Wiki Selling TSLA Options - Be the House

[InTheShadows]

When rolling, you are essentially closing a position gone bad for a loss, and opening a new one to cover that loss.
If the stock keeps on going against you, you are digging a deeper hole..

You are only digging a deeper hole if you are rolling for a debit or making your strike worse. If you are rolling for a credit and/or improving your strike then your hole is getting smaller.

However the issue comes down to is keeping that trade series alive a waste of capital that could be invested better elsewhere.

It is extremely important to roll spreads for a credit when your short leg is near the money. Once your short leg gets too deep it’s harder to roll for a credit and once your midpoint of your spread is reached you have to dig a deeper hole by rolling for a debit or third give up on the trade and book the loss.

 

[AquaY]

Thoughts and prayers to you bold traders dealing with call spreads. I literally would've just had a heart attack and died around 2pm. Watching you guys calmly roll is an inspiration. When I dip into your world.........I'm starting waaaaaasay out da money!

Good luck to all.

My advice when trying new strategies:
1) Stay further OTM as you say
2) Have cash/margin reserves to manage
3) As you get more aggressive, go small.. With smaller positions it is easier to manage because it is less emotional when/if they go against you.
You also lose less money if it really goes bad.
4) It's not All or None.
You can have more than one position in the same type of trade.
Have a more conservative safer call spread on and a smaller more aggressive one as you gain experience.
I still do that. I like to have the largest position fairly conservative and then some other positions more with more aggressive strikes

 

[jeewee3000]

My advice when trying new strategies:
1) Stay further OTM as you say
2) Have cash/margin reserves to manage
3) As you get more aggressive, go small.. With smaller positions it is easier to manage because it is less emotional when/if they go against you.
You also lose less money if it really goes bad.
4) It's not All or None.
You can have more than one position in the same type of trade.
Have a more conservative safer call spread on and a smaller more aggressive one as you gain experience.
I still do that. I like to have the largest position fairly conservative and then some other positions more with more aggressive strikes

This is what I try to do for safety: mentally splitting up my available cash (to sell spreads against) into chunks, let's say into 10 equal parts.

Then I allocate, for example:
1 part risky spread with juicy premiums if it turns out to be safe
3 parts safer spread, lesser premium but unlikely to end up ITM
4 parts super safe spread, low premium but almost impossible to end up ITM
2 parts stays cash, to manage things if sugar hits the fan OR to open more positions when direction is clear.

The hard part is resisting thoughts like "If I allocated all 10 parts into "safer spread" I would make more money" . Unlike the Warcraft III cheat code, greed is not good.

 

[mongo]

In retrospect, closing my CCs yesterday morning for a loss would have been a good move (assuming I would at some point in the future sell those shares at a profit). Those CC only existed as an alternative to selling some shares immediately last week (which in retrospect was not the highest return move either, color me wary).

I did have the thought while pondering what to do that rolling a covered call is basically the same as buying a spread (possibly calendar) and adding that to your portfolio on top of the existing position. May help to think about it that way when deciding a course of action.
-900C original covered call
900C -950C new bull spread
=
-950 C

Rolling a spread is like doing that twice, which may run into account restrictions if a new leg overlaps an old leg (trading the same thing in too short a time span)
BCS:
-1000C 1100C. sold bear spread
1000C -1050C. new bull spread
-1100C 1150C new bear spread
-1050C 1150C final position

 

[corduroy]

Well, I didn't get much sleep last night with my brain grinding over my BCS positions. That's the not so fun part of options trading.

I still like the odds of my 1150/-1050s expiring OTM this week so my plan is to keep doing nothing as long as possible. I made decision to not take the early loss and see if I can ride this one out, so I'm sticking with that plan.

For repair possibilities I am looking at, if it appears we start rocketing back up, I can flip roll to BPS 870/-970, which is currently free. Or I can roll to BCS 1190/-1090 for free.

 

[OrthoSurg]

Well, I have been reading this thread for a while to learn from all of your past experiences.

my brokerage finally got all my papers to convert my account for options and I can finally sell my first Bull put spread this morning. Will start far OTM to see my tolerance level and get used to the trading platform.

Had I started last week if my wife did not sent the copy in which my signature was missing, I would have sold a Call credit spread and would have probably ended ITM and would have has a disastrous option trading start and suffered losses like many of you guys.

Hope you guys will recover well from yesterday and good luck to everyone.

 

[tradenewbie]

Well, I didn't get much sleep last night with my brain grinding over my BCS positions. That's the not so fun part of options trading.

I still like the odds of my 1150/-1050s expiring OTM this week so my plan is to keep doing nothing as long as possible. I made decision to not take the early loss and see if I can ride this one out, so I'm sticking with that plan.

For repair possibilities I am looking at, if it appears we start rocketing back up, I can flip roll to BPS 870/-970, which is currently free. Or I can roll to BCS 1190/-1090 for free.

You mean flip roll/free roll to next week?

 

[Tempus]

My main takeaway from yesterday (apart from the $$ lost), is that you REALLY don't know what managing a losing position is like until you actually have to do it facing a rocketing share price and a deeper red position every minute.

I think @adiggs says it at least once a week, but putting smaller but non-trivial amounts at risk to work through your emotions and the mechanics of these rolls/splits/etc... BEFORE you need to is fantastic advice.

I have done it on the put side, but that was my first experience on the call side - you'd think they are the same (and maybe they are mechanically), but the emotion is definitely not, at least for me. I'm way more likely to believe the share price is going to get away from me on the call side, whereas on the put side, i will much more happily roll a losing position assuming we will correct.

 

[st_lopes]

Well, I have been reading this thread for a while to learn from all of your past experiences.

my brokerage finally got all my papers to convert my account for options and I can finally sell my first Bull put spread this morning. Will start far OTM to see my tolerance level and get used to the trading platform.

Had I started last week if my wife did not sent the copy in which my signature was missing, I would have sold a Call credit spread and would have probably ended ITM and would have has a disastrous option trading start and suffered losses like many of you guys.

Hope you guys will recover well from yesterday and good luck to everyone.

Welcome to the degenerates thread of the forum

 

[jeewee3000]

Well, I have been reading this thread for a while to learn from all of your past experiences.

my brokerage finally got all my papers to convert my account for options and I can finally sell my first Bull put spread this morning. Will start far OTM to see my tolerance level and get used to the trading platform.

Had I started last week if my wife did not sent the copy in which my signature was missing, I would have sold a Call credit spread and would have probably ended ITM and would have has a disastrous option trading start and suffered losses like many of you guys.

Hope you guys will recover well from yesterday and good luck to everyone.

Great news, but be really careful with BPS right now. If the stock were to reverse we could go down fast (cascade of profit taking for example).

I'm looking at BPS to open and only deem -850p a very safe short leg.

Just would be a shame for your first BPS experience to be a frantic one. Best time to sell BPS is upon a dip. Best time to sell BCS is upon a rally.

 

[BornToFly]

If this is true, we were really unlucky to see that much of an SP increase yesterday, which makes the losses harder to swallow. It means I wasn't a complete idiot when I opened the position.

 

[jeewee3000]

Nice steady pre-market action. No drama (for now).

My sold 1050 cc's still have some hope left. Not rolling until SP were to hit 1045 or so.

Rold my 10/29 1050cc to 11/5 1080cc for $1.49 credit, since we hit 1045 so fast.

 

[pz1975]

Just as an FYI, $1500 weekly calls are selling for $0.75 or so. Probably less now with the SP down but I sold a bunch for $0.87. THAT is a price I am sure we won’t see this week.

 

[euro2012]

Well, as it continued to rise this morning I took the loss on my BCS. It will likely reverse now, so get ready to sell some BPS!
Mine were 1000/1100 btw, the call side of an iron condor. Put side is doing great, but it pales in comparison to the loss.

 

[FS_FRA]

Missed the sharp rise on open, but then STO 11/29 CC 1300 @ $2.065 - peanuts, but way OTM (famous last words.....) and safe for Friday, me thinks....

 

[InTheShadows]

If this is true, we were really unlucky to see that much of an SP increase yesterday, which makes the losses harder to swallow. It means I wasn't a complete idiot when I opened the position.
View attachment 725928

No doubt they will do that again too. Wait until FSD goes wide release. Elon called that one with a tweet a week ago.

 

[jeewee3000]

BPS not paying enough for me to open any. I'm holding out for a red day.

 

[InTheShadows]

Just as an FYI, $1500 weekly calls are selling for $0.75 or so. Probably less now with the SP down but I sold a bunch for $0.87. THAT is a price I am sure we won’t see this week.

Famous last words. I hope it closes Friday at 1499 so your calls are good.

 

[ammulder]

I'm trying to stick a small toe in the water for 11/5 put spreads, but so far my orders haven't filled. Stock price is a little choppy, but choppy to the up side, it would seem.

 

[OrthoSurg]

Welcome to the degenerates thread of the forum

Yes, everyone seemed to be having fun till yesterday.

I hope it won’t turn into a WSB loss porn print screens of devastated portfolios