18 Nov - updated after doing some thinking about this, im going to alter the "managed wheel" and actually manage it as if i was trading it vs waiting till opex day .. which in hindsight is not realistic if im going to claim that a managed wheel is superior. therefore, in addition to the Short Dec240 Put , will Sell 2x Dec260/270 credit call spreads at $1.45 credit per for $2.90 ($290) added credit. note the this account is still all cash with the Short Put sold. in accordance to the Tastytrade mechanics i will adjust positions near 21 DTE vs opex now.. a bit late for this month buy might as well start now since monthly opex just happenend.
18 Nov
-The Wheel - coming into month with 100 shares and a Nov 242.50 covered call. stock closed at 235ish on opex day so the covered call would expire at full value. the new cost basis is $240.35 , being generous and using todays (Saturday) prices, will sell a DEC245 covered call at $7.60 credit. Summary thus far, started with $27,500 cash in order to be able to sell a cash secured put.. now hold 100 shares and $4235cash. based on closing stock price of $235.. the account is valued at $27735 for a mark to market gain of $235 since inception.
-The Managed Wheel - coming into month with Nov250 short Put. stock closed at 235ish, so adjustment would have been to roll from Nov250 to Dec240, looks like for about .50 debit. third month in a row to roll out the short put and as a result it will show a mark to mark loss of -$700ish . The Dec240 is valued at about $14.50 so to reach break even need it to decay at least that $700ish. best case stock is above 240 at opex and short put expires at full value. Summary thus far started with $27,500 cash in order to be able to sell a cash secured put. had a gain of $485 before latest Put sale 3 months ago. include the mark to market loss from rolling puts and i come up with a mark to market $300 loss while holding the Dec short put. for further actions i would sell credit call spreads higher than the short put (Jade Lizard), such as the Dec 260/270 for $1.45 credit if i actually had this position. note that this Managed Wheel is still all cash.
so this month The Wheel moves into the lead.. not huge but better than nothing.. but also since i started this in July, neither method has resulted in satisfactory gains IMO for 5months, but also not significant losses. given the wide swings in the stock price that in itself is notable
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21 Oct
Big selloff by TSLA after earnings closing on opex day at 212.
The Wheel - last month the trade was selling the Oct250 put, thus you were "put the stock" again. forced to buy the shares at 250. minus the $7.15 in premium from the Put sale for the net cost of $242.85. for simplicity will now sell a covered call using saturdays prices. looks like the $2.50 strikes are coming on the boards on monday so no actual quote for the $242.50 calls, will be generous and split the difference between 240/245.. so selling the NOV 242.50 covered call at $2.75 credit against the new shares.
The Managed Wheel - the stock dropped so much that adjusting the Oct250 short put for credit was not possible. so using todays weekend pricing. Rolling the Oct250 short put to the Nov250 short put for flat . if stock recovers above 250 at opex of course this Nov put will expire at full profit and that original $715 credit from the Oct put sale then gets booked as a profit. that would be best case. if i wanted to really manage this position if the stock popped a little i would look to sell some credit call spreads above 250 strike for added premium. but will keep it simple on here.note this "account" is still 100% cash plus the short put.
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15 Sep
for SEP
The Wheel - last month TSLA dropped so much that in order to get at least $1.00 in credit ($100) for a monthly covered call i dropped the strike price down below the true breakeven. you could say i screwed it up, maybe, but would an actual investor sell a covered call 30days out for 30 cents. not likely. regardless, TSLA made a huge comeback these last 30 days closing at 274.. thus the no action Wheel strategy would have the covered call assigned and be forced to sell the shares at 260. net with the paltry $1.00 covered call the credit is $26100. under Aug comments you see the cost basis was $26215. thus $26215 - todays credit of $26100 gives the wheel a loss or i guess cost basis of negative $115. for simplicity will use todays closing prices and sell a new Put for Oct to start this circus again
new short Put sale is the OCT 250 put at $7.15 credit (35DTE and 25 delta)
The Adjusted Wheel - coming into this opex the position was holding the SEP265 short put. remarkedly TSLA stock rallied huge this cycle to close at 274 this the short put will expire at max profit. max profit above and beyond needed from previous rolling to now have a credit. with the short put expired the position positive $485. so vs the standard wheel +600 difference. since it was a short put the account is all cash still and will enter in a new Put sale for OCT. same as above
new short Put sale is the OCT 250 put at $7.15 credit (35DTE and 25 delta)
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19Aug
For Aug:
The Wheel - the july275 put was exercised (Put the stock) at $27500 and an AUG 270 covered call was sold at $8.00 which expired at full value as TSLA stock closed at 215 or so on 18Aug. average price for shares including the credit from puts and covered calls thus far is $26215 ($262.15) - though not the published methodology im going to drop a few strikes and Sell the SEP260 call at $1.00 credit. proper wheel mechanics are to sell covered call at breakeven which is near 270 but that call is for crumbs. this is the shortcoming of the wheel IMO. when the stock keeps dropping and dropping.
Adjusted Wheel - previously rolled the July 275 put to Aug 265 for flat.. now with stock at 215 its so far out of the money a roll for credit is not possible from month to month so rolled the Aug265 put to the SEP 265 for flat.. net net the adjusted wheel is down $4500 mark to market(but still in all cash in account) .. but better than The Wheel's loss of near $5000 (stock at $215 and shares cost basis at $267)
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