Wiki Selling TSLA Options - Be the House

[stealthyc]

closed at a significant loss: 12/23 BPS 995/750

I'm expecting next week to be lower than today (due to being a short week), so I don't expect to see much improvement. I hope this has the same effect as BornToFly's sacrifice?

I'm curious why you would not just roll it for strike improvement or credit? (Though closing it at a loss is obviously the first part of that)

 

[Oil4AsphaultOnly]

I'm curious why you would not just roll it for strike improvement or credit? (Though closing it at a loss is obviously the first part of that)

I only have 2% margin left, and every $30 drop in TSLA reduces my margin by 2%!!! So if the SP drops to 910 or below next week, then I'll get margin called (almost happened yesterday!).

By closing the BPS, I free up margin to be able to ride out any shenanigans for next week.

So how did I get into this boat? Because I sold BCS right after earnings, which was right before the Hertz deal. Then I flipped some DITM covered calls into BPS on the down day after Elon did his twitter poll (thinking that the negative sentiment was done! - didn't wait for the form 4's to VERIFY!). Well, it's been a slow slough of weekly rolls. The good news is that all my covered calls are OTM! The bad news is that all my BPS are ITM and backed by margin.

This year started off SO WELL! Happy Holidays y'all

Edit: Oops! I did the math wrong! I actually only had 2% margin left, not 10%! I think it's time to step away from the screen and sign-off until next year!

 

[Tslynk67]

Well, this is a welcome respite today, no? I think this suits most folks here...

Monday might be a different story, but seems all is well with $TSLA, just the gyre surrounding it that causes all the pain

Close looking like a few cents above $950, is that's the case I will sleep better over the weekend than I did last night

What a game we play!

 

[st_lopes]

What's left to do...

• Manage the 920/870 BPS tomorrow; I'd like to close it rather than roll it to have a clean slate on margin buying power;
• Begin buying back in to leaps and shares with all that cash sloshing around;
• Reset on number of ICs I am selling on a weekly basis once I've repositioned;

Updates of the day...

• Closed the 920/870 at about 30% net gain overall on cumulative credit from rolls. Likely could have squeezed more out of that, but I wanted to get out of that early so I could free up margin to reposition everything else;
• Bought some 1100 01/2024;
• Bought a bunch of shares;
• Sold 1170 12/23 ccs against shares;
• Added 1150/1200 BCS 12/23 to my 830/780 to form IC;

Overall, back to being 80/20 shares/leaps. I never have the patience for dollar cost averaging.

Back to selling weekly ccs against those core positions.

And have enough buying power to do about half the amount of ICs I was able to do before repositioning, and leaving enough buying power to survive a 30% drawdown without getting margin called. Locked and loaded. Let's go Santa.

 

[Tslynk67]

I only have 2% margin left, and every $30 drop in TSLA reduces my margin by 2%!!! So if the SP drops to 910 or below next week, then I'll get margin called (almost happened yesterday!).

By closing the BPS, I free up margin to be able to ride out any shenanigans for next week.

So how did I get into this boat? Because I sold BCS right after earnings, which was right before the Hertz deal. Then I flipped some DITM covered calls into BPS on the down day after Elon did his twitter poll (thinking that the negative sentiment was done! - didn't wait for the form 4's to VERIFY!). Well, it's been a slow slough of weekly rolls. The good news is that all my covered calls are OTM! The bad news is that all my BPS are ITM and backed by margin.

This year started off SO WELL! Happy Holidays y'all

Edit: Oops! I did the math wrong! I actually only had 2% margin left, not 10%! I think it's time to step away from the screen and sign-off until next year!

Can you not trim the position a bit - not necessarily close the whole thing, but remove 10% of the contracts...?

 

[Oil4AsphaultOnly]

Can you not trim the position a bit - not necessarily close the whole thing, but remove 10% of the contracts...?

It is a trim. I have other BPS open for 12/23:
-p1040/750
-p1100/750
-p1220/750

So yeah, my trades were all kinds of DUMB! For every good roll I made, it got paired with a bad flip and/or splits. Timing the market is truly not my forte, yet I still TRY TO DO IT! Oh well.

 

[generalenthu]

Well, this is a welcome respite today, no? I think this suits most folks here...

Monday might be a different story, but seems all is well with $TSLA, just the gyre surrounding it that causes all the pain

Close looking like a few cents above $950, is that's the case I will sleep better over the weekend than I did last night

What a game we play!

The doom and gloom from earlier this AM seems to have marked the bottom and I see we are a smidgen above 950. Volume is relatively robust. We are outpacing yesterday's volume at 2PM by almost 900K shares, and this is even before the closing cross which should be pretty beefy today. Hope Elon is done with another tranche today, which would leave perhaps less than 2 tranches worth for the rest of the year. Seeing a form 4 on TSLA relative strength would be a Christmas Miracle!!

I did roll my 950 puts for today to 920 for next week earlier this week, but would have been so sweet to see them expire. Anyways, sticking with super wide spreads was helpful. My experience of going thru the SEC dark days while operating with margin & options came in handy.

Anyways, good luck rest of the year folks. And for those of you going through tough times, remember it's nothing like what some of the regulars went through, losing family members. And do appreciate all the great things life has on offer.

 

[adiggs]

Note to myself: don't be a greedy idiot.. I really don't need such ridiculous premiums and income I've been getting these past few months. I do not need to take on so much risk.

Something that helps me (though not always!) - as I'm in this for income, anytime I'm unsure about a position / management choice / etc.., I ask myself if this is consistent with an income focus / dividend type result. The answer is in the question, at least for me - if I'm asking the question, then the answer is no. I'm going off the reservation and pursuing a result that is not an income oriented result (too much risk).

Almost always followed by not doing it, or a quick close.

First the good news. I retired today after a consulting engineering career of 30 years and 18 years with my current company, most of it as a Director and owner. Retiring was only made possible thanks to investing in TSLA and particularly the knowledge gained in this thread giving me the confidence that I could continue to earn in retirement.

Now the bad news. I was greedy and not thinking rationally in the second week after Elon started selling. I sold way too many BPS, too close with the strikes and they went deeply ITM at the end of that week when everything went South. I've spent the intervening weeks rolling (largest positions at 1000/1060) trying to buy time for a sustained recovery but the rolling is eating into my cash balances and net liquidity. My main problem is that the portfolio margin IB uses (the only margin they have here) is effectively locking down my accounts, preventing me from earning extra premium. BPS, BCS and even CC's now require a large amount of maintenance margin (BCS/CC are normally negative margin) and I'm already tight. So the rolling eats into cash and I realise if this keeps up for several weeks, my account could effectively bleed out.

I'm mostly rolled out to next week so have some time to wait for a slight recovery. However I'm coming to the realisation I will need to trim back my positions, at least until the margin lets me trade my way forward. This is likely to be expensive and cut very deeply into my overall portfolio. At this stage I will still have enough to work with even at a max loss as long as I can act and soon, hopefully on a partial recovery. I fully expect the stock will rebound sharply in coming weeks but I just can't risk everything waiting on that. I'll be trying everything I know to get the best out of this current position (split rolls, roll down to expire, protective puts etc) and am trying to maintain a positive attitude. I know I can rebuild, but it will take time as it will be done much more conservatively. So be safe everyone, we'll get through this and don't get greedy.

Congratuations on the retirement. Seems like its contagious around these parts

Good luck with cleaning up all the mess. I also got in too deep with BPS when Elon started selling. I was able to take my loss and bail early this week, with that loss lower than the previous week gain. An overall gain for the month made it a lot easier to just take my blocks, go home, and wait to come back when the opportunity was better. I've found that this sort of approach helps me sleep at night, and that comfort / stomach acid level is important to an income focus rather than a capital appreciation focus.

Sidebar: as a side effect of how I'm implementing my income focus, my net delta in the long term shares and purchased calls has been increasing quite a bit. The net result of which is that I'm ALSO accumulating capital in the form of unrealized gains more rapidly as well (as long as the shares are flat to up in the $1100s). It's not a goal but its a nice side effect.

 

[UltradoomY]

Does anyone have experience with options contracts on an SPAC? Looking for an understanding - If I buy a Leap on a SPAC (GGPI/Polestar in this case) for January 2024 - does it convert to a 2024 leap in the new company automatically at the same strike?
I scoured online and don't see anything other than options as in employee options.

Sorry for the OT - but the GGPI 2024 leaps $10 are going for about $7 each...
Feel free to PM as well if you know.

 

[adiggs]

Decided to clear out my 650/850 BPS for next week expiry. In for around 7.30 and out for around 3.25 - a roughly 55% gain.

My thinking is I won't be surprised at a drop on Monday / next week and I'd like to be ready to re-enter, very possibly with the same position. Of course the shares could just go take off, but everything we do has a risk, and this is one I'm taking.


This leaves me with 1000 strike CC for 12/23 expiry. I'm ready and willing to roll these, but I'd rather do that as close to the end of the week next week as possible. I managed to open these at about the lowest / worst price available this week, but they're doing about as well as possible so far. Some of the backing for these are the month Jan calls and I'll be getting REALLY aggressive with them. The big chunk of the remainder are Feb '22 expiry which I plan to be aggressive with, but not as aggressive. I am looking for both gains and high premiums from these, with the downside that I get caught deeply ITM and miss out on some gains.

Opportunity cost losses are real, but in the context of an income orientation, entirely acceptable (at least to me) when they come with more modest share / purchase call gains as well as high CC premiums.

 

[tradenewbie]

Decided to clear out my 650/850 BPS for next week expiry. In for around 7.30 and out for around 3.25 - a roughly 55% gain.

My thinking is I won't be surprised at a drop on Monday / next week and I'd like to be ready to re-enter, very possibly with the same position. Of course the shares could just go take off, but everything we do has a risk, and this is one I'm taking.


This leaves me with 1000 strike CC for 12/23 expiry. I'm ready and willing to roll these, but I'd rather do that as close to the end of the week next week as possible. I managed to open these at about the lowest / worst price available this week, but they're doing about as well as possible so far. Some of the backing for these are the month Jan calls and I'll be getting REALLY aggressive with them. The big chunk of the remainder are Feb '22 expiry which I plan to be aggressive with, but not as aggressive. I am looking for both gains and high premiums from these, with the downside that I get caught deeply ITM and miss out on some gains.

Opportunity cost losses are real, but in the context of an income orientation, entirely acceptable (at least to me) when they come with more modest share / purchase call gains as well as high CC premiums.

Same here, clear out all my BPS (-800/+600, 12/31 expiry), should be a super safe position & probably leave a lot of money on the table, but after all the crazy move this week, and thus prefer to evaluate again early next week.

 

[generalenthu]

87k of the 0 DTE 950s traded today against less than 7k Open interest. Should be interesting to see what happens to these going into closing cross. Looking sticky here.

 

[Oil4AsphaultOnly]

It is a trim. I have other BPS open for 12/23:
-p1040/750
-p1100/750
-p1220/750

So yeah, my trades were all kinds of DUMB! For every good roll I made, it got paired with a bad flip and/or splits. Timing the market is truly not my forte, yet I still TRY TO DO IT! Oh well.

OH! And just to highlight how incredibly poor those flip/split decisions were. IFF I had simply rolled those ITM covered calls out 4 weeks, They would've ALL closed OTM today!

At least that's how I feel now. But hindsight being 20/20. I made the what I thought were the best decisions I could've made, at the time they were made. kicking myself with coulda/woulda/shoulda doesn't help. Just gotta live to trade another day.

 

[vikings123]

87k of the 0 DTE 950s traded today against less than 7k Open interest. Should be interesting to see what happens to these going into closing cross. Looking sticky here.

I’m expecting an eventful power hour, looks like one final MMD before the spike or we go back and test our 930 level. Good opportunity to close my BCS from this morning.

 

[samppa]

It is a trim. I have other BPS open for 12/23:
-p1040/750
-p1100/750
-p1220/750

So yeah, my trades were all kinds of DUMB! For every good roll I made, it got paired with a bad flip and/or splits. Timing the market is truly not my forte, yet I still TRY TO DO IT! Oh well.

I'm in a not so different situation from you.. now everything has been rolled to 12/23. Well, hopefully the pain eases after Elon has finished all his selling.

Hang in there.

 

[JustMe]

Yay I needed a day like today

I bought two $920c this morning but sold them two minutes later for a quick $700 profit. I don’t even want to know how much money I left on the table with those, if I’d only held for a couple more hours. A win is a win.

I was a bit green in the gills this morning over 880/830p I was holding for 12/24 watching TSLA tickle $900 overnight. Happily made my profit target on them this afternoon and closed them out.

Fingers crossed for a good week coming up but like most I’m waiting until Monday to open any new positions

Cheers

 

[M3Rider]

87k of the 0 DTE 950s traded today against less than 7k Open interest. Should be interesting to see what happens to these going into closing cross. Looking sticky here.

I don’t know what is going to happen, because my broker closed 49 out of 50 of my -950/850 spreads 50 minutes before the market close before I could do it myself.

I had 100k+ of margin left, no margin calls prior and this is the first time something like this happens to me. I’m very puzzled.

It worked out ok, I just don’t understand the logic behind it. Maybe I should call them.

 

[UltradoomY]

I don’t know what is going to happen, because my broker closed 49 out of 50 of my -950/850 spreads 50 minutes before market close before I could do it myself.

I had 100k+ of margin left, no margin calls prior and this is the first time something like this happens to me. I’m very puzzled.

It worked out ok, I just don’t understand the logic behind it. Maybe I should call them.

Definitely call them!
Also please let us know what broker you use!

 

[wooter]

Hi everyone!

Is it a good week to start selling options? I just put my first trade in, jan 7 -890p +870p after going through the 3 OptionAlpha tracks from the 1st post. I did break the rule about only applying 1-5% of my resources to one position, though, but seeing this is $TSLA and Elon should be wrapping up his selling, I feel it's a calculated gamble. Or not.

 

[stealthyc]

I don’t know what is going to happen, because my broker closed 49 out of 50 of my -950/850 spreads 50 minutes before the market close before I could do it myself.

I had 100k+ of margin left, no margin calls prior and this is the first time something like this happens to me. I’m very puzzled.

It worked out ok, I just don’t understand the logic behind it. Maybe I should call them.

They will do that if they are concerned that the price will end up ITM and if you don't close them they will have to exercise the purchase of 4.75M worth of shares which you cannot afford. Thus they close enough to bring you down to an amount that you could cover. I believe almost all brokers will do such a thing, though the timing varies from broker to broker.