Wiki Selling TSLA Options - Be the House

[Cherry Wine]

I called Fidelity, they said the positions were thinly traded, causing them to sit. They cancelled, sent in another order with more, that also didn't fill. If they are put to me, i eat 10x the roll cost. It so bothersome that the same strikes filled earlier in the day for many more contracts. The only upside, albeit at a significant cost, this one will be off my plate.

What strikes?

 

[intelligator]

What strikes?

Jun '23 -383.33p/250p , going to jun '24 , same strikes... .60 left in the short position.

 

[enslaved robot]

Frustrating, decided it is better to have to manage items are year out then just see SP keep dropping ...

So I sold Jan 24 CC's 500-550 against a large chunk of Jan 24's in my IRA account , and added Jan 25 250's with the proceeds. Jan 25 250's are off by at least 30$ in past 2 weeks, where as jan 24 are off by maybe 2-3$ from 2-3 weeks back.

Will be happy if I get opportunity to manage these a year from now. time will tell ...

+ Added 25 Jan 25 CC's ... now I am HODL for a year with this OPM trade
++ so maybe now SP decides to go up. If I cry next year atleast it will be tears of joy

9 Jan 25 280's here. I like your thinking.

 

[elasalle]

The Chartmaster says Tesla stock is primed for a breakdown

Carter Worth of Worth Charting looks at the charts for Tesla stock. With CNBC's Melissa Lee and the Fast Money traders, Bonawyn Eison, Karen Finerman, Dan Nathan and Guy Adami.

www.cnbc.com

Everyone piling on .. starts with some TA/chart patterns ... but most of the remaining commentary is from known haters

 

[Oil4AsphaultOnly]

The Chartmaster says Tesla stock is primed for a breakdown

Carter Worth of Worth Charting looks at the charts for Tesla stock. With CNBC's Melissa Lee and the Fast Money traders, Bonawyn Eison, Karen Finerman, Dan Nathan and Guy Adami.

www.cnbc.com

Everyone piling on .. starts with some TA/chart patterns ... but most of the remaining commentary is from known haters

Oh, I love their low-quality opinions! Makes me want to go get a job just so I can buy more shares!

 

[kabin]

The Chartmaster says Tesla stock is primed for a breakdown

Carter Worth of Worth Charting looks at the charts for Tesla stock. With CNBC's Melissa Lee and the Fast Money traders, Bonawyn Eison, Karen Finerman, Dan Nathan and Guy Adami.

www.cnbc.com

Everyone piling on .. starts with some TA/chart patterns ... but most of the remaining commentary is from known haters

The must own cybersecurity stocks are getting pounded too. Other than energy stocks and maybe healthcare there's not much sacred these days.'

And you gotta love those chart guys with those all important lines. Stock prices comes down to straight linear lines with easy narratives.

 

[OrthoSurg]

NASDAQ 5% above 52 week low. We are at 52 week low. We usually drop 4X Macro. Not good.

What I’ve learned this year is that company fundamentals don’t mean a thing. Clearly we can go much lower. If CPI is bad this week I don’t know what will happen.

In retrospect, CPI data had the same effect as the world shutdown when covid started, it ripped the bottom out and obviously we have no more strong support level. This was a very sad day for the stock price. I don’t know if I should sell my whole position and buy puts, this seems like what the market wants me to do, to )$@% me up.

 

[juanmedina]

Bullish?

https://twitter.com/x/status/1589792332030672896

Many of us feel like throwing the towel maybe the bottom is near. Good luck.

 

[OrthoSurg]

Bullish?

https://twitter.com/x/status/1589792332030672896

Many of us feel like throwing the towel maybe the bottom is near. Good luck.

I just realized SPY and QQQ were up today, while TSLA is down 5%. My 300 new shares of META went up 6.5%

Market is to disconnected from reality I really don’t know what to do anymore.

 

[Yoona]

I just realized SPY and QQQ were up today, while TSLA is down 5%. My 300 new shares of META went up 6.5%

Market is to disconnected from reality I really don’t know what to do anymore.

never ever give up

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[Max Plaid]

So even after the roll and doubling the contracts you still want the $10K weekly credit? when will you roll? I wonder how much of a strike improvement will you get by doing the ratio roll.

In a rapidly-rising SP scenario I'd be OK to sit-out some weekly income. If this were to play-out to the extreme, i.e. have to roll up for a month, let's say, then the SP would be back in the high 200's, after which writing -c300 weeklies would be bad on the cards, and for those I don't care if they exercise, or not

And of course one could also write some puts on the way up to bring a little cash in

I'm trying to be especially careful right now. After a disastrous start to the year, I recovered to decent profits, I don't want to make one silly move and put a big dent in that. Come January, I'll be able to be more creative again

 

[Max Plaid]

not-advice

cash flow vs. income, in an option selling context


Something that I try to remain diligent and aware of is the difference between the credit received when opening a new short option position, and the realized gain/loss at the end. In accounting terms I see this as being the difference between the income statement and the cash flow statement. In the accounting world, each is tracking and reporting on a different idea. Both are important, and neither are sufficient for understanding the health and success of an entity.

For option buyers there is no difference - cash goes out when you open a position, and cash comes back when you close the position. Cash flow and realized gain/loss are effectively the same, so no particular special tracking is needed.

However for the option seller we get cash up front ALONG WITH a liability. If nothing changes then the liability matches the cash, and at some point in the future you give it back. You had positive cash flow up front, and matching negative cash flow later. The problem of course is that with cash in hand, we can go spend it on something. And then get to the end of the position and realize that we don't have the cash on hand to handle the negative cash flow.


I've tried a variety of methods for managing the dynamic for myself, while keeping it simple.

The first is a trading rule, that roll transactions are for net credits. I may be facing a steadily growing liability as a trade works against me, with some of that liability having been realized and some not, but at least my cash balance is steadily increasing. But if I focus on the credits exclusively then it can be easy to forget that it IS a losing position - I'm really just taking on a more and more risky position, with an expectation of reversal in the share price leading to a full reversal in the very bad losing position.

More recently, where possible, I am disaggregating DITM rolls. I'll open a new position with currently unused resources that I want to be in, and use the proceeds WHEN REALIZED (not the credits!) to close 1 or more of those DITM contracts. The net result is the same - I open a new position and use it to replace some or all of an old / losing position. The difference is that I'm ensuring a net realized gain and cash flow by using the realized gain at the end of the new position. Well - as long as the new position I'm opening are also winning.

Big picture its really the same as a roll or one of the multitude of other healing trades that we've talked about over the thread life.
a) we have a bad position we don't want to just realize the loss on
b) "roll" the position by realizing the loss on the bad position, and simultaneously opening a new trade that is big enough that the incoming cash offsets (plus a little bit - the credit) the cost of closing the bad position.

The net on these rolls is a new position that is, invariably, far far riskier than a position we would open as a starting point.

For me at least, thinking about rolls in this way makes it a lot easier to disaggregate the roll as long as I have the resources to have the new and old positions simultaneously.

Such as selling 10cc with backing for 100cc. When that goes bad, 10 additional cc can be sold at whatever desirable strike and price of the moment is, and then use that gain when realized to buy out some of the original 10cc. Or use the open of the additional 10cc to offset some debit on the original 10cc to get the original 10cc to a better strike.


Something else that I've noticed with roll, and other multi-leg tickets - though I haven't pursued deeply. As best I can tell a multi-leg ticket requires a limit price because the multi-leg ticket will either fill at the limit price or it won't fill. If you offer to sell at 2.00 on a multi-leg ticket, the market will provide a binary response in the form of a 2.00 fill, or an open transaction.

With single leg tickets your broker / market maker will sometimes improve on the limit you set. This is another reason I like to disaggregate roll and multi-leg tickets when its reasonable / easy to do so. I can come out the worse for it, but at least my market orders won't go 'bad' on my because of fast movements in the underlying that don't make it into the trade ticket info.

Indeed, I always like to roll while while taking some profit out of the original position, even if it's just a few cents, it accumulates over time

Another possibility with DITM trades, especially when you've been caught out on a sudden move, is to roll them far out, park them in 2025, this can facilitate either a strike much closer to the money and/or reducing the number of contracts, putting them out of the equation in the short-term, and can increase margin, for those that use it - and this needn't be a permanent situation, when the SP moves favourably, you can always roll them back closer, if it suits

 

[SebastienBonny]

I've quite a lot of TSLA shares with cost basis of $300, which I obviously don't want to sell down here

I have a weekly realised profit target of $10k, which can be achieved quite often selling 10x -cATM's, but with the inherent risk that they go ITM

Now I was thinking, if that were to happen, I could ratio roll, adding extra contracts to push the strike up much more than a straight roll, could be 10x -> 20x, then 20x -> 40x the week after, then 80x, after which I can't double-up any more, but could go 1.5x with 120 contracts

This would require a weekly relentless rise in the SP for almost a month, which we've seen before, but at then end the strike price would be substantially higher than now and probably close to the cost)basis, a few "free rolls" if needed would likely put them into profit

I don't know of any tool that could model it, anyone have thoughts on this approach?

Does it even make any sense what I wrote?

Looks like a very good idea and planning to do the same, obviously with a way lower amount of contracts .
10, 20, 40, 80... Or 1, 2, 4, 8 is the same anyway.

I'm debating all the time whether to wait for a bounce or just go ahead and sell cc even on a heavy red day.
Sometimes you just have to go for it and having the possibility to roll and add extra contracts to keep stacking income and getting strike improvement for the rolls just makes things way easier.

The only thing I would do different is going 5% or more above SP and not ATM. Less premium, but less risk as well.
When SP reaches strike price, I would roll to next week for a (5%) higher strike and double the number of contracts.
The rolled contract could cost you, but the new contract at the same strike price will add premium so this will always be a credit transaction (if you roll in time and not when, deeply, ITM).
Going up by 5% (or like 10 dollars) weekly would need a lot of contracts if we go to 300, but missing income for one or two weeks isn't such a problem, so you can roll break even as well when SP keeps on rising.

 

[intelligator]

From Friday night options pricing for this week, snapped Sunday, and Monday end of day... continued negative gamma , more volatility... probably explains well wider bid / ask and orders taking longer to fill, less liquidity???

 

[kabin]

The 40k X/S vehicle loss of steering power assist recall isn't helping this morning. Rough road induced so probably not an over the air s/w update.

 

[Max Plaid]

The 40k X/S vehicle loss of steering power assist recall isn't helping this morning. Rough road induced so probably not an over the air s/w update.

It's OTA, apparently

 

[bkp_duke]

The 40k X/S vehicle loss of steering power assist recall isn't helping this morning. Rough road induced so probably not an over the air s/w update.

We so need another term for OTA "fixes" besides recalls.

 

[Max Plaid]

We so need another term for OTA "fixes" besides recalls.

Tell the NHTSA...

 

[mongo]

The 40k X/S vehicle loss of steering power assist recall isn't helping this morning. Rough road induced so probably not an over the air s/w update.

Caused by OTA, fixed by OTA.
Issue was too sensitive a calibration value for steering motor torque that would trigger if front end was suddenly loaded by a bump or pothole.

We so need another term for OTA "fixes" besides recalls.

It is a recall (Federal reqt) addressed via OTA.
Need legislative change, but that can create a lot of ambiguity if initial attempt at fix is wrong.
https://static.nhtsa.gov/odi/rcl/2022/RCLRPT-22V818-6624.PDF

 

[bkp_duke]

Tell the NHTSA...

Tried. They stopped taking my calls . . .