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Wiki Selling TSLA Options - Be the House
- Thread starter adiggs
- Start date
AquaY
Member
Buckminster
Well-Known Member
I'm holding sold 700P for this week... Thought I had been clever by getting in after yesterday's dip - huge premium - look at that 700 put wall. Now I get to learn how to roll like all you cool kids.
corduroy
Active Member
Already sold as many BPS as I'm comfortable with, then I broke my rule of never buying short term options and bought a bunch of 8/27 $800s for .40
NOT-ADVICE. Like for real - me putting some information together and thinking out loud to help me think choices through.
I'm also not loving what's happening today. I'm also not planning to do anything today, but I did want to do some game planning. The bulk of my positions are 570/670s that currently have a value of $30-$10 = $20 (opened yesterday at $14 net, previously opened for about $6) and an Aug 27th expiration.
I'm going to pretend they are different, deeper ITM positions, to see what some different roll options would be if and when I find myself deeply ITM.
(Note that all of these premiums are approximately the mid point of the bid/ask and then rounded to something easier to add and subtract - directionally accurate, while not being precise or even necessarily positions that can be filled).
If these were 640/740s then they would be about $15 OTM on the insurance put, or $85 ITM on the short put. That'd be pretty ugly. In that case the current position would be about $89 - $16.60 for a net of $72.40.
Rolling that straight out 1 week to 9/3 would be a 91 - 21.70 position or 70.30 (net debit to maintain the deeply ITM position for another week). If I rolled that up to 650/750 then it would be 100 - 26 or $74. I could get a small net credit by going further ITM.
Alternatively I could expand the spread somewhat to 630/740 and be in a 91 - 18 = $73. This expanded spread size will increase my maximum loss to $11k per spread from $10k.
Either of these roll choices designed to continue picking up premium will also yield a worsening position week by week, putting me on a clock for a recovery in the share price - much as selling puts using margin would.
(Big assumption - that I can use the option chain today to mimic an $85 ITM position, and have that be a close enough approximation to what I would see if the situation actually arose, to make decisions now).
If I were to roll out to Sep 17th then the 640/740 would be 95.70 - 29.70 = $66. So the rolling possibilities get worse by adding more time, though the amount worse per week might be decreased (I haven't done that math).
I think that the dynamic that's happening here is that when past the midpoint in the spread ($690 in my made up 640/740 spread; or 620 in my actual positions) is that time value on rolls of the insurance put is increasing faster than the time value on the short put.
Let's test that! The shares are at $655 and what luck - there are 605/705 strikes available for both 8/27 and 9/3. If my actual position was this 605/705 put spread then I would be looking at a current position with 8/27 expiration of 57.50 - 7.30 = 50.20. To roll that to 9/3 would put me into a 61-11 = $50 position.
Going with the 9/17 expiration instead I am again amazed to find a 605/705 available (I expected multiples of $10) with prices of 67.80 - 17.50 = 50.30 for this new position.
That's close enough for my purposes - it looks like rolls that improve the situation are available through the halfway point in the spread, at least on the $100 spreads I am using, and they turn into rolls that worsen the situation past that halfway point.
Again NOT-ADVICE; draw your own conclusions, do your own research, make your own decisions, and experience your own consequences
EDIT: I had 605/750 originally and that was wrong; the rest of the corresponding info was correct for 605/705.
I'm also not loving what's happening today. I'm also not planning to do anything today, but I did want to do some game planning. The bulk of my positions are 570/670s that currently have a value of $30-$10 = $20 (opened yesterday at $14 net, previously opened for about $6) and an Aug 27th expiration.
I'm going to pretend they are different, deeper ITM positions, to see what some different roll options would be if and when I find myself deeply ITM.
(Note that all of these premiums are approximately the mid point of the bid/ask and then rounded to something easier to add and subtract - directionally accurate, while not being precise or even necessarily positions that can be filled).
If these were 640/740s then they would be about $15 OTM on the insurance put, or $85 ITM on the short put. That'd be pretty ugly. In that case the current position would be about $89 - $16.60 for a net of $72.40.
Rolling that straight out 1 week to 9/3 would be a 91 - 21.70 position or 70.30 (net debit to maintain the deeply ITM position for another week). If I rolled that up to 650/750 then it would be 100 - 26 or $74. I could get a small net credit by going further ITM.
Alternatively I could expand the spread somewhat to 630/740 and be in a 91 - 18 = $73. This expanded spread size will increase my maximum loss to $11k per spread from $10k.
Either of these roll choices designed to continue picking up premium will also yield a worsening position week by week, putting me on a clock for a recovery in the share price - much as selling puts using margin would.
(Big assumption - that I can use the option chain today to mimic an $85 ITM position, and have that be a close enough approximation to what I would see if the situation actually arose, to make decisions now).
If I were to roll out to Sep 17th then the 640/740 would be 95.70 - 29.70 = $66. So the rolling possibilities get worse by adding more time, though the amount worse per week might be decreased (I haven't done that math).
I think that the dynamic that's happening here is that when past the midpoint in the spread ($690 in my made up 640/740 spread; or 620 in my actual positions) is that time value on rolls of the insurance put is increasing faster than the time value on the short put.
Let's test that! The shares are at $655 and what luck - there are 605/705 strikes available for both 8/27 and 9/3. If my actual position was this 605/705 put spread then I would be looking at a current position with 8/27 expiration of 57.50 - 7.30 = 50.20. To roll that to 9/3 would put me into a 61-11 = $50 position.
Going with the 9/17 expiration instead I am again amazed to find a 605/705 available (I expected multiples of $10) with prices of 67.80 - 17.50 = 50.30 for this new position.
That's close enough for my purposes - it looks like rolls that improve the situation are available through the halfway point in the spread, at least on the $100 spreads I am using, and they turn into rolls that worsen the situation past that halfway point.
Again NOT-ADVICE; draw your own conclusions, do your own research, make your own decisions, and experience your own consequences
EDIT: I had 605/750 originally and that was wrong; the rest of the corresponding info was correct for 605/705.
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Bought some calls for a small speculative dabble, and to gain experience with this kind of situation: 35x090321C800 at $1.24 to harvest on the way up prior to expiration. Surely some gain is possible in the next 17 days, although since the purchase I’m seeing more indication that this NHTSA thing will probably not resolve very quickly. Guess the bet was that it won’t be considered that material after the initial swoon (also due to other factors).
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Yup.NOT-ADVICE. Like for real - me putting some information together and thinking out loud to help me think choices through.
I'm also not loving what's happening today. I'm also not planning to do anything today, but I did want to do some game planning. The bulk of my positions are 570/670s that currently have a value of $30-$10 = $20 (opened yesterday at $14 net, previously opened for about $6) and an Aug 27th expiration.
I'm going to pretend they are different, deeper ITM positions, to see what some different roll options would be if and when I find myself deeply ITM.
(Note that all of these premiums are approximately the mid point of the bid/ask and then rounded to something easier to add and subtract - directionally accurate, while not being precise or even necessarily positions that can be filled).
If these were 640/740s then they would be about $15 OTM on the insurance put, or $85 ITM on the short put. That'd be pretty ugly. In that case the current position would be about $89 - $16.60 for a net of $72.40.
Rolling that straight out 1 week to 9/3 would be a 91 - 21.70 position or 70.30 (net debit to maintain the deeply ITM position for another week). If I rolled that up to 650/750 then it would be 100 - 26 or $74. I could get a small net credit by going further ITM.
Alternatively I could expand the spread somewhat to 630/740 and be in a 91 - 18 = $73. This expanded spread size will increase my maximum loss to $11k per spread from $10k.
Either of these roll choices designed to continue picking up premium will also yield a worsening position week by week, putting me on a clock for a recovery in the share price - much as selling puts using margin would.
(Big assumption - that I can use the option chain today to mimic an $85 ITM position, and have that be a close enough approximation to what I would see if the situation actually arose, to make decisions now).
If I were to roll out to Sep 17th then the 640/740 would be 95.70 - 29.70 = $66. So the rolling possibilities get worse by adding more time, though the amount worse per week might be decreased (I haven't done that math).
I think that the dynamic that's happening here is that when past the midpoint in the spread ($690 in my made up 640/740 spread; or 620 in my actual positions) is that time value on rolls of the insurance put is increasing faster than the time value on the short put.
Let's test that! The shares are at $655 and what luck - there are 605/705 strikes available for both 8/27 and 9/3. If my actual position was this 605/705 put spread then I would be looking at a current position with 8/27 expiration of 57.50 - 7.30 = 50.20. To roll that to 9/3 would put me into a 61-11 = $50 position.
Going with the 9/17 expiration instead I am again amazed to find a 605/705 available (I expected multiples of $10) with prices of 67.80 - 17.50 = 50.30 for this new position.
That's close enough for my purposes - it looks like rolls that improve the situation are available through the halfway point in the spread, at least on the $100 spreads I am using, and they turn into rolls that worsen the situation past that halfway point.
Again NOT-ADVICE; draw your own conclusions, do your own research, make your own decisions, and experience your own consequences
EDIT: I had 605/750 originally and that was wrong; the rest of the corresponding info was correct for 605/705.
At midpoint you can roll for free. Below for a debit, above for a credit.
Solution: widening & take more risks. This lowers the midpoint for successive rolls. Downside: costs more margin. Strategy against it: if sp rises shortly after the roll, you can roll up the lower leg to regain margin. Best if you pay less for the roll up than you gained in credit for rolling out & taking risk.
Why I know this?
Guess who is in a pickle right now.... -.-
InTheShadows
Active Member
Thanks for that analysis. I une one spread I haven’t been able to roll yet and I found out exactly what you described above is true. It’s a 650/700p for this week. Rolling out to 9/17 was way more expensive than to roll it out to next week. I am just going to ride it out now.NOT-ADVICE. Like for real - me putting some information together and thinking out loud to help me think choices through.
I'm also not loving what's happening today. I'm also not planning to do anything today, but I did want to do some game planning. The bulk of my positions are 570/670s that currently have a value of $30-$10 = $20 (opened yesterday at $14 net, previously opened for about $6) and an Aug 27th expiration.
I'm going to pretend they are different, deeper ITM positions, to see what some different roll options would be if and when I find myself deeply ITM.
(Note that all of these premiums are approximately the mid point of the bid/ask and then rounded to something easier to add and subtract - directionally accurate, while not being precise or even necessarily positions that can be filled).
If these were 640/740s then they would be about $15 OTM on the insurance put, or $85 ITM on the short put. That'd be pretty ugly. In that case the current position would be about $89 - $16.60 for a net of $72.40.
Rolling that straight out 1 week to 9/3 would be a 91 - 21.70 position or 70.30 (net debit to maintain the deeply ITM position for another week). If I rolled that up to 650/750 then it would be 100 - 26 or $74. I could get a small net credit by going further ITM.
Alternatively I could expand the spread somewhat to 630/740 and be in a 91 - 18 = $73. This expanded spread size will increase my maximum loss to $11k per spread from $10k.
Either of these roll choices designed to continue picking up premium will also yield a worsening position week by week, putting me on a clock for a recovery in the share price - much as selling puts using margin would.
(Big assumption - that I can use the option chain today to mimic an $85 ITM position, and have that be a close enough approximation to what I would see if the situation actually arose, to make decisions now).
If I were to roll out to Sep 17th then the 640/740 would be 95.70 - 29.70 = $66. So the rolling possibilities get worse by adding more time, though the amount worse per week might be decreased (I haven't done that math).
I think that the dynamic that's happening here is that when past the midpoint in the spread ($690 in my made up 640/740 spread; or 620 in my actual positions) is that time value on rolls of the insurance put is increasing faster than the time value on the short put.
Let's test that! The shares are at $655 and what luck - there are 605/705 strikes available for both 8/27 and 9/3. If my actual position was this 605/705 put spread then I would be looking at a current position with 8/27 expiration of 57.50 - 7.30 = 50.20. To roll that to 9/3 would put me into a 61-11 = $50 position.
Going with the 9/17 expiration instead I am again amazed to find a 605/705 available (I expected multiples of $10) with prices of 67.80 - 17.50 = 50.30 for this new position.
That's close enough for my purposes - it looks like rolls that improve the situation are available through the halfway point in the spread, at least on the $100 spreads I am using, and they turn into rolls that worsen the situation past that halfway point.
Again NOT-ADVICE; draw your own conclusions, do your own research, make your own decisions, and experience your own consequences
EDIT: I had 605/750 originally and that was wrong; the rest of the corresponding info was correct for 605/705.
We all are. -$685/+$675P from an iron condor.
I closed the call side for $0.10 and now managing this put credit spread. I'm already at max loss of like $790. No roll will gain a credit out in time so I might take the loss and continue to open lower bps to make the money back slowly.
I closed the call side for $0.10 and now managing this put credit spread. I'm already at max loss of like $790. No roll will gain a credit out in time so I might take the loss and continue to open lower bps to make the money back slowly.
I opened up a few more BPS 560/600 and sold 720cc for $1 against my shares. I will sell calls against my LEAPs tomorrow. I bought a Jun 23 $1000 call for fun. I am down $8k on my $690 puts but the BPS should more then cover that if it goes well.
Definitely lots of us in a pickle, my 620p/-685p are not very happy right now, though the action prior to close helped. I guess I'm glad I proactively rolled them forward a week as I was able to get a much better premium than if I did now. I also opened some 580p/-630p BPS for this week.
Can you guys check something for me at your broker?
I just for fun clicked in a Dec 900/700 BPS. This thing will get me 15k for only 4k margin. Downside-risk: only 5k.
Or Dec 900/500 BPS. Even though the SP is under the midpoint (700) this thing has a delta of 0.665 and a positive(!) theta of 0.011. 14k margin, but still 17k to fall for max-loss while only bringing in 23k max-gain.
Do you get similar margin-impacts? Or is it just because my portfolio is already weird?
I would have expected more margin and a way worse theta..
I just for fun clicked in a Dec 900/700 BPS. This thing will get me 15k for only 4k margin. Downside-risk: only 5k.
Or Dec 900/500 BPS. Even though the SP is under the midpoint (700) this thing has a delta of 0.665 and a positive(!) theta of 0.011. 14k margin, but still 17k to fall for max-loss while only bringing in 23k max-gain.
Do you get similar margin-impacts? Or is it just because my portfolio is already weird?
I would have expected more margin and a way worse theta..
TDAmeritrade:Can you guys check something for me at your broker?
I just for fun clicked in a Dec 900/700 BPS. This thing will get me 15k for only 4k margin. Downside-risk: only 5k.
Or Dec 900/500 BPS. Even though the SP is under the midpoint (700) this thing has a delta of 0.665 and a positive(!) theta of 0.011. 14k margin, but still 17k to fall for max-loss while only bringing in 23k max-gain.
Do you get similar margin-impacts? Or is it just because my portfolio is already weird?
I would have expected more margin and a way worse theta..
Dec 900/700 BPS = 15.3k premium, $4.6k max loss and margin
Dec 900/500 BPS = 23.1k premium, $16.8k max loss and margin
AquaY
Member
Etrade Seems to be similar.Can you guys check something for me at your broker?
I just for fun clicked in a Dec 900/700 BPS. This thing will get me 15k for only 4k margin. Downside-risk: only 5k.
Or Dec 900/500 BPS. Even though the SP is under the midpoint (700) this thing has a delta of 0.665 and a positive(!) theta of 0.011. 14k margin, but still 17k to fall for max-loss while only bringing in 23k max-gain.
Do you get similar margin-impacts? Or is it just because my portfolio is already weird?
I would have expected more margin and a way worse theta..
900/700 BPS Dec $15,265 credit, Margin impact -$4,736 Max loss $4,735
Buckminster
Well-Known Member
Interactive Brokers seems similar -Can you guys check something for me at your broker?
I just for fun clicked in a Dec 900/700 BPS. This thing will get me 15k for only 4k margin. Downside-risk: only 5k.
Or Dec 900/500 BPS. Even though the SP is under the midpoint (700) this thing has a delta of 0.665 and a positive(!) theta of 0.011. 14k margin, but still 17k to fall for max-loss while only bringing in 23k max-gain.
Do you get similar margin-impacts? Or is it just because my portfolio is already weird?
I would have expected more margin and a way worse theta..
Dec 900/700 BPS = $4,548 margin impact
Dec 900/500 BPS = $16,604 margin impact
InTheShadows
Active Member
So am I wrong in thinking this is 0 risk free money to the tune of $10k? That doesn’t seem right to me. Am I doing something wrong with the math?Can you guys check something for me at your broker?
I just for fun clicked in a Dec 900/700 BPS. This thing will get me 15k for only 4k margin. Downside-risk: only 5k.
Or Dec 900/500 BPS. Even though the SP is under the midpoint (700) this thing has a delta of 0.665 and a positive(!) theta of 0.011. 14k margin, but still 17k to fall for max-loss while only bringing in 23k max-gain.
Do you get similar margin-impacts? Or is it just because my portfolio is already weird?
I would have expected more margin and a way worse theta..
my IBKR account is also in line with yours, although one can manipulate margin requirement quite easily on a PM account with cheap weekly put. Also means that, depending on how many cheap weekly puts I already have, I can get this margin impact close to $0 but then I also have to maintain the same number of weekly puts all the time to retain the effect.
Can you show your rough math?
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