pz1975
Active Member
Yes. All binary events cause IV crush after the binary event has happened.
-
Want to remove ads? Register an account and login to see fewer ads, and become a Supporting Member to remove almost all ads.
Wiki Selling TSLA Options - Be the House
- Thread starter adiggs
- Start date
dc_h
Active Member
I'm teting the IV crush. I sold a single long term cc (230616@1000 for ~140) and BTC 10 7/23 calls that I had rolled out after last weeks rise. I think the numbers will be positive, but could have some downside. If earnings are 7/22 though, I think we could blow past 750. After the numbers, there could be a tank and then rebound. It is possible that China began exporting in the last week or two of the quarter, so deliveries could be lower, but those exports could add another 6000+ cars for Q3 and really add to results.
Ahh right margin maintenance fair enough. So not fully naked I guess. Although I guess no brokerage lets you go fully naked. Otherwise you would just sell 1000000 TSLA $100's or something for easy money lol.
How did you go with the price action during trading hours today? I actually sold one more 710. Could be eating my words today but still feeling like if we are going to break 700 it'll be a Monday break and not a Friday break. MM's will short that stock into oblivion to keep it under 700. Volume is so low right now it's easy to manipulate.
I could get a portfolio margin account and sell lost of naked puts but I don't really want to play with fire.
I end up closing everything that I had for tomorrow, $750s, $740s, $710s and $700s after 3:30pm when they lost some decent value fast; I had an overall profitable week so far. I didn't have to close the $750s and $740s but I thought if we get a big bump tomorrow I might be able to sell the contracts again for some extra cash and the premium that was left in them was not much. The $700 I took a $50 lost per contract so no big deal and the $710s a $200 lost per contract but I only had four of those contracts which it will easy to get back. I kept the 5x $710s for next week because I didn't want to take the lost on those and maybe with the IV crush tomorrow I can close quickly tomorrow for much less or if we go down they can expire worthless or if we go way up too fast I guess they will get rolled again. Yeah $700 is a strong resistance. I end up selling some $575 puts like @pz1975 suggested, that was some really good premium for being 15% OTM with one day left to expiration.
Sorry mate. Monday market is closed heh. I'm in Australia so forgot about your holiday.
My trading account with IB has portfolio margin but since i'm 100% TSLA, selling TSLA puts actually really seems to throw off the maintenance margin requirements. Even selling 1 put (Strike below) drops my maintenance by about 30% and my purchasing power (on 15% Margin rate) by 200k. So I can't really sell many puts unfortunately. Depends on broker I guess.
Damn out of curiosity how much were the 575 puts?
Yer earlier in my options selling career I had a real problem closing contracts at losses so I ended up rolling or doing these silly things. However exactly like you said, if it's a small loss, selling more contracts the week after actually recovers those losses. So I'm a lot more open to just biting the bullet. Last week was a tough week for me and for anyone who sold CC's I think. Lots of biting the bullet then.
So on my trading account, what I actually did to somewhat hedge my 700 and 710's was sell a 670 put. The math I did in my head seemed to make sense as long as the stock doesn't drop more than a few % Points I can just sell the assigned shares and still come out even or ahead after factoring in premium for the put + the 700 CC Contracts (I think 650 is break even after premiums). If it goes up, well as long as it stays under 710 I can buy the shares back at break even after factoring in premiums. But to go from $680 to $710+ the deliveries would need to be like 240-250k i think.
I'm also in Australia trading on a coupe of accounts with IB. I used to sell a lot of margin backed Puts but have since moved to Iron Condors as I seem to get much more premium and flexibility. For example on Monday in my SMSF account I sold 50 x 620/650 750/780 IC's for just under $5 each. These are currently sitting around 50% profit and have a maintenance margin impact of just under $50k. Possibly an option to consider?
If deliveries total 240k, 750 instantly, if not 780.
For the stock to hits 710 we only need 210k
50x 30 x 100 = 150,000.
Are you sure about maintenance margin being $50,000?
Btw, that was a bold/great pick of strikes, amazing return $5/$30margin.
Do you kind sharing why you Picked those strikes, even though we have P&D numbers coming out today? Was the plan to close Thursday?
The $575 were $80 bucks each.
I tried to sell 575/565 put credit spreads instead of the puts but the order would not go through not matter what I tried.
I've been selling in and out of cc$750s this week, skimming some intra-day premiums. I decided to sell 45x cc$705s this morning, thinking the MMs will do everything possible to keep us under $700. I miscalculated the timing to hit a big potential home run (for me) as I sold them a little early for $1.67 only to watch them more than double within 5 minutes, but will consider this week a really good one if I can close them out for a few cents this afternoon.
Nice move. I didn't put attention to options today but there were some nice deals... $750s for next week hit $5.75
.
I was only quoting what the current maintenance margin in my account for that IC was at yesterdays close. It was likely higher at open but maybe not as high as you've quoted as IB uses portfolio margin. Btw that IC has current MM of $37k and should BTC at around 99% profit. With IC's once the strikes are chosen you need to judge how many to sell based on available margin buffer. Maintenance Margin (MM) can drop rapidly if the Put side goes ITM so there needs to be plenty of buffer left in your account. I've started closing some older Puts and BPS's this week so looking forward to making use of the extra MM for next week.
The pick of strikes was relatively easy and was based on the Jul2nd O/I chart on Monday. As I posted in the main thread then, there was a really strong Put wall at 650 and strong Call walls at 700 and 750. I fully expected the 650 and 750 walls to hold and it now looks like the 700 will too. So I consider the strikes chosen to be relatively conservative based on the options market at the time. I could have rolled either side in a bit but have just left it run for this week.
Last edited:
It could be your brokers options permissions for spreads. Another issue in some cash accounts can be having enough cash to cover one side of the spread. Do a single check order selling the 575 Put and buying the 565 to check margin impact and see if it gets accepted. Then you can increase the number of spreads to the number you want or until you hit a limit.
Very few shares left to write calls against (other than some with $839 basis LOL), and all written have been rolled to 0709. All I could do today was buy shares <$680 in a BenIRA and write 2x070221C685 for a possible $1.6 6-hr gain (if assigned).
I been selling spread for a while on that account but maybe there was not much volume on those contract idk. I had the order set for 69x spreads and only two of them when through, my limit order was set below the mid ask/bid. I gave up and open up the straight naked puts obviously for much less.
Expected IV crush for options expiring today and next week. So much so that selling premium for next week looks pretty unappetizing at this point. Have a bunch of CCs at 670 for July 16th expiry that are nicely up. In 2 minds on whether to cover them here.
Last Q was similar, where there was a pop of 30 pts due to a bigger surprise. while we cooled a bit the week after, it still went up another 60 pts before earnings came in as estimates were revised up. There may be a somewhat similar action this time around, though a bit muted. I think there is some substance to Gary's prognostications that estimates may be revised up a bit, leading to an upward bias.
Last Q was similar, where there was a pop of 30 pts due to a bigger surprise. while we cooled a bit the week after, it still went up another 60 pts before earnings came in as estimates were revised up. There may be a somewhat similar action this time around, though a bit muted. I think there is some substance to Gary's prognostications that estimates may be revised up a bit, leading to an upward bias.
Ok, where is that $#&&$*+*-&& shrimp and that crazy lawyer? Thankfully, you won’t be joining neuralink anytime soon.
Well, in all seriousness, I actually did sell some p720s (@$45) but then rolled them during a MMD down and out to 7/9 for a nice $5 profit. I also bought/sold p670s, p680s, p690s, p710s, p715s and finally ended up selling some c700s, c705s, c720s (let expire worthless). Though it doesn’t make up for last week’s fiasco, I did manage to clear $14K this week, mostly on puts. I’m currently about 50:50 puts:calls, but expecting to pick up some more shares and allow a couple of puts to get exercised, to get to 30:70 next Friday.
This week was all about timing, not perfectly, but close enough. I bought back puts right after a morning peak, waited a bit to resell, often at a lower strike and a higher premium.
Stayed close to ATM, or even ITM, thus picking up lots of premium, especially with the elevated IV before the P/S report. Rinse and repeated nearly everyday. This is something that I rarely, if ever, would consider on the call side. I was literally daring the MMs to put me the shares. In the end, I decided to roll everything out to 7/9: p670 at $14.20, p680 at $23.00, p700 at $24.20. While I don’t expect a huge SP bump next week, I will likely buyback those puts on AM peaks and resell after the MMD, again daring the MMs to put me those shares. As for selling calls, I might try c730s at a GTC price above $6.00.Good luck to all and have a great weekend. Another two weeks above 100F in my future and the surrounding forest fires have started. Air quality is still acceptable, nothing like last fall (yet). It’s difficult to get much gardening done in this heat, just a few hours in the early AM, then it’s inside until it’s time to spot water all the almost crispy plants.
Similar threads
