tag:blogger.com,1999:blog-28982282319581848522024-03-06T14:02:39.897-06:00Mark Lexus TradingMy Charts / Trades / and SetupsUnknownnoreply@blogger.comBlogger438125tag:blogger.com,1999:blog-2898228231958184852.post-74232280011002721992023-11-18T20:40:00.001-06:002023-11-18T20:40:16.932-06:00The Tesla Wheel vs the Managed Wheel<p> </p><p><span style="font-family: arial;"><u style="font-weight: bold;">18 Nov - updated</u> 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 , <u>will Sell 2x Dec260/270 credit call spreads at $1.45 credit per</u> 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. </span></p><p><span style="font-family: arial;"><b><u>18 Nov</u></b></span></p><p><span style="font-family: arial;">-<u><b>The Wheel</b></u> - 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 <u>mark to market gain of $235 since inception</u>.</span></p><p><span style="font-family: arial;">-<u><b>The Managed Wheel</b></u> - 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 </span><span style="font-family: arial;">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 <u>mark to market $300 loss </u>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.</span></p><p><span style="font-family: arial;"><u>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</u></span></p><p><span style="font-family: arial;">-----------------------------------------------------------------------------------------------------------------------------</span></p><p><b><u>21 Oct</u></b></p><p><span style="font-family: arial;">Big selloff by TSLA after earnings closing on opex day at 212.</span></p><p><span style="font-family: arial;"><b><u>The Wheel </u></b>- 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.. <b><u>so selling the NOV 242.50 covered call at $2.75 credit against the new shares.</u></b></span></p><p><b><u><br /></u></b></p><p><span style="font-family: arial;"><u style="font-weight: bold;">The Managed Wheel </u>- the stock dropped so much that adjusting the Oct250 short put for credit was not possible. so using todays weekend pricing. <u style="font-weight: bold;">Rolling the Oct250 short put to the Nov250 short put for flat </u>. 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.</span></p><p><br /></p><p><b><u>----------------------------------------------------------------------------------------------------------------------</u></b></p><p><b><u>15 Sep </u></b></p><p>for SEP </p><p><u><b>The Wheel</b></u> - 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 <u>negative $115</u>. for simplicity will use todays closing prices and sell a new Put for Oct to start this circus again</p><p><u>new short Put sale is the OCT 250 put at $7.15 credit (35DTE and 25 delta)</u></p><p><u style="font-weight: bold;">The Adjusted Wheel </u>- 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 <u><b>positive $485. so vs the standard wheel +600 difference</b></u>. 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</p><p><u>new short Put sale is the OCT 250 put at $7.15 credit (35DTE and 25 delta)</u></p><p><u><br /></u></p><p><u>____________________________________________________________________________</u></p><p><b><u>19Aug</u></b></p><p>For Aug:</p><p><u><b>The Wheel</b></u> - 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 <b><u>Sell the SEP260 call at $1.00 credit</u></b>. 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.</p><p><u><b>Adjusted Wheel</b></u> - 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 <b><u>rolled the Aug265 put to the SEP 265 for flat.</u></b>. 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 $267)</p><p><br /></p><p>-----------------------------------------------------------------------------------------------------------</p><div class="css-1dbjc4n r-zl2h9q" style="-webkit-box-align: stretch; -webkit-box-direction: normal; -webkit-box-orient: vertical; align-items: stretch; background-color: rgba(255, 255, 255, 0.03); border: 0px solid black; 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break-word; padding: 0px; text-align: inherit; text-decoration-line: none; white-space: inherit;">$TSLA</a></span><span class="css-901oao css-16my406 r-poiln3 r-bcqeeo r-qvutc0" style="border: 0px solid black; box-sizing: border-box; display: inline; font: inherit; margin: 0px; min-width: 0px; overflow-wrap: break-word; padding: 0px; white-space: inherit;"> entry #1 into the paper trade comparison of </span><span class="css-901oao css-16my406 r-poiln3 r-b88u0q r-bcqeeo r-qvutc0" style="border: 0px solid black; box-sizing: border-box; display: inline; font-family: inherit; font-feature-settings: inherit; font-kerning: inherit; font-optical-sizing: inherit; font-size: inherit; font-stretch: inherit; font-style: inherit; font-variant: inherit; font-variation-settings: inherit; font-weight: 700; line-height: inherit; margin: 0px; min-width: 0px; overflow-wrap: break-word; padding: 0px; white-space: inherit;">The Wheel</span><span class="css-901oao css-16my406 r-poiln3 r-bcqeeo r-qvutc0" style="border: 0px solid black; box-sizing: border-box; display: inline; font: inherit; margin: 0px; min-width: 0px; overflow-wrap: break-word; padding: 0px; white-space: inherit;"> vs a Managed Wheel
Sell the JULY 275 put at $4.85 credit .stock at 290, delta 27 , 5 DTE
</span><span class="css-901oao css-16my406 r-poiln3 r-b88u0q r-bcqeeo r-qvutc0" style="border: 0px solid black; box-sizing: border-box; display: inline; font-family: inherit; font-feature-settings: inherit; font-kerning: inherit; font-optical-sizing: inherit; font-size: inherit; font-stretch: inherit; font-style: inherit; font-variant: inherit; font-variation-settings: inherit; font-weight: 700; line-height: inherit; margin: 0px; min-width: 0px; overflow-wrap: break-word; padding: 0px; white-space: inherit;">The Wheel</span><span class="css-901oao css-16my406 r-poiln3 r-bcqeeo r-qvutc0" style="border: 0px solid black; box-sizing: border-box; display: inline; font: inherit; margin: 0px; min-width: 0px; overflow-wrap: break-word; padding: 0px; white-space: inherit;"> - above 275 at opex and Put expires max profit, below 275 gets Put the Stock
</span><span class="css-901oao css-16my406 r-poiln3 r-bcqeeo r-qvutc0" style="border: 0px solid black; box-sizing: border-box; display: inline; font-family: inherit; font-feature-settings: inherit; font-kerning: inherit; font-optical-sizing: inherit; font-size: inherit; font-stretch: inherit; font-style: inherit; font-variant: inherit; font-variation-settings: inherit; line-height: inherit; margin: 0px; min-width: 0px; overflow-wrap: break-word; padding: 0px; white-space: inherit;"><b><u>Managed Wheel </u></b></span><span class="css-901oao css-16my406 r-poiln3 r-bcqeeo r-qvutc0" style="border: 0px solid black; box-sizing: border-box; display: inline; font: inherit; margin: 0px; min-width: 0px; overflow-wrap: break-word; padding: 0px; white-space: inherit;">- adjust Put based on price</span></div><div class="css-901oao r-1nao33i r-37j5jr r-a023e6 r-16dba41 r-rjixqe r-bcqeeo r-bnwqim r-qvutc0" data-testid="tweetText" dir="auto" id="id__p0oghqbencl" lang="en" style="border: 0px solid black; box-sizing: border-box; display: inline; font-family: TwitterChirp, -apple-system, BlinkMacSystemFont, "Segoe UI", Roboto, Helvetica, Arial, sans-serif; font-feature-settings: normal; font-kerning: auto; font-optical-sizing: auto; font-stretch: normal; font-variant-alternates: normal; font-variant-east-asian: normal; font-variant-numeric: normal; font-variation-settings: normal; line-height: 20px; margin: 0px; min-width: 0px; overflow-wrap: break-word; padding: 0px; position: relative; white-space-collapse: preserve;"><span class="css-901oao css-16my406 r-poiln3 r-bcqeeo r-qvutc0" style="border: 0px solid black; box-sizing: border-box; display: inline; font: inherit; margin: 0px; min-width: 0px; overflow-wrap: break-word; padding: 0px; white-space: inherit;"><br /></span></div><div class="css-901oao r-1nao33i r-37j5jr r-a023e6 r-16dba41 r-rjixqe r-bcqeeo r-bnwqim r-qvutc0" data-testid="tweetText" dir="auto" id="id__p0oghqbencl" lang="en" style="border: 0px solid black; box-sizing: border-box; display: inline; font-family: TwitterChirp, -apple-system, BlinkMacSystemFont, "Segoe UI", Roboto, Helvetica, Arial, sans-serif; font-feature-settings: normal; font-kerning: auto; font-optical-sizing: auto; font-stretch: normal; font-variant-alternates: normal; font-variant-east-asian: normal; font-variant-numeric: normal; font-variation-settings: normal; line-height: 20px; margin: 0px; min-width: 0px; overflow-wrap: break-word; padding: 0px; position: relative; white-space-collapse: preserve;"><span class="css-901oao css-16my406 r-poiln3 r-bcqeeo r-qvutc0" style="border: 0px solid black; box-sizing: border-box; display: inline; font: inherit; margin: 0px; min-width: 0px; overflow-wrap: break-word; padding: 0px; white-space: inherit;"><br /></span></div><div class="css-901oao r-1nao33i r-37j5jr r-a023e6 r-16dba41 r-rjixqe r-bcqeeo r-bnwqim r-qvutc0" data-testid="tweetText" dir="auto" id="id__p0oghqbencl" lang="en" style="border: 0px solid black; box-sizing: border-box; display: inline; font-family: TwitterChirp, -apple-system, BlinkMacSystemFont, "Segoe UI", Roboto, Helvetica, Arial, sans-serif; font-feature-settings: normal; font-kerning: auto; font-optical-sizing: auto; font-stretch: normal; font-variant-alternates: normal; font-variant-east-asian: normal; font-variant-numeric: normal; font-variation-settings: normal; line-height: 20px; margin: 0px; min-width: 0px; overflow-wrap: break-word; padding: 0px; position: relative; white-space-collapse: preserve;"><span class="css-901oao css-16my406 r-poiln3 r-bcqeeo r-qvutc0" style="border: 0px solid black; box-sizing: border-box; display: inline; font: inherit; margin: 0px; min-width: 0px; overflow-wrap: break-word; padding: 0px; white-space: inherit;"><br /></span></div><div class="css-901oao r-1nao33i r-37j5jr r-a023e6 r-16dba41 r-rjixqe r-bcqeeo r-bnwqim r-qvutc0" data-testid="tweetText" dir="auto" id="id__p0oghqbencl" lang="en" style="border: 0px solid black; box-sizing: border-box; display: inline; font-family: TwitterChirp, -apple-system, BlinkMacSystemFont, "Segoe UI", Roboto, Helvetica, Arial, sans-serif; font-feature-settings: normal; font-kerning: auto; font-optical-sizing: auto; font-stretch: normal; font-variant-alternates: normal; font-variant-east-asian: normal; font-variant-numeric: normal; font-variation-settings: normal; line-height: 20px; margin: 0px; min-width: 0px; overflow-wrap: break-word; padding: 0px; position: relative; white-space-collapse: preserve;"><span class="css-901oao css-16my406 r-poiln3 r-bcqeeo r-qvutc0" style="border: 0px solid black; box-sizing: border-box; display: inline; font: inherit; margin: 0px; min-width: 0px; overflow-wrap: break-word; padding: 0px; white-space: inherit;"><br /></span></div><div class="css-901oao r-1nao33i r-37j5jr r-a023e6 r-16dba41 r-rjixqe r-bcqeeo r-bnwqim r-qvutc0" data-testid="tweetText" dir="auto" id="id__p0oghqbencl" lang="en" style="border: 0px solid black; box-sizing: border-box; display: inline; font-family: TwitterChirp, -apple-system, BlinkMacSystemFont, "Segoe UI", Roboto, Helvetica, Arial, sans-serif; font-feature-settings: normal; font-kerning: auto; font-optical-sizing: auto; font-stretch: normal; font-variant-alternates: normal; font-variant-east-asian: normal; font-variant-numeric: normal; font-variation-settings: normal; line-height: 20px; margin: 0px; min-width: 0px; overflow-wrap: break-word; padding: 0px; position: relative; white-space-collapse: preserve;"><b><u>22July</u></b></div><div class="css-901oao r-1nao33i r-37j5jr r-a023e6 r-16dba41 r-rjixqe r-bcqeeo r-bnwqim r-qvutc0" data-testid="tweetText" dir="auto" id="id__p0oghqbencl" lang="en" style="border: 0px solid black; box-sizing: border-box; display: inline; font-family: TwitterChirp, -apple-system, BlinkMacSystemFont, "Segoe UI", Roboto, Helvetica, Arial, sans-serif; font-feature-settings: normal; font-kerning: auto; font-optical-sizing: auto; font-stretch: normal; font-variant-alternates: normal; font-variant-east-asian: normal; font-variant-numeric: normal; font-variation-settings: normal; line-height: 20px; margin: 0px; min-width: 0px; overflow-wrap: break-word; padding: 0px; position: relative; white-space-collapse: preserve;"><br /></div><div class="css-901oao r-1nao33i r-37j5jr r-a023e6 r-16dba41 r-rjixqe r-bcqeeo r-bnwqim r-qvutc0" data-testid="tweetText" dir="auto" id="id__p0oghqbencl" lang="en" style="border: 0px solid black; box-sizing: border-box; display: inline; font-family: TwitterChirp, -apple-system, BlinkMacSystemFont, "Segoe UI", Roboto, Helvetica, Arial, sans-serif; font-feature-settings: normal; font-kerning: auto; font-optical-sizing: auto; font-stretch: normal; font-variant-alternates: normal; font-variant-east-asian: normal; font-variant-numeric: normal; font-variation-settings: normal; line-height: 20px; margin: 0px; min-width: 0px; overflow-wrap: break-word; padding: 0px; position: relative; white-space-collapse: preserve;">above was the entry for "The Wheel".. the wheel implies a take it to expiration methodology with no adjustments despite in the last portion there may be hardly any decay. so i will emulate. outside of special events (earnings / deliveries) i will use monthly options for ease of tracking. i will let option go to expiration and use the after hours pricing to be consistent for the "managed wheel" and use the monday opening price for the next entry for the standard wheel. example.. if i was "put the stock" that would happen on a saturday, so the monday opening is when the wheel would dictate to sell a covered call.</div><div class="css-901oao r-1nao33i r-37j5jr r-a023e6 r-16dba41 r-rjixqe r-bcqeeo r-bnwqim r-qvutc0" data-testid="tweetText" dir="auto" id="id__p0oghqbencl" lang="en" style="border: 0px solid black; box-sizing: border-box; display: inline; font-family: TwitterChirp, -apple-system, BlinkMacSystemFont, "Segoe UI", Roboto, Helvetica, Arial, sans-serif; font-feature-settings: normal; font-kerning: auto; font-optical-sizing: auto; font-stretch: normal; font-variant-alternates: normal; font-variant-east-asian: normal; font-variant-numeric: normal; font-variation-settings: normal; line-height: 20px; margin: 0px; min-width: 0px; overflow-wrap: break-word; padding: 0px; position: relative; white-space-collapse: preserve;"><br /></div><div class="css-901oao r-1nao33i r-37j5jr r-a023e6 r-16dba41 r-rjixqe r-bcqeeo r-bnwqim r-qvutc0" data-testid="tweetText" dir="auto" id="id__p0oghqbencl" lang="en" style="border: 0px solid black; box-sizing: border-box; display: inline; font-family: TwitterChirp, -apple-system, BlinkMacSystemFont, "Segoe UI", Roboto, Helvetica, Arial, sans-serif; font-feature-settings: normal; font-kerning: auto; font-optical-sizing: auto; font-stretch: normal; font-variant-alternates: normal; font-variant-east-asian: normal; font-variant-numeric: normal; font-variation-settings: normal; line-height: 20px; margin: 0px; min-width: 0px; overflow-wrap: break-word; padding: 0px; position: relative; white-space-collapse: preserve;">Summary of the week:</div><div class="css-901oao r-1nao33i r-37j5jr r-a023e6 r-16dba41 r-rjixqe r-bcqeeo r-bnwqim r-qvutc0" data-testid="tweetText" dir="auto" id="id__p0oghqbencl" lang="en" style="border: 0px solid black; box-sizing: border-box; display: inline; font-family: TwitterChirp, -apple-system, BlinkMacSystemFont, "Segoe UI", Roboto, Helvetica, Arial, sans-serif; font-feature-settings: normal; font-kerning: auto; font-optical-sizing: auto; font-stretch: normal; font-variant-alternates: normal; font-variant-east-asian: normal; font-variant-numeric: normal; font-variation-settings: normal; line-height: 20px; margin: 0px; min-width: 0px; overflow-wrap: break-word; padding: 0px; position: relative; white-space-collapse: preserve;"><br /></div><div class="css-901oao r-1nao33i r-37j5jr r-a023e6 r-16dba41 r-rjixqe r-bcqeeo r-bnwqim r-qvutc0" data-testid="tweetText" dir="auto" id="id__p0oghqbencl" lang="en" style="border: 0px solid black; box-sizing: border-box; display: inline; font-family: TwitterChirp, -apple-system, BlinkMacSystemFont, "Segoe UI", Roboto, Helvetica, Arial, sans-serif; font-feature-settings: normal; font-kerning: auto; font-optical-sizing: auto; font-stretch: normal; font-variant-alternates: normal; font-variant-east-asian: normal; font-variant-numeric: normal; font-variation-settings: normal; line-height: 20px; margin: 0px; min-width: 0px; overflow-wrap: break-word; padding: 0px; position: relative; white-space-collapse: preserve;">-sold the July monthly 275 put shown above. stock closed at 260 on friday 21july.</div><div class="css-901oao r-1nao33i r-37j5jr r-a023e6 r-16dba41 r-rjixqe r-bcqeeo r-bnwqim r-qvutc0" data-testid="tweetText" dir="auto" id="id__p0oghqbencl" lang="en" style="border: 0px solid black; box-sizing: border-box; display: inline; font-family: TwitterChirp, -apple-system, BlinkMacSystemFont, "Segoe UI", Roboto, Helvetica, Arial, sans-serif; font-feature-settings: normal; font-kerning: auto; font-optical-sizing: auto; font-stretch: normal; font-variant-alternates: normal; font-variant-east-asian: normal; font-variant-numeric: normal; font-variation-settings: normal; line-height: 20px; margin: 0px; min-width: 0px; overflow-wrap: break-word; padding: 0px; position: relative; white-space-collapse: preserve;"><br /></div><div class="css-901oao r-1nao33i r-37j5jr r-a023e6 r-16dba41 r-rjixqe r-bcqeeo r-bnwqim r-qvutc0" data-testid="tweetText" dir="auto" id="id__p0oghqbencl" lang="en" style="border: 0px solid black; box-sizing: border-box; display: inline; font-family: TwitterChirp, -apple-system, BlinkMacSystemFont, "Segoe UI", Roboto, Helvetica, Arial, sans-serif; font-feature-settings: normal; font-kerning: auto; font-optical-sizing: auto; font-stretch: normal; font-variant-alternates: normal; font-variant-east-asian: normal; font-variant-numeric: normal; font-variation-settings: normal; line-height: 20px; margin: 0px; min-width: 0px; overflow-wrap: break-word; padding: 0px; position: relative; white-space-collapse: preserve;">-for the "<b><u>managed wheel"</u></b> that 275put would be at $15 near closing and my management of the position would be to roll the July 275 put to the Aug 265 put which was at $15.50.. for ease of tracking will just call it flat.. no debit no credit .. <u style="font-weight: bold;">now the position is holding the Aug 265 short put </u>, adding in the credit from the entry the account is down $1015 (the Put now needs to decay or move higher for at least $10.15 to get back to break even). beyond the scope of this simple simon exercise you could factor in how much buying power you have by continuing to hold a short put vs being Put the stock and could potentially enter into other trades with that buying power vs committing all your cash by being "put the stock"</div><div class="css-901oao r-1nao33i r-37j5jr r-a023e6 r-16dba41 r-rjixqe r-bcqeeo r-bnwqim r-qvutc0" data-testid="tweetText" dir="auto" id="id__p0oghqbencl" lang="en" style="border: 0px solid black; box-sizing: border-box; display: inline; font-family: TwitterChirp, -apple-system, BlinkMacSystemFont, "Segoe UI", Roboto, Helvetica, Arial, sans-serif; font-feature-settings: normal; font-kerning: auto; font-optical-sizing: auto; font-stretch: normal; font-variant-alternates: normal; font-variant-east-asian: normal; font-variant-numeric: normal; font-variation-settings: normal; line-height: 20px; margin: 0px; min-width: 0px; overflow-wrap: break-word; padding: 0px; position: relative; white-space-collapse: preserve;"><br /></div><div class="css-901oao r-1nao33i r-37j5jr r-a023e6 r-16dba41 r-rjixqe r-bcqeeo r-bnwqim r-qvutc0" data-testid="tweetText" dir="auto" id="id__p0oghqbencl" lang="en" style="border: 0px solid black; box-sizing: border-box; display: inline; font-family: TwitterChirp, -apple-system, BlinkMacSystemFont, "Segoe UI", Roboto, Helvetica, Arial, sans-serif; font-feature-settings: normal; font-kerning: auto; font-optical-sizing: auto; font-stretch: normal; font-variant-alternates: normal; font-variant-east-asian: normal; font-variant-numeric: normal; font-variation-settings: normal; line-height: 20px; margin: 0px; min-width: 0px; overflow-wrap: break-word; padding: 0px; position: relative; white-space-collapse: preserve;">- for the "<u><b>standard wheel" you ended up being "put the stock" , you bought the shares at 275</b></u>. your net price is 275 minus the $4.85 credit from Put entry... just call it 270 for easy math.. per the Wheel methodology you are now to sell a covered call at 270 or higher. i will review monday morning depending on where stock opens, right now the Aug270 is about $9.50 credit.. if stock gaps higher, then the covered call price will improve.. will update on monday </div><div class="css-901oao r-1nao33i r-37j5jr r-a023e6 r-16dba41 r-rjixqe r-bcqeeo r-bnwqim r-qvutc0" data-testid="tweetText" dir="auto" id="id__p0oghqbencl" lang="en" style="border: 0px solid black; box-sizing: border-box; display: inline; font-family: TwitterChirp, -apple-system, BlinkMacSystemFont, "Segoe UI", Roboto, Helvetica, Arial, sans-serif; font-feature-settings: normal; font-kerning: auto; font-optical-sizing: auto; font-stretch: normal; font-variant-alternates: normal; font-variant-east-asian: normal; font-variant-numeric: normal; font-variation-settings: normal; line-height: 20px; margin: 0px; min-width: 0px; overflow-wrap: break-word; padding: 0px; position: relative; white-space-collapse: preserve;"><b><u><br /></u></b></div><div class="css-901oao r-1nao33i r-37j5jr r-a023e6 r-16dba41 r-rjixqe r-bcqeeo r-bnwqim r-qvutc0" data-testid="tweetText" dir="auto" id="id__p0oghqbencl" lang="en" style="border: 0px solid black; box-sizing: border-box; display: inline; font-family: TwitterChirp, -apple-system, BlinkMacSystemFont, "Segoe UI", Roboto, Helvetica, Arial, sans-serif; font-feature-settings: normal; font-kerning: auto; font-optical-sizing: auto; font-stretch: normal; font-variant-alternates: normal; font-variant-east-asian: normal; font-variant-numeric: normal; font-variation-settings: normal; line-height: 20px; margin: 0px; min-width: 0px; overflow-wrap: break-word; padding: 0px; position: relative; white-space-collapse: preserve;"><b><u>24July update</u></b>- a few minutes after opening i noted the Aug270 call at $8.00 so will use that price for the paper trade</div><div class="css-901oao r-1nao33i r-37j5jr r-a023e6 r-16dba41 r-rjixqe r-bcqeeo r-bnwqim r-qvutc0" data-testid="tweetText" dir="auto" id="id__p0oghqbencl" lang="en" style="border: 0px solid black; box-sizing: border-box; display: inline; font-family: TwitterChirp, -apple-system, BlinkMacSystemFont, "Segoe UI", Roboto, Helvetica, Arial, sans-serif; font-feature-settings: normal; font-kerning: auto; font-optical-sizing: auto; font-stretch: normal; font-variant-alternates: normal; font-variant-east-asian: normal; font-variant-numeric: normal; font-variation-settings: normal; line-height: 20px; margin: 0px; min-width: 0px; overflow-wrap: break-word; padding: 0px; position: relative; white-space-collapse: preserve;"><br /></div></div>Unknownnoreply@blogger.com0tag:blogger.com,1999:blog-2898228231958184852.post-7504987778067007712023-10-10T20:35:00.111-05:002023-10-22T18:18:53.417-05:00update - Gym Bro middle east intell and trade<p> </p><p><span style="font-size: medium;"><u><b>21 oct</b></u> - had another bullshit session with the same gym bro. again retired Special Forces and is independent contractor advising on security issues. no particular order, review the conversation below from 10 Oct first:</span></p><p><span style="font-size: medium;">- asked again about the possible attacks on the homeland and thanksgiving. he referenced that the timing might be in conjunction with the expiration of the latest budget continuing resolution which expires early Dec. explaining that federal anti terror agencies and task forces will have no money to conduct operations. gave example that if government shutdown happens that FBI will not be able to use their accounts to fly anywhere or even fuel their vehicles since they are GSA accounts. i said this isnt the first shutdown weve had, isnt there some type of IOU system to keep those agencies functioning... said something about "they" are trying to transfer some funds from something to something else to fund some anti terror taskforce. he seems to be current on whats happening. even referencing something i just read on my twitter stream while sitting in the truck in the parking lot prior.</span></p><p><span style="font-size: medium;">-mentioned the brief hubbub about Biden meeting Delta Force operators while in Israel and their faces were not blurred. i said im sure this guys knew press would be there.. meaning it wasnt a meeting in a secure room, for your eyes only shit. he agreed.. the point i was making is everyone was all moist about not blurring the faces but had no issue with Delta Force actually being on the ground in Israel.. ie "no boots on the ground" ... he said that "the FBI HRT is also there (Hostage Rescue)</span></p><p><span style="font-size: medium;">-forget the country but said some of the "protesters" that were arrested confessed that they were paid to protest in support of the Palestinians .. paid by Iran .. europe i believe it was.. makes sense</span></p><p><span style="font-size: medium;">-i switched subjects to an internet podcast show i catch often .. The Shawn Ryan Show... guy taught John Wick his skills and ex SEAL.. has alot of tier 1 operators on show, recently a retired Delta operator from black hawk down days.. i found the segment very moving and felt for him as he struggled to cope even now.. personally i was at Fort Bliss at the time and missed the initial deployment into somalia by about 6weeks for a small armored task force.. i believe 24th infantry division (3d infantry division) sent some units.. asked gym bro where he was during black hawk down .. said he was "in country" .. started getting into specifics about how the administration mid op called the guys to say that the somali enemy are now our allies, so therefore all the support guys like spectre gun ships, more SF guys were grounded and the actual relief columns from 10th mountain and more Delta guys came to near shooting it out with the base security that would not let them leave. now ive read multiple books that included black hawk down.. the actual book, a book from a SEAL Sniper that was on overwatch.. i forget the name (not chris kyle) and thats the first ive heard anything like that.. but it makes perfect sense given how U.S. foreign policy works. my gym bro loves to talk so i let him ramble on about how when he was training forces in central america he would get a call to stop training these guys since now they are the enemy, they will begin training the old enemy to defeat the new enemy that just learned tactics from his team... seems typical</span></p><p><span style="font-size: medium;">-i made a wiseass comment that too bad we couldnt have brought all that gear back from Afghanistan. would come in handy for ukraine.. said he expects another Blackwater private security company to stand up and much of their weapons sourcing will come from paying the taliban for the gear and weapons.</span></p><p><span style="font-size: medium;">-tried again to get a stock suggestion from him, again noting he is not a trader but he brought one on his phone. again in the semiconductor space.. which i dont see the appeal if the regional conflict blows up.. stock is SNPS , never heard of... my 10minutes of twitter searching made it seam like they do the software for new chips.. options look illiquid and only monthly so dont see an entry for me. has had a good run though</span></p><p></p><div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjEB3FzZqeEXpchcTwhRcqE_pD8RXvDwLQ-RhAyLMgqdLVjf-hEofwGRV-tHWiNpUSau6nBEiOZRQ_I3AztLTvz40Ljc5l0Ibrh_tmJ59B-85kmMYgrXnClC-_R0A3ziCYg2qYoKH6gUpMLun9yRHXy6bA9T6K_HLwXW-tsOtPgzuoRQ1c74J1VeFzwQw0e/s500/snps.png" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" data-original-height="350" data-original-width="500" height="280" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjEB3FzZqeEXpchcTwhRcqE_pD8RXvDwLQ-RhAyLMgqdLVjf-hEofwGRV-tHWiNpUSau6nBEiOZRQ_I3AztLTvz40Ljc5l0Ibrh_tmJ59B-85kmMYgrXnClC-_R0A3ziCYg2qYoKH6gUpMLun9yRHXy6bA9T6K_HLwXW-tsOtPgzuoRQ1c74J1VeFzwQw0e/w400-h280/snps.png" width="400" /></a></div><br /><span style="font-size: medium;">if i drank id offer to get a beer with the guy and let him ramble on about some places hes been. Told me previously that while deployed to Bosnia during the ethnic fighting his guys would routinely have firefights with Russian Spectnaz teams.. hes a good dude, im just not able to put in the time to get the detailed responses since we are both about to get a workout in.. told him i expect some updates next time i see him</span><p></p><p><span style="font-size: medium;">------------------------------------------------------------------------------------------------------</span></p><p><span style="font-size: medium;"><b><u>10oct </u></b>- couldnt think of a catchier title.. i had a conversation with a gym bro today. he is retired Special Forces and has done some "contract work" as well.. he currently is a consultant for Homeland Defense / FBI / and Intelligence agencies / businesses.. he basically talks to them about risks and compliances. ive always kept the conversations casual and general, not wanting to be super nosy but had a lengthier conversation today.. some topics in no particular order:</span></p><p><span style="font-size: medium;">-main one first.. he said he expects some significant attacks on the U.S. homeland by Thanksgiving, essentially from Iran sponsored sleeper cells that have utilized the open border in the south. targets would be a mass shooting of some type to create mass chaos and media coverage. i specifically asked if the targets would be larger like power grids, etc.. said no .. asked him is sources.. "do you have a FBI buddy feeding you this or he just running his mouth"... implied that he still has "sources" from where he served during his "contract work" .. i left it at that</span></p><p><span style="font-size: medium;">-said his phone "has been ringing off the hook" this weekend with the israel / Palestinian war going on. said months ago they blew him off and said they had intel about an attack happening months ago. i saw that on twitter myself already so i dont know if he was just rephrasing the same reports i read or he/his group had proprietary intel</span></p><p><span style="font-size: medium;">- said those same guys calling from Homeland / Assistant secretary to the something something in the FBI want him to come talk. said you guys still owe me payments for the last four sessions.. something about payments super slow with the government shutdown nearly happening.</span></p><p><span style="font-size: medium;">-for israel he said you will see the propaganda machine from israel kick in now reference the hostages.. to shape the information that they are martyrs to the fighting. bringing on families / parents to talk about how their loved one would fight , blah blah... intent is to dull the media outrage (ie the western support) if hostages are killed in the bombings. </span></p><p><span style="font-size: medium;">-back to the coming attacks.. i said "by thanksgiving" sure is specific and not too far away.. he referenced some incidents recently that i never heard of..granted im not a news junkie.. i asked where would the targets be.. said look to the cities where the defund the police movements were popular... also said "just look whats happening in New york and Chicago"</span></p><p><span style="font-size: medium;">-as far as Iran he said the key is if Syria will go along with anything, maybe ties to Hezbollah ? something something about Israel might attack Iran , which i dont agree with. i said i always heard that a limitation Israel had was a lack of / or a sufficient number of tanker refueling planes for the long flight and back unless some allies helped.. plus the obvious overflight of Syria/Jordan/Saudi Arabia/Iraq depending on their routes and i had thought that given previous Israeli air strikes on other arab countries (the strike on Iraq nuk site years ago) that iran as alot of their nuclear program underground. even the bunker buster type bombs might not be sufficient... didnt respond to that directly but said Iranian air defense is poor and they would rely on Syria for alot of it. seems like if thats the case then dont overfly syria, regardless.. i cant speak to Iranian air defense but id have to assume tactically to be on par with U.S. for planning purposes.. S-300/S-400 type stuff</span></p><p><span style="font-size: medium;">- he acknowledged that Iran assisted with Hamas planning of the attacks. which shouldnt come as a big shock, flip it around.. the U.S. collaborates with its allies on regional issues.. same thing.. for discussion i asked what would the "regions" reaction be if Israel attacked Iran.. .i threw out some possibilities.. like Egypt/Jordan/Iraq/Lebanon/saudi arabia and others joining into an anti-israel coalition.. attacking tankers in the persian gulf again.. shia/sunni not withstanding... not a real response but said the timing of the Hamas attacks was to prevent the soon to be approved treaty/agreement between Israel / Saudi Arabia to more normalize relations and as part of that was a stipulation on Saudi Arabia that they could not assist any other arab neighbor against israel.. also the timing of the Hamas attack coincided with a somewhat paralyzed U.S. government with no speaker of the house. i didnt see the relevance.. regardless</span></p><p><span style="font-size: medium;">-my preworkout was starting to kick in and wanted to wrap up the bullshit session so i transitioned to "knowing what you know and what you think will happen.. what would you be investing in or shorting" ... i couldnt follow his logic but the name he came up with was Marvel Tech (MRVL) because they had alot of military contracts for their semiconductors. i threw out NVDA , Intel, AMD ... he said he was impressed with MRVL with the amount of military work "when he visited them" to do security compliance checks.. dont know what exactly he would be looking at. </span></p><p><span style="font-size: medium;">-also said if anything to sell airlines. .not really a no brainer given the reactions after 9/11 but he said travel will be down after the "attacks" .. could have just asked Bobby Axelrod for same answer really.</span></p><p><span style="font-size: medium;">-he specifically said he didnt think anything for over the December holidays because Biden this or that.. seems backwards to me</span></p><p><span style="font-size: medium;">Summary: this guy has stacked some bodies in several countries and has worked with Homeland and Law Enforcement agencies .. still is. so i will give him the benefit of the doubt... the timing of any attacks is the magic bullet for all counter intel types. I am going to do some work on MRVL and likely do a small position.. thinking at least a 6month out LEAP with some covered calls / spreads against along the way to lower the cost basis. as far as airlines, they have been dog shit for a while but will look for an entry for possibly Put spreads.. not betting the house. just some exposure.. might profit from general market direction anyway without a mass casualty event.</span></p>Unknownnoreply@blogger.com0tag:blogger.com,1999:blog-2898228231958184852.post-61633030888763854932023-02-27T20:43:00.000-06:002023-02-27T20:43:27.384-06:00$TSLA bearish trade idea 28 feb<p> </p><p>28 feb</p><p><span style="font-family: verdana;">investor day happening on 28feb after market.. a trade idea the market reacts poorly.. </span></p><p><span style="font-family: verdana;">stock is 207ish after hours on 27th.. the stock hit a low of about 187 on the 13th of Feb so will go with the assumption that stock works its way lower to test that level. Going to use a 1x2 Put Ratio Spread. buy 1 Put, sell 2 Puts lower.. will need buying power for that 2nd Put... </span></p><p><span style="font-family: verdana;"><b><u>MAR 200/185 1x2 Put spread for .50 debit - buy one 200, sell two 185s</u></b></span></p><p><span style="font-family: verdana;">profit range at MAR monthly opex is 200-160. Consider it like selling a 185 Put but buying a Put spread to profit on the move to 185 .. a perfect on the nuts pin at 185 at opex is $1500 profit per 1x2. the two 185's will need to decay away to see the profits so plan on holding to the last day or two. If the stock takes off, monitor this position because you may be able to close for a credit as the 185s decay quicker.. you can then reestablish this trade higher for a hedge or just move on.</span></p><p><span style="font-family: verdana;">if stock is under 185 at opex you will be "put the stock" at 185.. you will buy 100shares at 185.. but you should close this trade out regardless on opex day.</span></p><p><span style="font-family: verdana;">i will be reviewing this to put on myself before market close on 28th prior to investor day.. i like that $40 range for a hedge to downside (in addition to my weekly short calls). my intent is to enter ratio spreads for near zero or slight credit, so you can make the ratio wider.. say the 200/150 but it will cost more. close to zero is just my method. chose strikes youre comfortable with. if you use weekly options you will not be able to have an as wide spread (and be near zero cost) , which why i went to MAR monthly .. again since its March, you will need to wait till near opex to see those profits, will likely be mark to market loss till then. patience, let the hedge work for you</span></p><p><br /></p><p></p><div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhvblD4kxw-lKoUZPWKooJkY_OCCL_yNEgdTY6MZIc3hlxgYp4rAEqVI7OVTCBK37kIHJHTI6XxFxr__WUdb_SzcrfI9Zk2WhD8DHjFntsOLeHJ56vTk6zsnZxxHjFVmAoETuvCEE_bDvm2RX_r_Wi4V8u5cdFFhezJvRCrC0JBQBmjcNfxy25aw4-sWw/s500/tsla.png" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" data-original-height="350" data-original-width="500" height="448" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhvblD4kxw-lKoUZPWKooJkY_OCCL_yNEgdTY6MZIc3hlxgYp4rAEqVI7OVTCBK37kIHJHTI6XxFxr__WUdb_SzcrfI9Zk2WhD8DHjFntsOLeHJ56vTk6zsnZxxHjFVmAoETuvCEE_bDvm2RX_r_Wi4V8u5cdFFhezJvRCrC0JBQBmjcNfxy25aw4-sWw/w640-h448/tsla.png" width="640" /></a></div><br /><span style="font-family: verdana;"><br /></span><p></p>Unknownnoreply@blogger.com0tag:blogger.com,1999:blog-2898228231958184852.post-57072204778711460682023-01-18T18:13:00.006-06:002023-01-18T18:16:13.360-06:00Homebuilding Rant 18jan 2023<p><u><b><span style="font-size: medium;"> 18 jun</span></b></u></p><p><span style="font-size: medium;">ok meow, i have to make some comments about the current situation with new home construction thru the eyes of an ex-construction manager with 20 year's experience (retired at new years 2021). these views are from what ive observed as a construction guy and may or may not jive with a sales guy or a non homebuilding guy that makes charts and trendlines for a living that keeps telling me for the last 20 years that there has been a shortage of new homes.</span></p><p><span style="font-size: medium;">the two big issues right now as i see it are interest rates and the price of a home .. a new build.... this is a typical size home i built from our competition.</span></p><p></p><div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/a/AVvXsEgXT9gfc5M6hQ45rHSutvokVz72lz0bHlJgDRn1Eqv0jFcaJgq3hWEJ2uHNaUp0yktYXzuUHHkM1BeeQB61ulKIH9Au8RdkgesK8UoLJB3h_wW7PT5uPBmPrj2QjHCwhNDSIW5v3fAK7ncx7vEfNScSuTySnW43SSd1Ay9orwmw3q8Y3UZQDOmWGx3eZw" style="margin-left: 1em; margin-right: 1em;"><img alt="" data-original-height="589" data-original-width="1050" height="360" src="https://blogger.googleusercontent.com/img/a/AVvXsEgXT9gfc5M6hQ45rHSutvokVz72lz0bHlJgDRn1Eqv0jFcaJgq3hWEJ2uHNaUp0yktYXzuUHHkM1BeeQB61ulKIH9Au8RdkgesK8UoLJB3h_wW7PT5uPBmPrj2QjHCwhNDSIW5v3fAK7ncx7vEfNScSuTySnW43SSd1Ay9orwmw3q8Y3UZQDOmWGx3eZw=w640-h360" width="640" /></a></div><span style="font-size: medium;"><br />$600k now, was low $400s last year ... $600k gets you alot of house in texas. First off, interest rates, you see the twitter comments or CNBC hits about 7%+ interest rates .. ok , maybe.. .but if youve bought a house before or flip side if you've been in the business, you know rates are flexible and may be negotiable. likely a better deal is available if you use the in house lender from the homebuilder. each builder has either a partnership with a lender or its actually part of the homebuilder umbrella of services. Lennar for instance has a developer portion, have their own lender, their own title company. KB home is similar. so there is an inherent efficiency for the customer by staying in house.. some customers, maybe based on a realtors recommendation, will say no im using my own lender, Bank of America or whatever.. ok your choice, but in hindsight you are at a disadvantage using an outside lender. with in house lender, EVERYONE is working together to get you closed, lender talks to my sales lady, who talks to me, etc. everyone knows each other. heres the point.. i just pulled this off a builder website that i will cut and paste: </span><p></p><h1 class="headline1 Typography_headline1__1QppW" style="-webkit-tap-highlight-color: transparent; box-sizing: border-box; color: #2d2d2d; font-family: Reckless; font-size: 3rem; font-weight: 300; letter-spacing: -0.64px; line-height: 1.06; margin: 0px;">Up to $12k in closing costs & 4.750% (4.963% APR) interest rate* for quick move in homes.</h1><div><br /></div><div><span style="font-size: medium;">thats today 18 june.. but.. but.. cnbc said 7%... unless you walk in with a briefcase of cash, it will best case still take about 2-3 weeks to get you to closing. approvals, appraisals, paperwork, etc.. all that behind the scenes stuff i dont see but hear about in conversation from my sales ladies. </span></div><div><span style="font-size: medium;"> so this builder that advertised this buy down incentive has some homes that are not sold, either finished, or about to be finished likely by end of July.. getting to be too late for June.. and the carrot for the customer is they will get $12K off of closing costs (thats about 3%) and 4.75% interest IF THEY USE THE IN HOUSE LENDER.. want Bank of America.. you get full price and whatever interest rate BOA has.. But builders can also say NO OUTSIDE LENDERS... at all.. that happened last year. by far the most pain in the ass (unprepared) customers are via outside lenders. Via in house there is a somewhat pre approval process.</span></div><div><span style="font-size: medium;"> so no outside lenders somewhat culls out the less qualified customers that might not get the home anyway during that time when it could have been sold to a legit customer. Customer is at the mercy of whats available of course during the time frame, but its an example of how the headlines online and CNBC are not necessarily accurate. but if you walk in a sales office and want to buy that cul-de-sac lot that has not started yet, i will bet you a Coke Zero you will be paying full price.. plus a juicy lot premium and will have to wait a year till i can get it finished and then pay the prevailing interest rate a year from now.. no quick move in discount for you.</span></div><div><span style="font-size: medium;"> secondly with rising interest rates, there starts to be a fear of missing out feeling start to build up. if you really think about it, what drove that huge increase in home prices the last 18months.. material costs go up and down. most of the increase, IMO, was just straight up more buyers than sellers, crazy numbers, maybe covid driven once the silly lockdowns ceased.. customers working from home realize they DO need a bigger house if they are trying to work in the study, but their kids also are home schooling being a pain in the ass in another part of the house, and your wife is home all day too, etc </span></div><div><span style="font-size: medium;"> i did an informal survey of my last 12 months worth of customers when i had my prestart meeting with them simply asking what brings them to wanting a new build right now... had zero investors, 10% relocating from another area/ another state and 90% just wanting a bigger house and or their current house is nearly 20years old now and they have had 4 kids since, ie bigger house needed. </span></div><div><span style="font-size: medium;"> the argument of Blackrock buying up all these homes at least where i was is bullshit.. maybe thats existing homes. dont get me wrong, there are those types of deals out there. whether its Blackrock or Berkshire doing the buying. my builder had a deal going that one just-started subdivision was going right to a Blackrock type company who would immediately rent out.. advantage to the builder.. easier to build since you dont have 168 customers to ass kiss, everything sold up front, no marketing needed, no customer walks, no realtors to deal with, no sketchy loan applications. i would have volunteered for the work but was too far a drive. Back in the day, pre financial crisis, an investor would be sometimes solicited.. need 2-3 more closings to make the fiscal year.. the director of sales would call Mr. Jones, an investor who has purchased 28 already this year, and see if he can take 3 more at 25% discount. but thats the old timey days.</span></div><div><span style="font-size: medium;"> the fear of missing out caused many to start over bidding, over paying and caused more sellers to hit the markets when they saw the demand. IMO the crazy demand pulled in sales just so many could get top dollar on their current house.. but then THEY would need a NEW house.. causing increased demand for new houses. now back to interest rates, the media has flooded the airwaves about rates increasing, the Fed raising rates several more times. now that gets into a situation where those on-the-fence customers either from price/availability/ just looking might get forced into making that purchase. The wise sales team will convey that to them.. waiting another 6 months might mean mortgage rates are at 7%. So rising rates starts to convey a sense of urgency with some customers. of course thats offset by those people who straight up will not be able to afford the current monthly payments. point being that customers are still there, those promotions of 4.75% will still be there. the builders will get their closings while getting decent margins still. </span></div><div><span style="font-size: medium;"> if you are savvy and are aware of when the end of quarter / end of fiscal year is for the builder you might be able to negotiate an even better price.. for example customer A cancels for an August closing, customer B has same plan down the street but his home is 5 months later in the pipeline with a tentative January closing.. sales team talks to customer B to see if he will transfer over. probably a slight discount is offered, can lock in interest rate now vs 6 months at potentially higher.. Customer B knowing that August is end of quarter might be able to negotiate that price down some.. offer 25k lower, play the "my wife really likes the other lot better", "wasnt ready to close next month" "kids are still in other school" type excuses that a $25K discount would solve. worth a try. better than a coin flip the chain of command will accept that deal in order to "make their quarterly number" and not show an unsold finished home... ie, the builders will get their closings</span></div><div><span style="font-size: medium;"> Let me paraphrase a conversation between our division president and our CEO from years back as it was told to me.. the CEO has a reputation for flying off the handle and being a no bullshit abrasive guy. at end of fiscal year all the DP's will meet with CEO.. our division fell 2 closings short of the build plan goal.. DP gave some answers about some cancellations.. blah blah.. CEO essentially says (yells).. "you couldnt get 2 more closings.. 2 fucking closings... you couldnt have discounted 2 homes $100,000 each to get 2 more closings" ... again those were the old timey days when closings were the only thing that mattered, now the metrics are shifting to margins.</span></div><div><span style="font-size: medium;"><br /></span></div><div><span style="font-size: medium;">18jan2023 </span></div><div><span style="font-size: medium;"> </span></div><div><span style="font-size: medium;"> going to finish up this rant today since i just saw a cnbc clip with the talking heads tap dancing about housing.. key points that "bottom may be in" , interest rates about to tick under 6% for a 30 year, and limited supply. cnbc and most of twitter has been on the wrong side of homebuilders for 12 months, continuing to cheerlead that housing is crashing and prices are coming down and honestly being pretty happy about their forecasts despite the millions of jobs homebuilding provides. all the while some homebuilder stocks are near 52week highs.. the lack of acknowledgement of being wrong is comical as stats get thrown out there to make the easy headlines.. cancellation rates, housing shortage, prices plunging. so many "bears" i see on twitter post ad nauseum stats and charts and rates but likely have never worked in the business.. worked.. not being an analyst.. worked as in getting up at 4am for a slab pour, filling up truck gas tank every 2 days, and routinely eating lunch at Circle K or sitting with a customer until midnight to get their contract squared away to be able to turn it in to corporate the next day.</span></div><div><span style="font-size: medium;"> for nearly a year ive been consistent in saying the homebuilder stocks are detached from "housing" headlines.. much of which is focused on the existing home market.. one forecast i had (keeping in mind i still have buddies that are construction mangers and sales ladies) is that demand is still strong and will pick up as 2023 passes... after 20years of doing the grind its clear that management doesnt always have the correct forecast for the next 6-9months. they try their best of course. my forecast is that as interest rates normalize and tick lower (note why is the 30 year rate down to near 6% from over 7% but the Fed has raised rates).. point being the rates float around up and down.. currently down off the peak.. that the pent up demand (up top i mentioned my customer survey i did that most needed a bigger house.. MOST of those were already living with someone else.. parents temporarily usually awaiting their house to be complete. so the vast majority of the customers were not contingent on another house selling).. so pent up demand is starting to hit, timed with some decrease in prices, timed with some available buy downs by builders to keep homes moving will cause a surge in sales and cause the builders to ramp up starts over this year. </span></div><div><span style="font-size: medium;"> if been thru that before, was maybe 2015 or so, in early part of year management redid their build plan at direction of nationwide managers and they realized there would not be enough on the ground to make the "new" numbers. so word comes down that starts would increase.. and no bullshit, they tripled.. we called it The Jungle Rush... i argued with my supervisors that my pace is one start a week/ 3-4 a month. seeing how each CM has their own crews (framers, cornice, masons, painters, cleaners, carpenters) and they only work so fast. Giving me 3 starts a week for 8 weeks straight doesnt mean 3 frames start seeing how i have one frame crew. occasionally you can get a 2nd crew or your guy as another crew he subcontracts, but that doesnt work if the whole city is doing that. so starts 2 and 3 get stacked up, then come the following weeks 3 starts. so after a month i have a whole street with poured foundations and only 3 frames complete/in progress and of course management shitting bricks that nothings happening. Oh and it piles more work on the construction managers, causing build time to increase</span></div><div><span style="font-size: medium;"> Point of all this is i think this will happen this year. surge in starts because of heavier demand. will cause lower or no price incentives. will cause higher prices, will cause higher margins (even during the grim 2021-2022 days the builder margins in high 20% range. thats huge)</span></div><div><span style="font-size: medium;"> now having said all that essentially im in the camp that homebuilder STOCKS outperform in 2023</span></div><div> </div>Unknownnoreply@blogger.com0tag:blogger.com,1999:blog-2898228231958184852.post-39283612866348066982023-01-16T17:45:00.000-06:002023-01-16T17:45:13.072-06:00$TSLA trade idea 16jan2023<p> 16 Jan2023</p><p><span style="font-size: medium;">with earnings coming up on 25 Jan. a bullish trade idea for TSLA. Premise that you have at least 100 shares or an existing long call / LEAP and you are bullish.</span></p><p><span style="font-size: medium;">with stock at 122ish today. Enter the FEB 130 / 145 call ratio spread (buy one 130 / sell two 145). can do for about .50debit per. the profit range at Feb opex for just this spread is 130-160 with optimum being $1500 for a magical 145 pin at opex closing. Your long shares or long calls are also gaining during this move higher.</span></p><p><span style="font-size: medium;">No added buying power needed since your broker will treat this as a long spread and a covered call. note that earnings are next week and this trade will include those. you will see mark to market losses likely on an up move until opex gets closer as you need the TWO 145s to decay away so plan on holding till expiration day or day prior to get your max gains.</span></p><p><span style="font-size: medium;">if stock sell off you AND you do not want to wait till opex it possible the 145s will decay enough that you can exit this trade for a profit. you can then move the strikes lower and redo the trade or just move on.</span></p><p><span style="font-size: medium;">I dont try to get cute and leg into this ratio spread.. as in buy the 130 and then wait for an up move to be able to sell the 145s against for better pricing to make the whole trade a net credit.. the price is the price to me. youre just risking .50 to make a max $1500</span></p><p><span style="font-size: medium;">you can do this for every 100 share block/long option you have</span></p><p><span style="font-size: medium;"><br /></span></p><p><span style="font-size: large;"><b><u>FEB 130 / 145 call ratio spread for .50 debit </u></b></span></p>Unknownnoreply@blogger.com0tag:blogger.com,1999:blog-2898228231958184852.post-59649020325102010712022-08-06T20:50:00.000-05:002022-08-06T20:50:41.477-05:00United Health trade suggestion<p> </p><p><b><u>6 Aug </u></b></p><p>on the 5Aug Options Action show, a viewer question was responded to about United Health.. here is the video clip</p><p><a href="https://twitter.com/OptionsAction/status/1555678953410551810?s=20">United Health video clip</a><br /></p><p>Both Carter and Tony agree that viewer should add to the position but dont offer an actual options trade to go with the show. they mention a high from april, the stock is about $15 off that high. here is my suggestion with the assumption you have at least 100 shares and expect it to move higher:</p><p style="text-align: center;"><b><u>Buy the OCT 550 / 570 1x2 Ratio Spread</u></b>. for near $300 credit.. buy one 550 and sell two 570s </p><p><br /></p><div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEj6fPu5T1SUkWkDoT5FfwKpQ0FaavDMalQ49dtflPuJx8wwgtZ-Z_rvJczilwjzIawK4vNhz432XQOGoDJL6jRaD0Qw2wc1xS_KOeLPNHDq5MefJCnDnfEMnk1lmN3MSexDYte84KacdLCMfBTp2QV4Jv-WqJiRn4NY8ezXTTdTxF6_l3fQjGeXaAyZsg/s500/unh.png" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" data-original-height="350" data-original-width="500" height="448" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEj6fPu5T1SUkWkDoT5FfwKpQ0FaavDMalQ49dtflPuJx8wwgtZ-Z_rvJczilwjzIawK4vNhz432XQOGoDJL6jRaD0Qw2wc1xS_KOeLPNHDq5MefJCnDnfEMnk1lmN3MSexDYte84KacdLCMfBTp2QV4Jv-WqJiRn4NY8ezXTTdTxF6_l3fQjGeXaAyZsg/w640-h448/unh.png" width="640" /></a></div><br /><p>The profit range for just the ratio spread is 550-590 at opex in Oct . but also the stock is increasing at same time so you are getting 2x from 550-570 .. the ratio technically doesnt start losing money until above 590 but your stock is gaining same time.. Good way to juice your returns if you are just a buy and hold investor like this caller. Plus you are entering for a credit so if stock is under 550 at opex, no harm no foul. Can do same trade if you have a Leap instead of 100 shares.. say the Jan2024 500 call for about $9900 vs $53500 for 100 shares.</p>Unknownnoreply@blogger.com0tag:blogger.com,1999:blog-2898228231958184852.post-42680447552570236872022-07-07T20:23:00.003-05:002022-07-07T20:23:59.067-05:00APA alternative trade<p> 7july</p><p>on todays after market Options Action hit, Mike noted unusual options activity with APA . i dont follow the stock but looked at it after the clip. He noted a large order of the Aug 40/50 call ratio for .84cents , specifically trader bought 3000 Aug 40 calls and sold 6000 Aug 50 calls. Here is the video clip</p><p><a href="https://twitter.com/OptionsAction/status/1545164036052029447?s=20">Options Action APA Trade</a><br /></p><p>i do ratio spreads on top of an existing long stock (100shares at least) so it is also called a catch up trade, i dont have (nor want) the ability to sell naked calls. Mike said he didnt think it was based on stock but never know. This trader wants the stock to return to 50 at Aug opex with max profit being at 50 but the profit range being between 40-50 (minus the .84 debit to enter trade) , "losses" happen above 50</p><p>an alternative trade with defined risk is a sell Put spread to buy call spread trade.. there probably is a cool name for it , just dont know it.. here it is using same Aug opex</p><p><b><u>Sell the Aug 30/25 put spread and use that premium to help pay for the Aug 35/42.50 call spread</u></b>... mid point right now is about $1.20 debit</p><p>The street seems to be leaning that the recent energy selloff was overdone so possibly a near term bottom on friday with oil. The trade on Options Action is very aggressive for the strikes selected, needing $7 more upside just to get in the money at opex and a return to near its 52week high to get the max profit. With my alternative im using strikes that are easier to hit IMO, taking the easier first part of that move if it happens. the profit zone is the box on the chart below. the credit put spread im selling uses the 30 level which is the assumed near term low and has some support dating back to pre Russia invasion. max profit on my trade is at $42.50 or higher at opex. plan on holding to opex to see all that since you are working 2 trades at same time best case.. the decaying credit put spread is still holding value till opex as the call spread is gaining.</p><p>I will see how stock opens tomorrow and might follow, maybe have to tweek that strikes a bit</p><div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEg_v7tuNCfWtZI2OzjJnMNeW4NoAJUiylkhik_XZiCgHNqDZpuvIwjdUyMT1igdcf72Sd__0nBDyYMQIDVMFJHWB1VmvPYuo0n2mbLZtPg87fu6aylYJ0kjcvfKywx4j99C7b9jgIaALwSX10QMomY1Ue1kucxkDaarpK5G5tN6zAypNdmZkxskCrJysw/s500/apa.png" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" data-original-height="350" data-original-width="500" height="448" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEg_v7tuNCfWtZI2OzjJnMNeW4NoAJUiylkhik_XZiCgHNqDZpuvIwjdUyMT1igdcf72Sd__0nBDyYMQIDVMFJHWB1VmvPYuo0n2mbLZtPg87fu6aylYJ0kjcvfKywx4j99C7b9jgIaALwSX10QMomY1Ue1kucxkDaarpK5G5tN6zAypNdmZkxskCrJysw/w640-h448/apa.png" width="640" /></a></div><br /><div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjkiYKYmJGLeg-UEuVACJqn9125GVXsxRnhZE3eqT4OamCLAI6ikbGBwAc67mZrfB3RiOFoQF1I2aJ4edtIHXCX668LX9uNewXoJYz6hWS8gP8qKIemqOR7QXvCdDR6ETcVi39hXWSHxVWBkKYTPj2rYR2oYLK7HV493I1zMCxOGQlVi1TM4W5gmEJz_g/s500/apa.png" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" data-original-height="350" data-original-width="500" height="448" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjkiYKYmJGLeg-UEuVACJqn9125GVXsxRnhZE3eqT4OamCLAI6ikbGBwAc67mZrfB3RiOFoQF1I2aJ4edtIHXCX668LX9uNewXoJYz6hWS8gP8qKIemqOR7QXvCdDR6ETcVi39hXWSHxVWBkKYTPj2rYR2oYLK7HV493I1zMCxOGQlVi1TM4W5gmEJz_g/w640-h448/apa.png" width="640" /></a></div><br /><p><br /></p>Unknownnoreply@blogger.com0tag:blogger.com,1999:blog-2898228231958184852.post-25746685565790091072022-06-14T19:29:00.000-05:002022-06-14T19:29:01.513-05:00Tesla short Put exit<p><u><b> 14 Jun</b></u></p><p><br /></p><p>in the interest of full disclosure unlike most gurus on twitter that only post their winners. made a tactical decision today about the short puts ive been defending on TESLA at strikes near 1000 from earlier in the year. I am at risk of marking the bottom with my actions. as i review my twitter stream both on tesla specific commentary and general market, there are many that i follow that i respect still seeing further downside for general market in raw SPY points and/or a VIX blowoff. many continue to say that they still have not seen that panic/desperation point the will mark the bottom / and or a VIX above 40. will that happen i cant say..</p><p>as far as tesla, multiple technical analysis guys are targeting sub 600 and low 500s. i broke out the calculator so see if can withstand a drop to 500 with my short puts and came to the conclusion that i likely will get maintenance calls and be put in the situation of closing the puts, depositing more funds, or selling off other positions to meet any maintenance calls.</p><p>Since entering the short puts months ago i have sold numerous call credit spreads against (ie at higher strikes than the short puts) and have rolled week to week or to next month for credits, and have bought debit put spreads on the way down as hedges. so the actual "loss" is about half but the paper loss is a nice kick in the balls. i still have credit spreads working now and long Leaps and short some near dated calls but the defense of the short puts is consuming more and more of the buying power available. also that buying power set aside for the short puts is not really making me more than chump change now since the strikes are way higher, so rolling even from month to month is only a few hundred bucks. </p><p>So point being, i closed out some short puts today leaving only a couple that are cash secured. now if stock returns to near 1000 without that next leg down i will be an idiot but right now in the near term its protect the account. the account value is unchanged after closing the puts, just have less cash now</p><p>on the subject of cash secured, ive been doing some math in my head and coming to the conclusion that since the short puts are 900+ strikes that it might be better to be "put the stock" come opex time.. looking at it like this. currently expires July monthly, last i looked, rolling out to August monthly same strike only nets me about $400.. thats for an entire month.. vs just being Put the stock (yes for that $900+ stock price), but with owning the shares im able to sell covered calls nearer dated, say every 2 weeks out for premium far in excess of that $400 monthly(such as the 800calls). will have to revisit this right before opex and bounce some numbers around.</p>Unknownnoreply@blogger.com0tag:blogger.com,1999:blog-2898228231958184852.post-73824532540079584122022-06-04T13:37:00.001-05:002022-06-04T13:37:23.391-05:00TESLA trade idea<p> </p><p><b><u>4 Jun</u></b></p><p>Stock just pulled back 10 percent, most blaming Elon latest comment about laying off 10% of the workforce later clarified to 10% of salaried workers and worrisome feeling about economy. regardless of reasons the stock is at 700 now.</p><p>-heres the scenario im assuming: that you have at least 100 shares or long a Leap at 700strike or lower and you expect stock to rebound from here. not a big surprise but the trade will be a call ratio spread.</p><p>-also of note that the big down move on friday caused a 30 point gap from about 743-775ish give or take. </p><p>a call ratio spread is buying one call and selling two higher calls. that second call is not naked, it is paired with either the 100 shares or the leap you already have. so no added buying power is needed by your broker. i want to target the 775 area with the presumption that the gap will get filled. no guarantee that the gap gets filled during this opex, could happen next trading day, or week after. Gaps almost always fill at some point. its just a matter of time. but you have to make a call at some point.</p><p><b><u>Buy the JUN 730 call, sell two 775 calls</u></b> - currently after hours quote is for a small credit. profit range at opex is 730-820 on just THIS spread. but your stock/leap is gaining as well so you are pretty much gaining 2x on the up move. yes, if stock is above 820 at opex you start to technically lose money on this spread but your stock has gained 120 points, your stock is gaining as the spread is losing if it continues higher.. there is a breakeven way above 1000 but its not really practical to consider. easier to just to say that your profits are capped at 820 at opex.</p><p>you can widen the strikes if you want and pay a debit but i select my strikes in order to have tiny credit. the credit is not important, i just dont want to pay for the trade in case im wrong or timing is off. Historically i undershoot the strikes, ie the stock goes higher than i expect</p><p>the two 775 short calls have to decay away so initially if stock rebounds the trade will be a mark to market loss, the closer to opex the more the trade will move in your favor. just plan on holding till thursday / friday of opex week</p><p>Best case the stock is near 775 on friday opex , youve gained maybe $4000 on this spread. i referenced that gap earlier.. thats whats driving the strike selection for me on this trade. you may have other levels that you see, maybe other technical indicators, or you want to use a different time frame. the further out in time you go the wider you can make the strikes and still get a credit.. but of course you have to wait longer. just an idea . here is the gap from friday, 5min chart</p><div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhZ8NB7biOFp_pK07w0FfVA7jmg1Yvttydhq3Y-SY8Q1mWkeD8z8JpPCDaiVOJvwdwOQhzA-oVR-v5YWvguj08EQf5uAj82q449LUkmII0jZXMJXTEW646H3jRN1OSI9u_mlBL9X_qRldkj-2adY5h-5z2Pe7jf-EXtEzrMHtkVPTQrUJX3_lKWI-RD1Q/s500/tsla.png" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" data-original-height="350" data-original-width="500" height="448" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhZ8NB7biOFp_pK07w0FfVA7jmg1Yvttydhq3Y-SY8Q1mWkeD8z8JpPCDaiVOJvwdwOQhzA-oVR-v5YWvguj08EQf5uAj82q449LUkmII0jZXMJXTEW646H3jRN1OSI9u_mlBL9X_qRldkj-2adY5h-5z2Pe7jf-EXtEzrMHtkVPTQrUJX3_lKWI-RD1Q/w640-h448/tsla.png" width="640" /></a></div><br /><p><br /></p>Unknownnoreply@blogger.com0tag:blogger.com,1999:blog-2898228231958184852.post-53313749558177581832022-04-24T17:37:00.002-05:002022-04-24T17:37:36.363-05:00Credit Spread screwups $TLSA<p> </p><p><b><u>Apr 24</u></b></p><p>Just wanted to share some thoughts about some recent screwups on credit spreads ive had on $TSLA</p><p><br /></p><p>a quick recap, i generally follow the mechanics of the crew over at Tastytrade, specifically one of their guidelines is to take profits early. thru their studies somewhere between 25% - 50% of max profit. essentially you have made the easy meat of the trade now in order to get the remainder of the potential profit you have disproportionate amount of risk, ie the stock could reverse and turn your trade into a loss.</p><p>i know all that but here is the thinking i had that screwed it up... example using TSLA at 1000 stock price and arbitrary credit spread numbers.. say i have a 990 short put and to counter that i would sell the 1110-1120 credit call spreads for $1.60 credit , 10 lot ($1600 credit) ... if the stock moves down my short put loses value and credit spreads gain value... as everyone know TSLA can move rapidly in either direction and often times in same direction for many days.. so stock goes down one day, and the next , and the next and my credit spreads are worth .80 ... 50% of max profit, ie i could close trade for $800 debit after collecting $1600 credit to open.</p><p>Now here is where i screwed it up as im watching the stock go lower and lower, net net my short put is going further against me and i start to think instead of closing the credit spreads to instead hold them a day or two longer because its a hedge against further downside moves and to milk another couple hundred dollars out of the credit spreads. </p><p>What ended up happening was stock reversed upward again, often rapidly. for this example, all the way past the credit spread strikes.. above 1120, causing the credit spreads to now be at a loss.. moving up so much that the spreads could not be rolled out in time for a credit.. and ended up having to take max loss on the credit spreads.</p><p>If i had followed the mechanics i should have just taken the 50% win on the credit spreads and waited it out for the next up move to either close the short put for profit or resell new credit call spreads at new strikes and/or different opex. instead i snatched defeat from the jaws of victory.</p><p>in hindsight after reflecting on my process, that "additional/remaining" hedge i thought i had by holding the credit spreads really didnt amount to many dollars and indeed had huge risk. This process works in both directions but ive been burned a couple times with holding the call credit spreads too long.</p><p>Solution is to remember these huge losses and just take the 25-50% win on the credit spreads and move on to the next trade.. no emotion.. just looking at numbers. I also have to keep reminding myself its VERY easy to roll short puts out in time and down before you have to take the loss.. barring margin calls of course.. may have to go out in time a few weeks if necessary. credit spreads are much harder to roll for flat/credit once the outer strike is breached.</p><p>Bottom line.. take those profits and move on.</p>Unknownnoreply@blogger.com0tag:blogger.com,1999:blog-2898228231958184852.post-73401797889052444032022-01-22T18:58:00.003-06:002022-01-22T18:58:51.968-06:00$TSLA trade idea 22 Jan 2022<p> </p><p>22 Jan 2022</p><p>earnings are this week for Tesla TSLA .... here is your thesis. you have either stock (in 100 share increments) or Long Leaps at lower strike than fridays close at 943 AND your expectation that the stock after earnings will get higher between 1000-1100 next friday.</p><p>one of my go to trades is the Call Ratio, also called a Catch-Up Trade.</p><p><b>Buy the Jan28 1000 call at $26ish</b></p><p><b>Sell 2 of the Jan28 1055 calls at $13ish each</b></p><p>with limit order id set a .10 credit to try to get a fill.</p><p>you do not need more buying power. break this down into pieces if youre new to ratio spreads. </p><p>you are buying the 1000/1055 spread and then selling an additional 1055 short call. its not by itself. if you have the stock then your broker pairs it to the stock and its a covered call.. if you have a long Leap your broker pairs that 1055 call to the leap and its a spread / diagonal spread.. so no added buying power is needed. if your Long Leap strike is higher than 943 you will need more buying power or your broker will not allow the trade. </p><p>so again its the Jan28 1000/1055 call ratio , profit range starts at 1000, is max at 1055 ($5500) then decreases to 1100... anywhere at opex 1000-1100 is profit. because you have 2 of the 1055s short , they will have to decay away to start showing profits, so initially the trade will likely show a mark to market loss...hold tight.. just expect to have to hold until friday at opex to see the best gains.</p><p>if stock closes below 1000 at opex then this trade just expires, no harm no foul.. just that couple cents from entry.. you could go 1000/1050 for example and it would be about a $2 credit ($200). the point isnt to get a big credit at entry, its for the multi thousand-dollar payoff if you get the direction correct. entering for credit is just gravy.. therefore, you can also go 1000/1100 strikes and PAY to enter this ratio.. your call, but i want zero downside risk.. free trade. </p><p>the only "loss" is if you undershoot the strikes and stock is above 1110 at opex.. but remember your long stock or Leaps have been gaining from 943 to above 1110 . so the ratio might technically be a loss but the "position" has gained.... there is a true breakeven where the loss from the ratio finally overtakes the gain from the stock but its 100's higher.. not really practical to worry about</p><p>the point here is to get that leverage to the upside.. to catch up from the losses from previous days.. the ratio profits, your underlying stock or leaps profit.</p><p>the part that i struggle with is comparing what could be from a ratio trade to what i might get with just outright short call sales. right now i could sell Jan28 1100 calls for $7+ credit. compare that to what i potentially could make on a ratio. the ratio would need to get to at least 1007 at opex to equal the short call sale... if its under 1000 i get nothing and i didnt get that $7 credit so i feel like i lost $7.. im usually a one-in-the-hand-vs-two-in-the-bush type of guy.</p><p>but if you magically get that 1055 pin youve made $5500.. historically ive waited too long to take profits on ratios trying to milk those last juicy profits if it was flirting with the midpoint for max gain as the short calls decay away and it end up surging / selling off into the close and i had to settle for a few hundred bucks to close the trade.. max profit at opex is $5500, if you can exit at $2500-$3500 you should probably cash out, pat yourself on the back, and move on to the next week for a new trade.. or at least cash out a portion if you have multiple lots.. in my case id cash out then sell a higher strike short call for the following week for more credit since thats my routine.</p><p>earnings are wednesday after close. it would be better if you wait till the day of to enter the ratio spread using the current stock price at the time since it might be up or down from today and the 1000/1055 strikes might not be appropriate on wednesday. you get the idea</p><div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/a/AVvXsEhB_GlEBfHqY5YsCQ9y4zd-YMeiIDTpmqXsLDMkUPRFocSuI0RFJD0KVUtNyZt6JH3eD64s9CGPMkWyVo_Rha2uw2SUHn3pGpjaHTcX8eIoAo7D9XNkMrqFeI1_bVK2jCzhw-jRKFJk5FFW77CFoKFWSQoCVXUHPhUbGHQHxlRyCQH2lP5uHnMkvT2olg=s500" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" data-original-height="350" data-original-width="500" height="448" src="https://blogger.googleusercontent.com/img/a/AVvXsEhB_GlEBfHqY5YsCQ9y4zd-YMeiIDTpmqXsLDMkUPRFocSuI0RFJD0KVUtNyZt6JH3eD64s9CGPMkWyVo_Rha2uw2SUHn3pGpjaHTcX8eIoAo7D9XNkMrqFeI1_bVK2jCzhw-jRKFJk5FFW77CFoKFWSQoCVXUHPhUbGHQHxlRyCQH2lP5uHnMkvT2olg=w640-h448" width="640" /></a></div><br /><p><br /></p>Unknownnoreply@blogger.com0tag:blogger.com,1999:blog-2898228231958184852.post-80084498890232078912022-01-13T23:03:00.000-06:002022-01-13T23:03:29.233-06:00when to exit short calls<p> </p><p>13 jan</p><p>today was both satisfying but not profitable. satisfying that i followed my mechanics, set my alerts, took the action i wanted to after alert hit and was able to exit some positions that matched my "rules" BUT...</p><p>the frustrating thing that maybe one day i will have it dialed in is intra day closing of trades.. example.. i always say that ideal times to sell upside short calls is on an up day. you get higher premium, can choose a higher strike , etc ... so on monday after waiting and 4 down days in a row there was a decent up move and got a good fill on weekly 1100 call at $10.05 i believe off memory. the next 2 days as stock goes higher i see huge volume at same strike, i see a few on twitter mention the huge volume and they to add insult to injury it gets mentioned by Pete Najarian on cnbc who you know has front run the fuck out of it before going on air. i want to say it was in the mid 20s yesterday.. not really a problem since i could have rolled it for 50 points higher i noted in one of my tweets</p><p>over the last few weeks ive been changing my mechanics to NOT milk short calls till fridays, i figured i ended up rolling to next week for less premium or not up in strikes as much because i waited that one more day. so today ive got an order in working.. pennies away from a fill to roll the 1100 to next week 1120 for $13.50 i had it at one point.. that credit was staying pretty constant as the stock was selling off, dropping into the 12s and then its starting to look like i might not need that preemptive roll since the stock was in the 1060s i believe at the time so instead i just closed the 1100. bought back for 6.45 for about 40% win. but now towards end of day it was even under $1... so im feeling i lost $600 by not rolling at the correct time.. hindsight being 20/20</p><p>same example.. the other short call i was working this week was a 1065 .. bought a May 1025 call tuesday.. nearly at high of day and then pulled back , my fallback if my timing is off is to sell a weekly call against to lower the cost basis. im not selling the long call for a loss just for the sake of closing the position for the day. that short call was the 1065 . premium was $23..decent.. at the money. then same thing, stock moves higher.. net net the "trade" is at a loss with the short call losing more (till decay kicks in) than the long call is gaining.. so again im looking at rolling and end up today rolling the 1065 to next week 1080 for $11.05 credit.. again decent premium for a week AND 15points higher in strikes.. looks like that best price today was near $16 so again im thinking i lost about $500 in what coulda shoulda been. natural to think that maybe i didnt need to roll to next week after all and the 1065 could go out worthless tomorrow or bought back super cheap</p><p>that next week 1080 i rolled to fell in value 30+% so per my rule i bought it back also</p><p>the overall thought was take action today because tesla will rebound today or tomorrow and i can reenter both short call slots higher.. best case for $20+each at 1130 level or higher</p><p>im starting to think on those wednesday / thursdays when i have been rolling that i tend to do that too early in the day.. off the top of my head i cant think of a time when ive said to myself "im glad i did that this morning" its always been "i would have done alot better if i would have waited till the last hour"... like today.. would have been a near $3000 difference in fills. i remain confident i dont need to wait till friday like i used to but will try to wait longer in the day on those roll days... of course if tesla reversed today into closing im a fucking genius worthy of guru status</p><p>lastly.. all this hubbub is about 2 slots for short calls.. i still have 13 short calls at 1000/1140 strikes for jan28 after earnings that have about $40000 in time value remaining to decay.. best case stock is near 1140 before earnings so i can roll those 1140 as high as possible but still take in about $10per in credit in order to give as much upside as i can assuming an earnings beat in line with the delivery numbers just reported.</p><p><br /></p><div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/a/AVvXsEgpZUvZYeEs7C9CguimeWwAEvGgfoQiPXBUnLOvhwR5Efug1pNTa8zbM8nG5s8atrJNh-7yzrI5sKNyGCIfZNhts1qdsP9kcJlL35IFA9lLRMFARHpBdmnU3ikxFOGy3dk4EqAHXLRJiU7kc44Bi4ydjSmY3h-7KUQjosUwErjoguhiYDMzCnyizxVFMQ=s500" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" data-original-height="350" data-original-width="500" height="448" src="https://blogger.googleusercontent.com/img/a/AVvXsEgpZUvZYeEs7C9CguimeWwAEvGgfoQiPXBUnLOvhwR5Efug1pNTa8zbM8nG5s8atrJNh-7yzrI5sKNyGCIfZNhts1qdsP9kcJlL35IFA9lLRMFARHpBdmnU3ikxFOGy3dk4EqAHXLRJiU7kc44Bi4ydjSmY3h-7KUQjosUwErjoguhiYDMzCnyizxVFMQ=w640-h448" width="640" /></a></div><br /><p><br /></p>Unknownnoreply@blogger.com0tag:blogger.com,1999:blog-2898228231958184852.post-43876194636021620922022-01-01T22:36:00.001-06:002022-01-01T22:37:34.696-06:00Comments for the New Year<p> </p><p>1 jan 2022</p><p>ok, couple thoughts, nothing earthshattering. just a review of the last year off the top of my head. </p><p>As i head into this new year "retired" at 54 from working, i look back and see i had my best year ever with the stock market. 99% being premium selling. im optimistic that now that i can devote the entire market day to whats going on i will be able to catch more opportunities i was unable to capitalize on because of actually working.. those intra day moves.</p><p>every year i tell myself to do more of what works and less of what doesnt. in 2009 after 10years on the job i was layed off during the financial crisis and didnt work for 3 years. just got all my Obama unemployment that i could and played stock market and then was able to return to homebuilding once the market turned. </p><p>during those 3 years i was primarily selling credit spreads and admittedly not doing as well as i expected and in my personal life i had significant debt built up, taking advances on credit cards with the idea of paying them off with the profits going forward. got to the point where i was just making due and paying the bills. After returning to work i focused on work for the next few years with the occasional trade. also given the technology of the time it was still possible but not convenient to trade stocks during the day.. i bought an iphone 5 back in the day to be able to monitor prices.</p><p> the difference between now and then after getting back into the market 3-4 years ago is that i stumbled onto the youtube videos from the TastyTrade team. starting watching 1-2 a day talking about probabilities, standard deviations, rates of decay difference between an in the money vs out of the money options, optimum entry and exit points, differences in trading between high and low IV... after absorbing all that info i looked back at those 3 years of trading after the layoff and wondered how i managed to not lose more. was clueless</p><p>my trading turned around just like that. i dont follow their mechanics 100% but it forms the basis for alot of my decision making. so i want to say i am a much better trader now vs then. i do entries and exits now i would not have considered back then. Thus i am confident going forward that 2022 will be profitable, just have the house note and 13K on one truck left as my legit debt.. Plus about $125k in 401K that will get rolled into my etrade IRA in a few weeks.</p><p>along the lines of do what has worked and stop doing what doesnt work. looking back, Put selling was the standout straightforward winner. as the year passed by i became higher and higher all in on TSLA and going off memory i was 30 for 31 profitable put sales on TSLA.. with the one loss just being a technicality of $100ish. my entries where pretty much under 20 delta and also looking back i could have gone a bit more aggressive on that delta.</p><p>some of my internet trader friends have iron condors dialed in but im under 50% wins on those.. even when i leg into it via selling credit spread, and days later selling the other side.. one side always seems to get tested causing me to defend the trade for weeks or months. its such an aggravation to roll over and over for pennies often to delay a loss trying to thread the needle at opex time . so despite the headline ease of the trade i will resolve to not do them.. tactically you can argue that they do take up some buying power that could be applied to a higher probability profitable trade . so theres that too</p><p>the short put selling has been the percentage winner but the shear monetary winner via how is it impacting the portfolio balance has been the diagonal spreads. buying 6months out to Jan2024 long calls as a replacement for the stock and selling short term (weekly/2weeks out) calls against for income. straight up just like a covered call. my personal goal has varied where i want to collect between $5000-$10000 a week in credit depending on how many long calls i have. a $10 credit per is a good starting point. i have noticed this year i am spoiled and have to check myself.. i catch myself mentally saying "that trade would only make $4000" this week. i have to put that in context of how much would i make for a month on the job and or that x52 weeks.. is $4000 bad for a week? big problems to have. So the diagonal spreads will continue</p><p>i huge part of premium selling unless you get whipsaw price movement is actually just waiting.. waiting on that premium decay. so its nearly a daily challenge to not have to do something. sell something, buy something.</p><p>although i have 10-15 stocks on my watchlist like i said im 99% in TSLA. i want to say that the advantage is i can put on multiple trades with high probabilities.. such as if i have short calls at 1000. i could add credit put spreads below that.. only one of these trades will be a potential max loss.</p><p>Surprisingly i see that when i entered long positions on big sell offs on those other stocks on my watchlist or at least stocks im someone familiar with, my win percentage is poor. ive reduced my losses considerably by entering via diagonals but all in all entering long via buying is a no go.. for me a Put sale or credit put spreads month or 2 out has been more successful. which is not a surprise since the whole Tastytrade thesis is that option selling is the way to go , not option buying.. not always but it lines up to what ive been doing.</p><p>Mechanically looking back my short call strike selections could have been a tad higher (higher delta). although when the stock has taken off , my short strike selection really didn't matter.. the stock (TSLA) moved 100's in a few weeks. but i will keep that in the back of my head. there is that balance between are you bringing in enough premium for just your general goals / bill paying and to offset the decay in your long calls</p><p>my "gut check" rule has served me well. "if the trade doesn't feel right in first 5 seconds i should pass" and my gut overrules any metrics or TA.</p><p>so just some random thought, not a to do list of resolutions but a refocus on what has served me well. the high probability entries, taking profits in a mechanical method and rolling based on daily changes in IV and theta i think has maximized the credit. </p><p>Alec Baldwin in Glen Garry Glen Ross has that Alway Be Closing scene.. ive stolen that and made it Always Bring in Credit - ABC</p><p>if i continue to maintain focus it should be a very boring year but profitable</p><p></p><div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/a/AVvXsEhXhrnNhKRHK80_gKqSdOaDHVlrmh_mYiS_DXMdJuTkMnzBBL0iHBk0H4sG3EwwiXPHKdyMQxN-jzPxFwalZay0eqs03P-8LJVyraCPYT-ve1nXknamI7Ny27XLwMM9Pi_X-1_3IwW76zJBpofbhq4dYzxhygAJSgnDGMfiuhDSTFZkVjjDqQf7Xnf8zA=s584" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" data-original-height="292" data-original-width="584" height="200" src="https://blogger.googleusercontent.com/img/a/AVvXsEhXhrnNhKRHK80_gKqSdOaDHVlrmh_mYiS_DXMdJuTkMnzBBL0iHBk0H4sG3EwwiXPHKdyMQxN-jzPxFwalZay0eqs03P-8LJVyraCPYT-ve1nXknamI7Ny27XLwMM9Pi_X-1_3IwW76zJBpofbhq4dYzxhygAJSgnDGMfiuhDSTFZkVjjDqQf7Xnf8zA=w400-h200" width="400" /></a></div><br /><div class="separator" style="clear: both; text-align: center;"><br /></div><br /><br /><p></p>Unknownnoreply@blogger.com0tag:blogger.com,1999:blog-2898228231958184852.post-40948337298744272842021-10-30T10:11:00.000-05:002021-10-30T10:11:02.732-05:00Tesla Short calls<p> 30 oct</p><p>as most of my online friends know i own deep in the money leaps and sell short calls near dated for premium.. the intent is that the short call premium is the money maker. price appreciation via the leaps is gravy.</p><p>as weve all seen , TSLA has taken off the last 2 weeks and would have blown thru the top range of any short calls i would have had or rolled to. regardless, what to do now. last week i had the Oct29 905 short calls , a 6 lot, with stock around 1050 ... way above my short calls.</p><p>so at the current premiums i could only roll up and out a week to the 910s and it not be a debit.. whether its 905 or 910 doesnt matter much as far away the stock is so i decided to roll to Nov05 905s to get max credit. on down days the premium improves in my favor, on up days i would get less premium to roll. i checked every day last week and the premium was between 4 and $8.50 credit.. at one point i believe wednesday i entered an order at $8.35 credit and was at midpoint right before closing with no fill.</p><p>i expected a pullback in morning so i increased the premium to $8.50 GTC order since i would not be behind computer in morning. i didnt mess with the order and yesterday im with a customer and i get the confirmation emails that 5 of the 6 lots filled at $8.50. i logged in 15 min later and the midpoint was about $4.50. cant explain what happened but i will take it. score one for the little man. i closed the 6th lot at $4.85 in the afternoon.</p><p>now the point of all this is that even with the stock nearly 200 points out of the money near 1100 i was able to roll my 6lot position for between $4.85 - $8.50 for $3000+ for a week. the ideal time to roll is on big down days, if stock drops 50 points and the IV increases i might be able to roll from 905 to 925 and still get small credit but until that happens the question is (and the answer may not be the same for all based on your short call strike and what else you have going on) is the $3000 for a week worth it to stay as is?.. as in roll 905 to 905 to 905 maybe the occasional roll up 5points</p><p>if the stock keeps going higher and higher that $3000 credit to roll will do down and down so at some point you might decide youre commiting xyz dollars and only getting $750 to roll so you reset the positions. </p><p>but im also still expecting a gap fill at some time, sooner than later would be helpful so for the moment a 905ish short call is ideal for a gap fill to the 900-910 area.</p><p>so to answer my own question. that $3000 credit and some short put sales/credit put spreads added in there is enough per week</p><div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhE2j5z5W2_uOZrIebhu5YE6_jMDvpPdh6_OF4baHVAzkF3ph6HVHm2UJXAwKDF-d9Rd5WFrmhhoSDtr15Oy3E82kKFaqlsv0V71ZP_0LeRHkprAeHYTxSmSlvlEFO3pVXzL58Mw8n7-Gmu/s500/tsla.png" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" data-original-height="350" data-original-width="500" height="343" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhE2j5z5W2_uOZrIebhu5YE6_jMDvpPdh6_OF4baHVAzkF3ph6HVHm2UJXAwKDF-d9Rd5WFrmhhoSDtr15Oy3E82kKFaqlsv0V71ZP_0LeRHkprAeHYTxSmSlvlEFO3pVXzL58Mw8n7-Gmu/w558-h343/tsla.png" width="558" /></a></div><br /><p><br /></p>Unknownnoreply@blogger.com0tag:blogger.com,1999:blog-2898228231958184852.post-71715009658087336922021-10-23T11:26:00.001-05:002021-10-23T11:26:45.278-05:00Tesla Reset 21 oct<p> </p><p><u><b>21 oct</b></u></p><p>ok meow.. the least desirable action to happen if you use the buy deep in the money Leap and sell near dated upside calls for premium strategy.. also called the poor mans covered call... is for the stock to just take off thru your short call. and i dont mean just 10-20 bucks in the case of tesla.. like 75+ . </p><p>Note how last week the stock was under 800 with delivery numbers fresh. i made the decision to roll from 765 to yesterdays 765 for huge premium with the expectation that would be a sell the news action from earnings. got that wrong obviously or maybe early but have to deal with expirations here and now so a 100 point sell off next week doesnt help.</p><p>the guideline i use is first see if i can roll the short calls up and out. the 765s to go to next weeks 770s would be a debit and roll flat to 765s again was midpoint about $2,75 credit when i looked.. remember its an 11 lot so about $3000 credit for the roll. if stock pulls back that week to week roll from 765 to 765 credit would improve, if you get a big selloff its an ideal time to roll up and out as premiums spike you may be able to roll for 10-25 points.. </p><p>also keep in mind i have Jan2022 Leaps although profitable via stock appreciation are also decaying at a tiny increasing rate going forward cutting into that $3000 credit. so the decision is do i stick it out rolling week to week for assuming $3000 per (which is not chump change compared to my actual take home from my full time job) or can i make adjustments to "get back in the game" and get back to selling juicier premium.</p><p>I call this "doing a reset" . i seem to have to do it 2-3 times a year and im thinking does not come naturally to newbies who will likely just take a huge loss and move on. so here it is</p><p>Short version is to "buy to close" the 765 weekly short calls but instead of using up my cash cushion i instead "sell to close" enough Leaps to pay for the "loss" on the calls.. ie take the loss on the calls, take profits on the Leaps.. which Leaps is up to you but mine are Jan2022 -Jan2024 opex.. i mentioned that the Jan2022 leaps earlier. one way or another in the coming months i would have had to take some kind of closing action on those anyway so i picked those Leaps to take profits in .. your broker might be different but etrade "cancels" 3 leg trades where i try to close all 11 calls, sell 5 Leaps but with 2 different opexes .. so have to break them down into 3 separate trades.. </p><p>close 4short calls, close 2 Leaps Jan2022 at 650strike, close 4 calls and close 2 Leaps Mar2022 650strike, and close 3 short calls and close Jan2022 700strike ... it doesnt have to be precise, you are losing some with the wider bid/asks , some end up slight credit, some slight loss. im just trying to avoid a huge cash outlay so a couple thousand "net loss" and all 3 transactions is same same for me.</p><p>so i closed 11 short calls but only sold 5 leaps therefore i have 6 leaps uncovered (no upside calls again) so with stock in 880s sold:</p><p>6 Oct29 905 short calls at $10.25 per -- </p><p>just the quick math you can see i took in $6000+ after all that reset vs $3000ish on a roll </p><p>Now im back in the game with short call near the money. account balance unchanged, cash balance essentially unchanged and able to sell puts etc</p><p>All this is unrelated to the buy write i had going as same time but intent was to let that expire/get called away for the "guaranteed" profit.</p><p>as i have conversations online with people about buy leaps/sell calls strategy the number 1 response or question or concern is what happens if stock takes off.. first off the short call level is up to you, i sell a bit closer to at the money than most people it feels like and there are those that sell a 2-3 delta for $100 bucks. there is a middle ground somewhere thats your comfort level.. whether thats a delta level or a dollar level.. start with 20 or so delta.. get a feel for how the stock moves, sometimes go higher delta or lower.. that move thru the short call type action does not happen often or out of the blue. tends to be from an event. .earnings, an announcement, deliveries etc . point being is if stock takes off there is no need to panic or lose sleep, you just made less than before. reset like i did if you have multiple leaps or close out the entire position and start over. get back to a position where you are bringing in premium</p><p><br /></p><div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEji7Qv4A_UdxnlHivw41kkRAHx_8Kh7yXyDe5IDiX6I6akzfnPd4flhN8AR0ELHLtZQ2KkZC1jD7b0neoxkiQPkuwAPawoZtxYhf9q9aZoEeMX6HzIdx7eTw6jk_MADSMVMEe9nzSzHRINY/s500/tsla.png" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" data-original-height="350" data-original-width="500" height="448" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEji7Qv4A_UdxnlHivw41kkRAHx_8Kh7yXyDe5IDiX6I6akzfnPd4flhN8AR0ELHLtZQ2KkZC1jD7b0neoxkiQPkuwAPawoZtxYhf9q9aZoEeMX6HzIdx7eTw6jk_MADSMVMEe9nzSzHRINY/w640-h448/tsla.png" width="640" /></a></div><br /><p><br /></p>Unknownnoreply@blogger.com0tag:blogger.com,1999:blog-2898228231958184852.post-47599688287507993302021-09-15T20:39:00.000-05:002021-09-15T20:39:46.918-05:00Change to Tesla Position<p> </p><p><u><b>15 sep</b></u></p><p>friends, this is a bit longer than multiple tweets so... </p><p>Started the day with long 15 leaps ranging from Jan 2022 out to Jun2023, from 650 strike up to 750 strike. to go with those are 13lot short calls 780 Oct 08 strike, one 765 Oct08 and one weekly 755. </p><p>Although im comfortable with my long thesis my account balance after adding leap 15 is low enough i cant do much else right now outside of some spreads... Put selling is my top go to trade and i prefer to do the put selling on something im already long. ie Tesla. , point being not enough cash in account to do that.</p><p>A smaller part of todays thought process is that if market does turn lower (what that really means for me is Tesla since im super overweight on that stock) , that i dont have anything to put to work. big down days are ideal to add a Leap, do a risk reversal (sell put, buy call) , or just outright Put sales.. i could put a couple weeks together of added short call premium but that doesnt help me now.</p><p>An additional item to consider is taxes.. of those 15 Leaps, three of them were purchased in april about when stock was 702 according to my notes. they are the Jan2022 710 strikes.. you might see where im going... me along with many expected tesla to continue an upward move all year and thus come opex time (jan2022) those Leaps are in the money and profitable.. such as stock is at 900-1000. what you are fighting all year is time decay against you just like the time decay works for you on the short calls. so you need that leap to gain in value just enough to offset the time decay.. long story short , at some point im going to have to do something with my Jan2022 Leaps. converting into stock has never been something ive wanted so take that off the table. if i had that much cash to begin with i would just be doing stock buy writes. As of today those Jan 710 leaps still have $6000 of time decay left (against me). Although since purchase my short call premium has been in excess of the Leap time decay im working against my own leap the closer to Jan opex approaches</p><p>so it was either best case take profits in Jan or roll out another year or two, maybe have to throw some more cash into it for a roll. Bottom line the Leap is a mark to market loss right now. i can use those losses against my gains for taxes. ive had another pretty good year with tesla so need something to help offset some gains.</p><p>so combine all that together... the lack of flexibility to do any other significant trades (short put selling / adding a Leap on a huge down move, etc) and being able to get a tax benefit. Heres what i did:</p><p>-the weekly 755 i sold yesterday i bought back today for about $50 loss (that frees up one uncovered Leap)</p><p>-the Oct08 765 short call, bought that back at about 30% gain from entry (frees up another leap)</p><p>So that leaves the 13lot 780 short calls intact Oct08 opex</p><p>-then i sold 2 of the jan2022 710 calls at about $10100 ish each</p><p>I did buy writes recently, both were profitable at eventual exit.. so for remainder of week bought 100 shares common and sold 740 short call against at $15ish.. net net if stock is above 740 friday the stock is called away essentially at 755ish for near $400 for sitting on hands. </p><p>having that cash on hand if needed on a down move i can buy Leaps for 2023 or do short put selling. doing buy writes is obviously simpler especially if youre not worried about having shares called away and is easier to manage but the money maker is having multiple short calls paying me. </p><p>seems like we are overdue for a pullback, either market or tesla specific so i need to be more flexible but still have exposure. next month or two will be doing something similar to the remainder of my Jan2022 leaps.</p>Unknownnoreply@blogger.com0tag:blogger.com,1999:blog-2898228231958184852.post-38481304531271385592021-07-09T20:37:00.001-05:002021-07-09T20:37:47.383-05:00$TSLA roll down and UP he said??<p> </p><p><u><b>9july </b></u>-- ok friends, too much to tweet so put it on here. been months but here we go, put on your helmet.</p><p>some of my twitter friends have noted that i had previously Jul30 710 short calls that i also rolled to the 700s for credit. today i rolled those 700 short calls to the Jul23 672.50s... move up to an earlier opex is a first for me. heres the thought process...</p><p>i have 11 Jan2022/2023 Leaps on tesla at various strikes, most are out of the money, having purchased when stock was higher. Selling short dated calls against those for premium is easy if you stay at the same strike price as those Leaps. No additional buying power needed, if you sell a short call at a lower strike then some buying power is needed.</p><p>few months ago the stock was under 600 so at that level in order to sell short dated calls against my leaps i needed alot of buying power or i needed to stay as close to the strikes of the Leaps...say 700 for discussion.. so selling 600s short calls could be done but could not do 1 for 1 against the leaps... could not sell all 11. only 5-6. when stock recovered closer to 700 i could sell 1-2 more. then it dawned on me.. .instead of selling weekly short calls with the remaining slots , to go out further in time and higher strike. so go 5-6 weeks out and sell 700s or so. thus being back to near same strike as long leap and not needing more buying power.. 5-6 weeks were needed to get decent premium. weekly premium for 700 strikes was $1-2 per... not really worth the effort.</p><p>in hindsight my rush to accumulate the leaps caused me to use up the buying power that could have been used to sell Puts or for short calls if stock drops like ive described.. should have not bought that 11th Leap.. regardless here we are and stock has recovered to 650+ and im looking at my short call positioning. with 30min to go before opex today i had</p><p> 6 Jul 650 short calls and 5 Jul 30 700 short calls (21 DTE)</p><p>got me thinking that i wish i had all eleven short calls for next week to get the maximum decay, then roll to Jul23, then roll to Jun30... i was not getting any participation of those 5 short calls for next week or Jul23 week.. i was losing out on decay and a roll for credit for 2 weeks. yes the 700s would decay as well. i was only at the Jul30 opex because 2 months ago i didnt have buying power, not really by choice.. </p><p>i could have rolled the jul30 700s to next weeks 650s to match my 6lot but that would have again taken up more buying power that right now id rather have for flexibility. so i looked at 2 weeks out the Jul23 week (includes earnings) and adjusted the strikes on etrade until i came up with a slight credit... that was the Jul23 672.50 strike (so move up a week and down 27.50 points) for .25 credit. meaning that if stock is under 672 at opex i capture all the premium ( $19ish i believe it was)... but i capture it a week earlier than if i would not have rolled down.. this allows me now to sell another new 5lot batch for the Jul30s after the Jul23s come off the board.. bottom line i gained another weeks worth of opportunity to put on a 5lot of short calls.. would be kick ass if at that time the stock was in a position where i would want to resell those same 700 strike calls. </p><p>make sense? </p><p><br /></p><div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhsRtO88QHZARJhqmArQyRYixvxcjCOCLG6yomuk2X6tXgojlYExJApWjbc0fLg7lFRkvGhbCGmPrtGsHG4A4JB54MZFww49uF9b6oZ616MDkEE_kIHhb4sErXku7sLK4HHTqMLd_Zt7E2i/s500/tsla.png" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" data-original-height="350" data-original-width="500" height="448" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhsRtO88QHZARJhqmArQyRYixvxcjCOCLG6yomuk2X6tXgojlYExJApWjbc0fLg7lFRkvGhbCGmPrtGsHG4A4JB54MZFww49uF9b6oZ616MDkEE_kIHhb4sErXku7sLK4HHTqMLd_Zt7E2i/w640-h448/tsla.png" width="640" /></a></div><br /><p><br /></p>Unknownnoreply@blogger.com0tag:blogger.com,1999:blog-2898228231958184852.post-30932344544926252292021-03-14T20:09:00.000-05:002021-03-14T20:09:14.802-05:00LEAPS / Lenny Dykstra / $TSLA - how it started<p> </p><p>14march</p><p>been awhile but wanted to post some thoughts about how it all started. ive received a few new followers on twitter with some questions to my trading method with TSLA. i have to admit that although i follow less than 100 people on twitter it might be just 1 or 2 that buy Leaps / sell calls / diagonal spreads like i do</p><p>so heres how it started. remember Lenny Dykstra, ex MLB player.. he did a short stretch with Jim Cramers website in the mid 2000's and had a column. he had a unique method, pick a stock that was unfairly sold off, buy ten deep in the money calls a few months out(near 90delta), thus controlling 1000shares, and selling after a $1 move . getting you a $1000 profit. not looking for home runs , just constant and repetitive singles. </p><p>buying Leaps at that time was almost unheard of in the pre-twitter world. if the stock continued to move down he would buy another block of ten Leaps and average down. the downside to this method is number one you need to be able to have the cash for a ten lot purchase. which i did not, which makes it really stock specific. regardless i became intrigued with the buy a deep in the money leap to participate in a bullish move, both from a cash available standpoint and leverage. as in you could buy 2-4 Leaps for same price as 100 shares of stock</p><p>Now Lenny crashed and burned with some legal problems and a quick read of his twitter stream it seems like he is not active in the market</p><p>So that brings us to TSLA. at roughly 700 a share now, again my bank account is not big enough to swing around 100-1000 size share trades and be somewhat diversified, so again im participating using Jan2022 Leaps, currently have 5 again at various strikes. </p><p>Im not a full time trader and still work like alot of other slaves so besides stock appreciation i ALSO want to generate premium from my positions. if i had the stock id be selling covered calls. cant do that unless you have 100 share increments. but if you have Leaps you can sell shorter dated calls against those leaps just like covered calls. your broker considers it a spread trade so no additional margin or buying power is needed. buying leaps and selling shorter dated calls is also called "poor mans covered calls" , indeed, thats exactly what im trying to do.</p><p>but i want to ramble on about something ive seen a couple of TSLA mega bulls say and do recently about exercising their Leaps into stock come opex time and use me an example. so a popular thought by the megateslabull is to never sell stock, pay no taxes, use margin to buy more Leaps.</p><p>refer back to what i said earlier, i use Leaps for the leverage vs buying stock. simple example if you were just starting a TSLA position today:</p><p>stock near 700 ($70000 for 100 shares), the Jan2023 500strike call is going for about $343 ($34300) per contract.. so simple math for the same $70000 for stock you could buy two 500strike calls. and now you could sell two short calls against your position vs just one if you bought the shares. lets say the April2021 800 call for $25ish ($2500) . obviously bringing in $5000 in premium credit vs just $2500 as a covered call. and you have 20months to keep selling premium. now remember this example for later</p><p>so the megateslabull come opex time will convert the Leap previously bought months /years prior to stock. now use my situation as an example. blind squirrel sometimes finds a nut happened to me and i bought a jan2022 300 strike call at $143 last year. currently worth $415 ($41500). there is some time value in there but right here right now at least a triple. FOR THE SAKE OF THIS EXAMPLE LETS PRETEND 415 IS THE CLOSING PRICE AND EXPIRES NEXT WEEK. </p><p>i have 2 options for expiration. i can close the position in some fashion (close/roll) and have $27200 in capital gains and $41500 cash added to account OR do what megateslabull is doing and exercising the call and converting to stock. that means in my case i would have to pay the strike price or $300 ($30000) and now i own 100 shares with a cost basis of the $30000 plus the premium of the Leap at purchase time, $143, $14300 = $443 cost basis on shares worth near 700. converting the Leap to stock is not taxable and my account value does not change. is this necessarily the best move for ME though? i still have a "position" of 100 shares like i did the Leap which controlled 100 shares, i can still only sell a one lot short call against, my cash balance is $30000 lower in account, but i save the capital gains on $27200 which just for easy math lets say $5000 for long term cap gains tax. Summary - $30000 less cash, only 100share position allowing a one lot short call sale going forward, but not pay $5000 in long term cap gain tax</p><p>here is the other option that i believe might make more sense for ME .. again for pretend that option expires next week... so instead of converting to stock, i take profits on the 300Leap so $41500 cash hits my account and using that $30000 i would have needed to convert the Leap to stock i instead BUY 2 of the Jan2023 500 strike call at $343 each (so about $69000ish) . now i have control of 200 shares via Leaps again vs 100 shares of stock and can sell two lot of short calls against. remember those April 800 calls x2 brings in near $5000. that pays the long term cap gains tax.</p><p>remember my strategy is not to accumulate shares, but to maximize the few dollars i do control for both stock price appreciation AND premium via shorter dated call selling. you could argue that accumulating LEAPS should be more of the priority because it allows you to sell more shorter dated calls against. My thinking might be different if i had multiple millions in the account im sure.</p><p>Im running Leaps on TSLA, LEN Lennar, NFLX Netflix , AAPL Apple and the thought goes thru my head often if i should be squirreling away cash in order to convert come 2022 and 2023 opex but my math always comes back to rolling into more Leaps. altering the grand strategy just to not pay taxes limits my ability to bring in more premium. i started keeping a more detailed journal the last 2 years and the biggest part of my gains are coming from the premium im bringing in on various positions. i will never be that furu that buys that 2dollar call times 100 and now its worth 50 and then take a screenshot of how much im up and on the side talk about starting a service. cant figure why someone would want the bullshit of a service if they are killing it in the market. or are they?</p><p>just some things to consider. your situation might be different leading you to take the other side of what im doing. free country</p>Unknownnoreply@blogger.com0tag:blogger.com,1999:blog-2898228231958184852.post-54999131432459581082021-01-25T20:39:00.002-06:002021-01-25T20:39:44.054-06:00todays $TSLA adjustment<p> </p><p><u><b>25 jan</b></u></p><p>couple quick sentences about what i did today. too much to tweet.. .ok put your helmet on..</p><p>previously had 5 long 2022 calls: 300strike, 400strike (x2), 600strike (x2) that ive been selling short term upside calls against. the strategy is working well. my brokerage account is a clean +125% year over year and admittedly most is due to tesla.. but ill take the win where i can.</p><p>so the least good thing to happen is for stock to blow thru my short calls. although my long calls are gaining more than my short calls are losing compared to straight up selling new short calls out of the money im not making as much as i could be. </p><p>ive rolled a couple times and had this weeks 690 short calls (x4) and a 707.50 short call (x1). what that positions me for is a decent pullback either tesla specific or a markets in turmoil week or two. ive been rolling and managing to bring in some income for couple weeks. but now with the stock so far past these strikes the rolls of up and out 10-15 strikes are not there. pricing these out would have had to roll flat or go out more than a week. flat would bring in a couple bucks but again im not looking for $1-$2 ($100-$200) per roll</p><p>so thats the trigger for me to adjust the entire position in order to be able to again sell out of the money calls. in order to do that i need to close out all 5 short calls... thats a huge cash outlay..$80000+ , in order to pay for that i sell enough of my long calls (ie take profits on long calls to offset the "losses" of the short calls) to pay for the $80000 ... i want to hold the 300strike long call for a potential conversion to stock come 2022. so selling the two 400 strike calls exceeded the 80k needed. </p><p>etrade kept rejecting the order to close 4 690calls, 1 707 call, and 2 400 calls, a 3 leg trade.. order entered but after a couple minutes it was cancelled. email auto note said essentially need to close 2 short calls and 1 long call per order to make it work... bid ask on the "cancelled" order bounced between $20-$70 credit ($2000-$7000) .. so lets just say i exited with a credit on all this.</p><p>yes a paper loss on the short calls, but paper gains on the long calls. account balance unchanged. </p><p>so now im back to just having the 3 long calls for 2022. the stock was taking off again, maybe the biden government vehicle to EV goal , maybe part the enthusiasm along with Gamestop trading... so with earnings on wednesday i wanted to get the short calls on the board, probably leaving some on the table. but the first strike at the time i looked that had $20+ in premium was the 960s. so sold 3 short 960s for Jan29 opex... 29delta. stock closed near 880, so i have essentially 100points of upside potential for this week.</p><p>i try to get $20 per in premium on earnings weeks, could have closed for 50% win during the day but was in and out all day and couldnt really keep up with the happs , just ride these out for the week.</p><p><br /></p><p><br /></p><p><br /></p><p><br /></p><div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgRzZkqUPU2AB0gbUnzec2fZpPfGhSA0q3zbMlHwOLs1k4JlgpNdQ_7IC_l-Cpcm05RMMLhmErS0R61UCE_BJ5nYYkKXlS2n2RRebLJcbjDasmpZaAcvPyz_f5vyu2D2YrWx1vSOtkOcHK5/s500/tsla.png" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" data-original-height="350" data-original-width="500" height="448" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgRzZkqUPU2AB0gbUnzec2fZpPfGhSA0q3zbMlHwOLs1k4JlgpNdQ_7IC_l-Cpcm05RMMLhmErS0R61UCE_BJ5nYYkKXlS2n2RRebLJcbjDasmpZaAcvPyz_f5vyu2D2YrWx1vSOtkOcHK5/w640-h448/tsla.png" width="640" /></a></div><br /><p><br /></p>Unknownnoreply@blogger.com0tag:blogger.com,1999:blog-2898228231958184852.post-40023537386900197742020-12-27T19:55:00.000-06:002020-12-27T19:55:18.701-06:00$TSLA $1500 and margin?<p> </p><p>27 dec</p><p><br /></p><p>ok have to say a few words about what ive read over this last month. there are 3-4 people i follow just for their incites into TSLA. sales, balance sheet analysis, etc... the shit im not really too interested digging into but will gladly read if its dumbed down and easily readable being the good lurker i am. there are also a couple i follow for amusement but in a way like you watch a house on fire. you hope no one got hurt but you just cant look away.</p><p>first off, my method is i currently have 5 Jan2022 deep in the money calls and i sell short term calls against for premium. my personal goal is to make at least $2500 a week from just those TSLA calls. its not alot but to me its really good for just waiting. essentially like covered calls, roll out from week to week, sometimes 2 weeks to get more premium. on a side note ive discovered that it seems like par for the course if youve made good coin on TSLA you have to tweet out screen captures of how much or your percentage of profits routinely. very annoying. but since it bears on this explanation ive had my best year ever trading and i owe it all to selling out of the money calls on TSLA.</p><p>so thats me, thats what i do, and thats the risk reward im managing. as far as one TSLA guru who will remain nameless because i dont want to be blocked so i can keep watching this unfold... this guru is developing quite a reputation and following for buying way out of the money calls such as Jan 2022 1500s etc and using margin to do so and not selling those calls , instead converting to stock to save from paying taxes. you know who i mean if you follow him. developing a reputation as in twitter followers, interviews, etc</p><p>first thing and most importantly for all us "normal" traders / investors... why we cant do what he does because he clearly has a huge bankroll from the get go and can absorb a margin call. if i could straight up afford 500 shares of TSLA post split and that was 25% or so of my portfolio id just buy the common. thats why most of us mess with options... side note again.. i chuckle sometimes when i read the TSLA stream and i see someone tweet that they added 10 shares on the dip. which is big in dollar terms for some but the shear dollar movement in the stock required to see a decent gain is huge. that capital could be used selling credit spreads, etc </p><p>regardless im going to say im pretty normal compared to other traders in account size but come option expiration in 1-2 years i dont see me having 300K unused in my account by then to convert to stock. i would argue taking profits near expiration and having the long term capital gain taxes apply and using the capital to buy at least 2 possibly 3 further out leaps.. example i have a Jan2022 300 strike leap i bought right after stock split.. so nearly 350points in the money(etrade says its up 176%) .. so come Jan2022 i would close that out for whatever profits, be subject to long term capital gains, lets say the stock is at $1000 by then.... and then with all that capital i might buy TWO or THREE Jan2024 /2025 calls. maybe have to throw in some cash to make it happen. the point of my Leaps is not to accumulate stock, its to have a base to sell short term premium against. so instead of converting for 100 shares at a cost of $30000 (the cost of the call) and being able to sell only one short call against, i would have two or three long calls to sell short calls against. best case for no added cash. yes taxes but im sure there are some losses i can use against.</p><p>ive watched part of his youtube interview. honestly fell asleep before it finished but got the jist. our guru is not afraid of margin calls. my read is that mr. guru is already a multimillionaire with plenty of cash on the sidelines.. ie he could take a margin call and not have to eat ramen noodles for dinner. remember those noodles?? 10cents a pack in college?. ive been thru a margin call.. the best way to get out from under it is to close out the stock/options thats causing it... just take your loss and move on, take your kick in the crotch and move on.. problem is those margin calls come super fast.. think back to march of this year when the market sold off. Markets In Turmoil everynight on cnbc.. no shit there i was.. chart below is post split so in the circle the top was around 880 or so . im selling 5 delta short puts ... 5 DELTA is said.. a 4 delta is a 2 standard deviation move. each broker is different but i believe at etrade you needed 20% cash on hand to sell a put. but if youre on margin you have to keep having more collateral available if the stocks (your portfolio goes down), etrade emails out that TSLA requirement is now 40% or whatever...then later 75%, then 100%. i remember 3 emails in one day.. so i rolled out and down an week that bought me some time but not enough. got to the point where i would have to close out the rest of the account to be the collateral for the short puts... ended up just closing the puts, taking a $10000ish hit and living to fight another day. (and vowing to make it back off of TSLA in spades)</p><p>so point being in spite of being somewhat diversified i could not outlast the panic of the 2-3 week selloff. turns out if i could have held out to opex i could have closed the short puts for a profit.. (and the 5 delta pricing held up) i just got forced out. now having said all that, if you do what our guru is doing you are playing with fire. i also saw another youtube clip from someone else that he mortgaged his house to buy more stock.. so our guru despite having plenty of cash can very likely withstand a 300 point drop in the stock.. will still suck, will have to sell some of his positions or add more cash to the account. i think i caught a segment where he said he welcomed a margin call because then he could accumulate shares/leaps with a better cost basis. ill take the side of being opportunistic in adding positions, such as selling puts as a way to enter at lower cost basis</p><p>another note, ive had very short interactions via twitter with a couple of the high profile TSLA bulls similar to the guru, as in out of the money stock purchases in 2022 and 2023.. and im also to the point of making a generic statement that most of these guys have not even a basic understanding of options. specifically selling options for premium. for instance prior to the sp500 inclusion..during the run up hype. one mini guru was buying 800strike calls mid next year.. i asked if he was at least selling shorter dated calls against those 800's to bring in some premium and lower the cost basis as well. going off memory a near dated 800 was going for $500ish. his response was "selling calls is risky, i dont want to lose my shares" ... WTF? thats a newbie comment of not knowing what to do when your near term call is about to expire, or when to roll for credit. everyone is a genius when the stock is going up. but what if it stays range bound, as in between 600-700 for a year. now what are you going to do? can you make money in that environment?</p><p>im afraid that the stock appreciation has made experts out of people that in hindsight can be attributed to being that 1% that got it right. theres always a lotto winner somewhere. doesnt mean they were smarter than you. just like me buying a 300 strike call in Sep doesnt make me any smarter.</p><p>Forgo some of that upside potential. you cant go all-in every hand. at some point you will get burned. can you survive if some geopolitical event caused TSLA to drop 300 points this week? and your broker all of a sudden to cover his ass required you to have as much cash on hand as you want to margin. if you say No then you have too much risk. </p><p>Similar but not similar, when the stock was added to the spy and did that crazy move to 695 on the 69million block trade and then one second later down to 670s.. saw multiple tweets about how they held calls / puts into opex expecting the market to do one thing but now they have $35000 loss.. once you think you have it all figured out, the market will take it away from you to show youre not as smart as you thought. me included.</p><p><br /></p><div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhQTQHFmOFgYD1TA7lHfmep_4-aSjI8vhqQjJlwqLDoo1JPnJc1-lfzW84Nro4UKm8jgWpYcAZYsEwiri7GnrLxccTcW2ygUstMWEbNJ4pzwmWujQbfk-nxuDfzEU3u7VrYTGLHvxdfsXn6/s500/tsla.png" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" data-original-height="350" data-original-width="500" height="448" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhQTQHFmOFgYD1TA7lHfmep_4-aSjI8vhqQjJlwqLDoo1JPnJc1-lfzW84Nro4UKm8jgWpYcAZYsEwiri7GnrLxccTcW2ygUstMWEbNJ4pzwmWujQbfk-nxuDfzEU3u7VrYTGLHvxdfsXn6/w640-h448/tsla.png" width="640" /></a></div><br /><p><br /></p>Unknownnoreply@blogger.com0tag:blogger.com,1999:blog-2898228231958184852.post-60045228664329800122020-12-27T18:21:00.003-06:002020-12-27T18:22:32.296-06:00On the ground with the homebuilders<p> </p><p>had to add some commentary about whats really happening on the ground with homebuilders. seeing nearly weekly reports about best interest rates ever, existing home sales drops, new home prices all time high, etc, the reports coming across my stream are conflicting as if they dont remember what they (cnbc) just posted the day before.... so heres the deal.. </p><p>a few of my long time followers know i work in the homebuilding industry in south texas and "i know a guy that knows a guy" . these comments are not on a specific builder since the issues are industry wide. </p><p><u><b>Sales</b></u> - sales are best ever ive seen, even better than pre-financial crisis.. difference is the pace is better without the bullshit no income verification, 520 credit scores, no job type of loans that helped cause the financial crisis.. if you roll into a sales center with a 520 credit score thinking youre getting a home loan for $300,000, let me save you a trip. they dont need your business. i took a recent drive thru a couple subdivisions with new homes under construction that had 4-5 different homebuilders and price points. it was assholes and elbows, so much construction happening almost to the point of not being able to drive down the street. saw 95% "sold" signs for homes under construction. that means pipeline. that means they are closing those homes the same month the construction is finished. that means very minimal finished homes that are unsold</p><p><u><b>Pricing</b></u> - the difference between a home under construction vs finished is going to be the pricing. those 95% of homes that are sold... why would the homebuilders offer any discounts for those? outside of the paltry 1% or so to use their lender or something similar. with the current pace of customers prices are getting raised across the board.. between a couple thousand or 5% straight up. or you can buy this one that will finish next month for sticker price or if you want to build one in the new section for 3rd quarter 2021 for 3% more. 3% doesnt seem like much but on a $400,000 sticker price that $12000. eventually the price will reach a tipping point but the market is not there yet.</p><p><u><b>Starts</b></u> - new home starts and permits are always metrics shown on the business shows, the homebuilders see whats going on and its not a bad problem to have. that being not enough homes on the ground so new starts get increased.. ive seen reports /tweets from homebuilder management about wanting 10% or better growth next year.</p><p><u><b>Labor</b></u> - despite what you hear on TV about the unemployment rate, there are significant labor shortages. homebuilding boils down to whats happening at the subdivision level. thats where 1-4 construction managers schedule the daily labor and material work to happen. those subdivisions have their own tipping point. a frame crew can only go so fast, the painter crew can go only so fast, the roofing installers can only go so fast. so the grand visions of just slam more new starts down the pipeline doesnt always work. the homes just get backed up. the labor base is at its tipping point now. again from that guy that knows a guy, good ways to track that are how many people are looking for work. in south texas its generally larger companies that do plumbing, electric, HVAC, etc , they have the contract for multiple subdivisions or certain series. the smaller trade partners (trades) such as painters, carpenters, cleaning crew, framers, etc are selected by the construction manager at the subdivision level and its literally a crew in a van. they have the appropriate insurance etc with corporate but there are no unions etc here. so point being, no one is looking for work.. they have as much as they can handle now. i even heard a really stupid comment from Melissa Lee on one of the Fast Money clips (which is not normal for her but if youre not in the industry you dont know)... she said labor is not a problem in construction with the high unemployment rate, as in there are plenty of people looking for work.. ok , well i guess. but do you know anyone that looks a TPS reports all day or works as a bartender that has lost their job and decides to now want to hang drywall? not happening . current significant shortages for labor are flooring installers.. tile and carpet. just not enough crews reporting in first thing with the flooring companies </p><p><u><b>Material / Covid</b></u> - 2020 has seen unprecedented disruptions in the supply chain. innocent events such as a plant in Pennsylvania shutting down from covid because 2 guys tested positive and that plant makes all the cabinets for the texas region, or the window manufacturer shutting down their lines because a guy was at a BBQ where someone had Covid and they supply nearly all the windows in the city for muliple builders or a near miss from a hurricane in Texas rips thru Louisiana where some lumber mills are resulting in really long pieces of lumber being backordered... those really long pieces you would need for rafters. no rafters means the home comes to a stop. the pendulum swings back and forth on whats short, currently shingles and garage door panels, last month dishwashers. i hear roof decking radiant barrier and hardi type siding products are getting tight also. so not just covid, think of all those homebuilders , both public and private, plus the renovation crowd increasing the orders to capitalize on the increased sales.</p><p><u><b>Stocks</b></u> - i dont trade futures so i cant participate in lumber price movements and from my research the best play has always been just trade the homebuilders, not the ETFs. the builders tend to move in concert but of course some execution risk. ive been trading LEN Lennar for ages so i just stick to that one. TOL Toll brothers reports a few days prior to Lennar so its a good way to gage the tone of the sector based off what Toll says.</p><p><u><b>Bottom line</b></u> - despite the inconsistent CNBC tweets that vary from "its the best ever" comments to "market cooling" , the homebuilders are building as fast as they practically can, customers snapping them up even before construction has started and paying full price most of the time, and per recent conference calls the homebuilder margins are best ever. thats a business i would be interested in trading with a bullish thesis. there will be some give and take as usual. having lived thru the financial crisis with the builders and watching them barely survive, the issues they are working thru now are good problems to have. </p>Unknownnoreply@blogger.com0tag:blogger.com,1999:blog-2898228231958184852.post-42441445420547268302020-11-21T08:42:00.002-06:002020-11-21T08:42:50.824-06:00$TSLA current positioning<p> </p><p><u><b>21 nov </b></u></p><p>my current positioning and thesis for TSLA. have been making good coin selling weekly short calls against my long 2022 calls. at some point with diagonal spreads the stock blows thru the short calls for whatever reason. i was lucky that i had closed out my short calls the day prior to the S&P inclusion announcement so i was able to sell new short calls after the 50point pop. the stock moved an additional 40 points or so since. </p><p>i currently have the Dec04 465 short calls that i rolled up from the Nov monthly 455s. rolled for $4.05 credit. Yes the short calls are 25points in the money but have $12 ($1200) in extrinsic value (time value) that will decay up until opex. as in it decays in my favor</p><p>the breakout level / resistance level everyone was looking at was 462 area. that breakout is holding for the moment. </p><p>just considering my short calls the ideal action would be for stock to drift back down to 465 area for me to capture all that premium and then be able to sell a higher short call for the following week. i previously tweeted that if stock pulled back to test that prior breakout area (previous resistance becomes support) then i would look at selling a short put at least below the 50day near 425 or best case at bottom of the gap near 412.</p><p>that got me thinking that maybe the retest is unnecessary for this situation since the S&P inclusion will artificially create buying. volume since announcement seems like the buying has started but not completed. so an artificial floor has been put in.. maybe that floor is the previous breakout, maybe higher. so my conclusion was any dips will be bought at least until the inclusion on 21dec.</p><p>ideal situation for me is to sell a strangle... sell a put and sell a call. i dont have naked call option writing access at etrade and really dont want it. likely has kept me from entering more risky trades. so the poor mans version is to have a long call first(my Jan2022 calls) and THEN sell the short call. broker treats that as a spread so no additional buying power/margin needed. Put selling is easy since its cash secured or within my buying power</p><p>All that together now means using the old breakout level as my line to shoot against i sold the Dec04 460 put for $11.25 credit ($1125).. see what i did there? kept the same opex as the short calls</p><p>scenarios at opex</p><p>1. stock above 465. the short put profits, i capture most of the $12 time value remaining in the short calls and resell higher strike calls for the following week</p><p>2.stock below 460. capture most of the premium on the short calls and resell following weeks calls. the short put will be rolled down and out to the next week if needed. if i have not taken profits previously</p><p>3. if stock sells of down to 465 area rapidly on one of those markets in turmoil days i will look at rolling the short calls up and out to gain a higher short strike. concurrently roll the short put down and out (keeping the same opex time as the short calls)</p><p>i can use the rationale that i can hold the short put up until i roll out the calls since either the Put or the Calls is profiting. this situation pays by not trading till near opex or per my mechanics of when the time value is less than $1.00. im not looking to thread the needle and hoping for the stock to close between 460-465 at opex. im using offsetting positions and profiting from the decay</p><p>so now just sit tight. have $500+ of daily decay in my favor</p><p><br /></p><div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhlFzowhXfNPeK-UU2zYH4_FaSJg81wTaYJsn6XtdedvkKSPKdXFLCQ69JQQ6HZGOdlcAf3NjAyY1v4N2r5i4ps_MyrSZb3W53IQZdwiVB9UcNxm8GEt3Ol2TpLTk4VuN-BhVlKecUpzwvp/s500/tsla.png" style="margin-left: 1em; margin-right: 1em;"><img border="0" data-original-height="350" data-original-width="500" height="448" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhlFzowhXfNPeK-UU2zYH4_FaSJg81wTaYJsn6XtdedvkKSPKdXFLCQ69JQQ6HZGOdlcAf3NjAyY1v4N2r5i4ps_MyrSZb3W53IQZdwiVB9UcNxm8GEt3Ol2TpLTk4VuN-BhVlKecUpzwvp/w640-h448/tsla.png" width="640" /></a></div><div><br /></div><div><br /></div>and what does old school Debra Winger from Urban Cowboy have to do with TSLA... not a damn thing.<br /><div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhC9NcdsW6riIrhiKHOhH3Omw7rytRgtSVx45mgNV75XeUlDsC8CKx9zR_jicCs2MNz8tf5XQx32g00cHZ4sMO3M7dea77lPu6fhi66g_OJkd_6YT4RHWGgxxn2BpD6gm5qKXC-T8T0jw0s/s500/winger.jpg" style="margin-left: 1em; margin-right: 1em;"><img border="0" data-original-height="500" data-original-width="400" height="320" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhC9NcdsW6riIrhiKHOhH3Omw7rytRgtSVx45mgNV75XeUlDsC8CKx9zR_jicCs2MNz8tf5XQx32g00cHZ4sMO3M7dea77lPu6fhi66g_OJkd_6YT4RHWGgxxn2BpD6gm5qKXC-T8T0jw0s/s320/winger.jpg" /></a></div><br /><p><br /></p>Unknownnoreply@blogger.com1tag:blogger.com,1999:blog-2898228231958184852.post-71939918499501851532020-10-24T21:27:00.000-05:002020-10-24T21:27:11.278-05:00$NFLX trade for monday, and a 1 x 2 call ratio<p> </p><p><b><u>24oct</u></b></p><p>alright meow, put your helmet on for this one. the morning after earnings on the 21st with the stock down 30points i sold a Nov06 455 short Put for $5.00 credit. about 19 delta. 2 trading days have passed with friday being green and i noted a couple of the TA wizards on my stream noting the hammer and being short term bullish. it does seen that the sellers have shot their wad. i have been looking for an entry for a Jan2022 long call in order to get back into diagonal spreads. the short put is at $4.50ish now and the stock is near the bottom of the bollinger band and as you can see just from this small chart below that the stock with a few exceptions, does not stay at the extreme edge for long. on the bottom extreme anyway.</p><p>so here is what i will be looking at: </p><p>first will look at buying a Jan2022 long call. id like at least a 70 delta so i will start at the<u> Jan2022 430</u> call (70 delta meaning option moves about 70% as much as the stock). the 430 call is at $125ish ($12500)</p><p>then - im in the nov06 opex week on the put, so staying with that opex with the thesis that the stock starts to rebound and work towards filling the gap. i will look at a <u>Nov06 495/515 call ratio</u> (1x2), thats buy a 495, and sell two 515s for near zero . just the ratio spread profit range at opex is 495-535</p><p>will review after market opens on monday </p><p></p><div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEh_VewSrHoW_79CuDstzKwNmFhZe0WeQo5Ex5K-sB-ueHT7sIW5ode9Gxrv540ERENOxgDPizdxmAB9k0sVSy3p1OsoVOqn-c3uD2LdEZMmNemu5GNOlVVX3Mh7WxMs2zm4O3LzQ0e_g3CE/" style="margin-left: 1em; margin-right: 1em;"><img alt="" data-original-height="478" data-original-width="640" height="478" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEh_VewSrHoW_79CuDstzKwNmFhZe0WeQo5Ex5K-sB-ueHT7sIW5ode9Gxrv540ERENOxgDPizdxmAB9k0sVSy3p1OsoVOqn-c3uD2LdEZMmNemu5GNOlVVX3Mh7WxMs2zm4O3LzQ0e_g3CE/w640-h478/image.png" width="640" /></a></div><br /><div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgybpaLDbeg0_6SFHmlAzjOOXv9A8GI8LXqvXmFHKi9tUz8tTaJTDbDMV2dpTYJoisB5w7EuNfl7zFEbY8FHrcWF3VQb-7CVim-Bd6TVJYZqDvLv7SuiWm_O_RZMZMTfshmct-WlXLA7mXt/" style="margin-left: 1em; margin-right: 1em;"><img alt="" data-original-height="478" data-original-width="640" height="478" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgybpaLDbeg0_6SFHmlAzjOOXv9A8GI8LXqvXmFHKi9tUz8tTaJTDbDMV2dpTYJoisB5w7EuNfl7zFEbY8FHrcWF3VQb-7CVim-Bd6TVJYZqDvLv7SuiWm_O_RZMZMTfshmct-WlXLA7mXt/w640-h478/image.png" width="640" /></a></div><br /><br /><p></p><div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjaraAcZA65h4M552SWo7VDqSjlFzT9uX_ZwCSTryR6oITLtWiFGhr3e75wxPDQQ6O1x7MUMkAhUaPMA3rvk7h6UWkFHajZY4ysT7LCRy6F5cBRyXswVrS8Bsbum016Ty8PS0zLSarCEBs_/s500/nflx.png" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" data-original-height="350" data-original-width="500" height="448" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjaraAcZA65h4M552SWo7VDqSjlFzT9uX_ZwCSTryR6oITLtWiFGhr3e75wxPDQQ6O1x7MUMkAhUaPMA3rvk7h6UWkFHajZY4ysT7LCRy6F5cBRyXswVrS8Bsbum016Ty8PS0zLSarCEBs_/w640-h448/nflx.png" width="640" /></a></div><br /><div class="separator" style="clear: both; text-align: center;"><br /></div><br /><p><br /></p>Unknownnoreply@blogger.com0tag:blogger.com,1999:blog-2898228231958184852.post-16793525997027200632020-10-21T22:21:00.000-05:002020-10-21T22:21:07.309-05:00$LEN trades this week<p> </p><p><u><b>21 oct</b></u></p><p>alright meow, you cant have it both ways. you cant stroke the housing stocks with headlines (just this week) that new housing permits are best in years and mortgage rates are at all time lows again and then have a 4% selloff on "stimulus worries"</p><p>posted previously the current levels im looking at. yesterday with stock near 84 i sold the Nov06 86.50 short call at $2.10. on monday as the stock approached 82 i sold the nov06 79.50 short puts at $2.05... referencing the levels , was looking to get at or below the low of 7oct at 79.72 for the Put sale.</p><p>of all the few stocks i follow , todays homebuilder selloff seemed the most odd, i dont buy the stimulus worries excuse but whatever. one of my alerts at <81 hit so added another short Put at Nov05 78.50 level this time to stay below the rising 50 day, also near same time reached 50% of max gain of the short call so closed that out after a one day hold. not much cash but paid for some lunches and fill the tank to the truck for the week. </p><p>followed my levels again that i was looking at. resetting alert at 84 to look at reselling short call near 86ish again.</p><div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjR2LbqkjDjx51OTe9nboFXyF4MXo6gxJFf-nnYW1greYqM5VCoHau8EMkPnIqb14HLNkRO0zAaUFTxBRNP4vi6jXaHq2nJuOZEaACxgRDIKXS4ZKuQne_GOcYnva2Hwb9pkd6yD6lRWRxt/s500/len.png" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" data-original-height="350" data-original-width="500" height="448" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjR2LbqkjDjx51OTe9nboFXyF4MXo6gxJFf-nnYW1greYqM5VCoHau8EMkPnIqb14HLNkRO0zAaUFTxBRNP4vi6jXaHq2nJuOZEaACxgRDIKXS4ZKuQne_GOcYnva2Hwb9pkd6yD6lRWRxt/w640-h448/len.png" width="640" /></a></div><br /><p><br /></p>Unknownnoreply@blogger.com0tag:blogger.com,1999:blog-2898228231958184852.post-71219653479009062692020-10-21T21:47:00.000-05:002020-10-21T21:47:23.357-05:00$TSLA trades for earnings<p> </p><p><u><b>21 oct</b></u></p><p>-some of you have been following along with my recent selling short term / weekly calls on TSLA and making some good cash. to recap, have 5 jan2022 DITM long calls and selling 5 weekly calls against them. went into todays earnings with short weekly 430, 450 (x3) and 452.50 strikes. two of the450s were added today as they were trading near $10 in premium with stock near 430. </p><p>an up move would be fine, flat would be fine, down a little fine, but down big as in more than the expected move would not be cool. so in order to get some cheap protection i looked at the level that many were looking at near the low at 351ish.. so i bought a 3 lot of weekly 350puts for .58per.. thought was in case a knee jerk selloff, possibly on a odd metric, or conference call off the cuff comment that would trigger the algos that these puts would do a 5x or so spike and can exit quickly in the morning and soften the blow of the selloff. plus .58 is cheap. dont want to pay alot for this asteroid insurance.</p><p>also the price action and my twitter stream wasnt outright bearish but lacked the over bullish hype as before. was more focused on the fundamentals of number of deliveries and EPS. a Mike Khouw hit on FM also mentioned significant selling of the weekly 450s for premium. (i already had one and a 452.50) . got the feeling that the big up move had already been priced in (a move less than the expected move) hence my tweet about a flat reaction. </p><p>but to guard against a selloff even more with minutes to go i entered into a weekly 380/360 1x2 put ratio for .03debit. the ratio profit range at friday opex would be 340-380 .. if it drops below 350 then my 350puts from yesterday are gaining. i did not try to figure out a breakeven of the ratio AND the 3 puts if stock broke down AND the near max premium from the 5 short calls. a possible plus to a breakdown was a possible short put entry even lower.</p><p>that was the thought process. get a gain on the ratio and puts if a selloff happens but for cheap cheap.</p><p>now that earnings have hit, looks like good metrics across the board and stock was between 430-440 after hours. i will close out either just one of the short 360puts to regain my buying power and leave the 380/360 debit spread as a lotto or close the whole Put ratio likely for pennies in the morning. leave the 350puts as lottos since likely just worth pennies and see how all the short calls price out, best case mainstream Joe SixPack who is not trading after hours will buy in the morning and a couple analysts stroking each other to get the first and or the street high upgrade and get the stock to near 450 in order to get a better roll.. will see how the pricing looks tomorrow. would like to roll at or slightly above the 460 area as a minimum. will look at next weeks opex first. goal is to get at least $10 credit per contract for a roll out, if i can gain a strike or two that would be gravy.</p><p>will also look at :</p><p>-at least one short call 2 weeks out</p><p>-possibly one short call 45or so days out per some recent tweets ive mentioned about where the sweet spot is for premium decay</p><p>hope you guys made some coin too. it works till it doesnt</p><p><br /></p><div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEidOaBSBVhZSpMEgQGmx9qcQi3aUgXO5YXjn0oKVcMSKaYhuOcMli1eu72vB-SX918r125xDTtKdLOuczc63FbUzCJIuxMuV953s-G_4xVaYmmDYq41Omfh8aoMlhdoYfwPY_q78FhAPoDG/s500/tsla.png" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" data-original-height="350" data-original-width="500" height="448" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEidOaBSBVhZSpMEgQGmx9qcQi3aUgXO5YXjn0oKVcMSKaYhuOcMli1eu72vB-SX918r125xDTtKdLOuczc63FbUzCJIuxMuV953s-G_4xVaYmmDYq41Omfh8aoMlhdoYfwPY_q78FhAPoDG/w640-h448/tsla.png" width="640" /></a></div><br /><p><br /></p><p><br /></p><div class="separator" style="clear: both; text-align: center;"><br /></div><br /><p><br /></p>Unknownnoreply@blogger.com1