New to options game -- June 2022 1800 call is up near 200% right now. Do I sell or continue to hodl?
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trading
- Thread starter Boomer19
- Start date
None of us can decide this for you. Both choices can be reasonable.
If you bought the options for a short term trade, and expect this to be a short term high, then selling is a good plan.
If you bought the options, because you believe TSLA will go well north of $1,800 by Jun'22, then perhaps it's not such a good idea, unless you think the risk/reward is no longer worth it now that the option is worth 3x what it originally was.
If it was meant to be a short term trade, why would he buy June 2022 LEAPS? Makes no sense. Of course he should continue holding.
Less risk if you're wrong.
Like if you think something big will move the SP in the next few weeks or months, you can buy calls one month, or a few months out. If you're wrong you'll lose nearly all of it, and if you're right you might 3x, 10x, or more depending on how right you were.
You could also instead opt to get the highest strike price option available at a far out date. They still provide quite a bit of leverage, so you can still fairly easily 2x, 3x, or 5x your investment, sometimes more. But if you're wrong you won't nearly lose all of it. You might even break even. And you'll also have the option to hold onto the option longer if you decide that's prudent.
Like in early December if you bought $600 options expiring early February, obviously you would've made 100x or something, but that's super super risky. If instead you bought Jan'21 $600 options, you likely still would've 20x or 30x easily, but with far less risk. If the stock had only gone to like $400 by early Feb you would've still made money on the Jan'21s.
I haven't really used this strategy myself, but I think it can make sense as a swing trade if that's your thing. If you think something might happen in the near to medium term, but you're not confident enough to get options with near term expirations.
This is/was exactly my thinking. The volatility is crazy in the market right now. I know TSLA will hit 1800, its just a matter of when. I did not think we would be touching $750 a share this soon again, my conundrum is to lock in the profits (200% gain) now or just wait for this to all blow over. The problem with options is the time decay element. Lets say TSLA trades flat in the $700 range for the next 3 months until this blows over, my 200% profit is 50% less.
Thank you for your thoughts Frank.
If you bought more than one, sell enough to make your money back.
I have learned over the years, try to protect what you have is key. Also it is HARD to sell when you THINK, your option is going nowhere but in whatever direction will make you some money. That is not always the case, and cost a lot of us investors/traders lots of money over the years. Even now though, I find it hard to sell, when I have made a good profit. But remember, easy come, easy go.
I have very little confidence in my ability to predict the short term, but with that being said:
I'd guess the rest of this week will be dominated by MM trying to keep as many options OTM as possible, so a close just under $700 seems like it could be in the cards.
Usually, the stock will cool down a bit leading up to earnings as people await the results of that, but big news could change that. Also, macros are still pretty volatile, so that could also move the stock one way or the other.
In short, It could go up, down, or sideways.
jeewee3000
Active Member
If you're trying to play the ER (also known as pure gambling), we cannot tell you how it will turn out.
Many of us on TMC here seem bullish (I know I am) but given the latest recovery to the $700 level it is hard to predict if a good Q1 is priced in yet.
Personally I took some short term profits on tuesday when we hit $730 for the first time. That small portion of profits will be kept as dry powder for after the ER in case of a drop.
It’s my new home thread!
Was used to posting daily actions in the round table. Glad this exists now.
I’m about to open 100k on 5/15s if TSLA acts as I think it will today, If not, wait til tomorrow. (I don’t want it but think red today occurs)
I feel the buy volume today has been exceptional and will protect the share price, and hoping we can build rapidly to earnings.
Was used to posting daily actions in the round table. Glad this exists now.
I’m about to open 100k on 5/15s if TSLA acts as I think it will today, If not, wait til tomorrow. (I don’t want it but think red today occurs)
I feel the buy volume today has been exceptional and will protect the share price, and hoping we can build rapidly to earnings.
Ben. Like you, I'd like a new Tesla Roadster. Can you help me with that? What's the single best resource about learning about options other than YouTube videos by nitwits in rented Lambos? I'm farrr up on TSLA stock and want to get into options but I know it's not for n00bs.
p.s. I'm Bananarama on Peloton. lol
p.s. I'm Bananarama on Peloton. lol
Are you buying with some expected stock value in mind, like TSLA hits $1000?
Looking at the prices, $850 options at ~$50 each would get you better ROI at $1000 than $900 options at ~$40 each and an earlier break even point. Of course, if it hits $1100 then that's not true. Interesting, $800 options aren't any better than $900 options on ROI if the stock hits $1000.
$850 options don't have the trade volume $900 does, but it's still pretty heavily traded (you'd mentioned wanting a strike with high volume).
I’m pricehutchins
just started n waiting for treadYou can follow me to the poorhouse or the yacht - I can’t promise anything! But I’ll post my real life positions and say what I’m going to do BEFORE I take them, not after to pump myself. (This forum isn’t changing option pricing no offense meant)
Already scored a fully loaded X. It’s name is STONKS. Trying to convince wife we need a semi.
Regardless imma yolo hard today or tomorrow...waiting for red.
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I look at option pricing and want to accelerate to that pricing faster than the decay or downside, but also want to stay out of the money, or very close to in the money in worst case. I try to beat the volatility to boost myself from it.
My goal is to inflate and sell something that is worthless.
So I try to pick high upside days and sell when that occurs. I don’t hold this stuff, which is why I aim high.
And I’m literally holding no positions in anything now (except Jan 2021c for Tesla and 100 shares which is just baseline for me)
Attached shows today’s results. Flipped equity a few times for a few hundred no options at play.
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Ah, so you're buying strike points you don't expect will get hit, but that the option will increase in value in time to resell it?
Delta (0.32) and Gamma (currently 0.00) vs Theta (-1.37)
FIGHT!
Watch out for Vega (0.76) if the IV drops post earnings
Option calc for 5/15 900 call TSLA Long call (bullish) calculator
Yes, exactly.
Just riding the line of the maximum beneficial outcome where I can buy in for extreme leverage yet also sell if I’m wrong.
Can’t just buy Tesla $1,200C 5/15
If we drop to 600 nobody will buy a 1200C
Have to find that magic spot of “probably not exceeding this but also conceivably exceeding this”
Oh for sure, it you're out before then the IV hit shouldn't impact you.
April 28th looks like ~$800 to break even.
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