Drowning deep underwater TSLA SEP25 470/460 Credit Spread

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ITM_Latino

I know I got totally caught in the euphoria froth, I have my daily reminder.

So I opened (at least it was just 1) on Sep 1st:

TSLA SEP25 470/460 for 5.26 credit

I'm deep underwater, cost to get out ~ 8.80 debit

I'm thinking of rolling to OCT16 360/350 (it was almost at -6.00 on friday)

I have much less than 100 Shares of TSLA.

As much as I know that beast does great moves, being 26% away from the short strike I'm not aspiring to close this with any gains, but I do think I can get out losing less.

But honestly at the moment this position is taking it's toll on me and I am short of ideas, so any insight or suggestion is greatly appreciated.
 
Unless I'm misunderstanding your entry, you don't have 8.80 worth of risk in a $10-wide credit spread with 5.26 premium. Your max loss is 4.74/share.

If you're looking at an 8.80 debit to close, reduce that by the premium you got; this leaves you 3.54 down. It's not something to throw a party about, but if you don't believe that TSLA is going back up before expiration, then that's a cheap lesson on going short in volatile stocks.
 
ITM_Latino said:
I know I got totally caught in the euphoria froth, I have my daily reminder.

So I opened (at least it was just 1) on Sep 1st:

TSLA SEP25 470/460 for 5.26 credit

I'm deep underwater, cost to get out ~ 8.80 debit

I'm thinking of rolling to OCT16 360/350 (it was almost at -6.00 on friday)

I have much less than 100 Shares of TSLA.

As much as I know that beast does great moves, being 26% away from the short strike I'm not aspiring to close this with any gains, but I do think I can get out losing less.

But honestly at the moment this position is taking it's toll on me and I am short of ideas, so any insight or suggestion is greatly appreciated.
More...



You shorted the Sep25 460/470 put spread for 5.26?

You can short the Sep25 470/480 call spread for a buck. You'd be left with a 60/70/80 (short) iron fly for 3.74 risk; your risk, not marked. You need 470 best case. Reduces your loss by $100.

You're long a synthetic call spread. You can short an OTM put spread, but you're now in two bull verticals. Dumb. IOW, it's too late to trade a bear spread to fly or condor the thing off. You're 1.20 from max loss.

THERE IS NO FN REPAIR. Your Lambo is totaled.

Dude, stick to Sep25. Why roll to Oct and take the vega when you're going to be trading yet another bull spread in Oct when the Sep expires? Adding bull spread to bull spread.

Why are people so inured on fixing losses? If it sucks, close it. There is only 1.20 in juice in the thing anyway. If you're ok with losing $120 then leave it be. If not, close it. My guess is that you won't fill much under $9, so move on. The need to be right is a strong motivation.

You risked 474. MTM risk is only $120 from here. Is it worth $120 to you as an upside lottery ticket paying almost 9x risk above 470 on shares?
 
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guru said:
What @BlueWaterSailor wrote. You cannot turn a credit spread into a debit spread.
Your cost to get out may be $8.80 credit, so your current loss seems to be approx $3.55.
?
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Put credit spreads are call debit spreads. The equivalence is the box. I hate to evangelize it but nobody seems to get it.

He's MARKED to 8.80, guys.

He shorted the put spread at 5.26 so risking 4.74.

He should trade a bear vertical, but the bullets are out of the gun. Trading a bear vertical here is a tough pill to swallow. The smart move is to cover the short put vertical at the mkt and trade a fresh opinion on the shares and vol.
 
guru said:
What @BlueWaterSailor wrote. You cannot turn a credit spread into a debit spread.
Your cost to get out may be $8.80 credit, so your current loss seems to be approx $3.55.
?
More...

Thanks for the input,
I'm clear in the total loss amount by closing: debit paid to close minus credit received at open.

I structured the post in the way that it's shown on IB TWS, you 'sell to close' that particular spread position for -8.80 (selling at negative is a debit).
 
ITM_Latino said:
Thanks for the input,
I'm clear in the total loss amount by closing: debit paid to close minus credit received at open.

I structured the post in the way that it's shown on IB TWS, you 'sell to close' that particular spread position for -8.80 (selling at negative is a debit).
More...


It's trading at 8.80. Your remaining risk is strike diff less mark. Don't even bother with the sign. Now, when selling you lower the bid side price to be marketable; when buying you raise the ask price. Setup each spread individually on your TWS quote page as a DEBIT spread or combo... IOW, price everything as a long spread or combo--that way you're not reliant on whether it was a short or long at the inception of the order being filled. You may be short the spread, but if it setup as a long spread you will always be buying to close.

Say you're in a short iron condor. Set up the custom quote as a long otm call spread and long otm put spread (IC) on the order line. To SHORT to open you would hit the bid. To BUY to close you would lift the offer.

I think you're getting confused due to their combo templates and it's best to steer clear of their bullshit templates. IBTWS' best feature is quoting a complex spread or combo as a single quote. You can type a text header above it.
 
Last edited:
guru said:
What @BlueWaterSailor wrote. You cannot turn a credit spread into a debit spread.
Your cost to get out may be $8.80 credit, so your current loss seems to be approx $3.55.
?
More...


Yeah, his MTM loss is 880-526=354. The question isn't what he's lost but what he can lose. $120 is nothing but we're not going to rally $100 on the shares in this mkt. The date is inside any S&P committee meeting and no sales figures to be release.

If it were a single it makes more sense to hold into some $40 rally day, but again it's just a 10-wide vertical. There is no gamma here. Dump it.
 
I like selling the 70/80 vertical for a buck way better than closing at 9..

destriero said:
You shorted the Sep25 460/470 put spread for 5.26?

You can short the Sep25 470/480 call spread for a buck. You'd be left with a 60/70/80 (short) iron fly for 3.74 risk; your risk, not marked. You need 470 best case. Reduces your loss by $100.

You're long a synthetic call spread. You can short an OTM put spread, but you're now in two bull verticals. Dumb. IOW, it's too late to trade a bear spread to fly or condor the thing off. You're 1.20 from max loss.

THERE IS NO FN REPAIR. Your Lambo is totaled.

Dude, stick to Sep25. Why roll to Oct and take the vega when you're going to be trading yet another bull spread in Oct when the Sep expires? Adding bull spread to bull spread.

Why are people so inured on fixing losses? If it sucks, close it. There is only 1.20 in juice in the thing anyway. If you're ok with losing $120 then leave it be. If not, close it. My guess is that you won't fill much under $9, so move on. The need to be right is a strong motivation.

You risked 474. MTM risk is only $120 from here. Is it worth $120 to you as an upside lottery ticket paying almost 9x risk above 470 on shares?
More...
 
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