracts, already significantly reduced exposure
60x -c247.50 @$4.70, same nulber of contracts, but better strike
120x -c255 @$2.3, more contracts, better strike
315x -c265 @80c, maxed-out on my contracts, very nice strike, but no more wiggle-room if the SP goes to $270, etc.
Of course one is also playing the opposite side with short puts, which essentially doubles your money, halves the risk, as only one side can lose. With $5 taken for the short puts and calls, it allows for a $10 move above the call strike or below the put strike, so 230 - 255 is OK, although 240 - 245 returns 100% profits
A -260p is going to have a high delta and low time value. Winning with that will come from a share price move in your favor (rather than just waiting for time to elapse) - that's pretty aggressive
That being said I've used somethign like that to win bigly in the past. Pre-pre-split - I think it was a 1 year -600p that I sold when shares were around $430. Big up front income - I finally got a 2/3rds win after about 6 months.
Heck - if we get to another low point I need to consider that trade again!
Well, Jim did ask for a preference for "capturing upside".
Well, chalk one up for GEX resistance giving a decent edge again. SP held below confluence of highest OI, highest +GEX, absolute +GEX @$245. Couldn't be clearer.
As of now, based on option flow the same confluence moves up to $250 for next Friday 12/15. DYODD.
12/15
12/15
As of now, based on option flow the same confluence moves up to $250 for next Friday 12/15. DYODD.
12/15
12/15
Interesting that the “same confluence” moves up to $250 while max pain moves down to $225 for next week.
thenewguy1979
"The" Dog
We ended the day at $243.84. MM sure did killed off all those 245 250C holders. Let see if they can do the same next week for the 250C holders.
BIAS is still on the upside as we continue to make higher low and net gain on the daily.
My doggy eyes still see a cup and handles. 250 so close but yet so far.
BIAS is still on the upside as we continue to make higher low and net gain on the daily.
My doggy eyes still see a cup and handles. 250 so close but yet so far.
thenewguy1979
"The" Dog
Yes, I noticed the reward to max lost ratio also is better when adding the other side. Since you get credit from both side and you'll always be "winning" one side thus the the lost is reduced. But it does add another layer of complexity in managing the extra legs in term of closing or rolling out. More so for me as I make them 2 or 4 legs to bound the max loss.
What's I'm been doing lately is seeing how stocks posture going into earning. If the bias is bullish I sell ITM Puts couple days before earning. Then offload them before actual earning and make some kibbles from decay and SP rise. Not sure if it's a good long term plan but at least it's not just a singular directional play.
With Tesla I relied on the collective minds here to defined min and max and set that as the basis for the plays. So far it's proven hella better then just using this singular small dog brain
Have a great weekend guys. Thanks for me this dog a little smarter every day. Next week going be wild.
SpeedyEddy
Active Member
Normally I do, but because I always sell one side, without safetynets, I only sell things I am at least a bit sure about. At the moment, MA4x divergence is in play, but I am not convinced enough about the direction to go full Monty, but I will, later. Monday is the third day, that presumably will be my land-mark day on which I possibly will start trades at maximum risk, like selling P260 and above, just a few months out and maybe even buying nice amounts of OTM calls, positions that nobody will advise to make and I will strongly advice NOT to copy. Maybe I will not even publish them, because there is nothing to learn (taking ridiculous risks..)and it goes beyond being the bank, what this thread is all about.Being chickened is the secret of longevity in this game….mmmm chicken
Sidelines - being the house is much more fun. Way less profit but way less risk and more consistent winning. All my sold contract for the week going into earning for Roku, LuLu, and GME are in green.
Tesla Stock posturing again. Maybe MM really want to weed out the 245C holder?? Little dog might need to bite the beast in the ass again to get it going.....
And I plan to close every position that is 10% down as failsafe, if possible (Overnight I will be vulnerable)
Magic 8 ball says, sounds bout right.
thenewguy1979
"The" Dog
Might be we go up to 265 then drop from there. Aligned with Wicked Stock.
That would nearly a $100 drop. Good to go long or opportunity for those buying the dips. Not a bad situation then.
Going to be wild either ways. Break 279 or down to 170…..coming soon we will know.
That would nearly a $100 drop. Good to go long or opportunity for those buying the dips. Not a bad situation then.
Going to be wild either ways. Break 279 or down to 170…..coming soon we will know.
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