Iron Condor on TSLA

newwurldmn said:
ROP (return on premium) is stupid when looking at the return for shorting options. If your options were all of a sudden worth 50 dollars would you consider that a 1000 percent loss?
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I don't care if you think it is stupid, but that is how I calculate it. :)
And by the way an IC isn't just plain shorting options. It is shorting with a stop loss.

The position at 50 would be a 22% loss. (50-41)=9 where I consider 41 to be 100%.

Simplifying it, risking 3 to gain 2.
 
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I got curious so I looked it up. Some people calculate IC/spread returns based on margin:

http://www.monthlycashthruoptions.c...e-returns-roi-of-credit-spreads-iron-condors/

I think it is a personal preference. In the above case the margin would have been 59 (effect on buying power, money needed to maintain the position) and the max. return 41, so 100/59X41=70%

Still not 1%... :)

Also when the risk profile is close to 1:1, (the premium is about half of the wings width) then there is very little difference between the two calculations. I count the premium as 100% and they count the margin as 100%.
 
Pekelo said:
Never change a working strategy:

Selling March IC 290/300/390/400 for $4.15
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Unless Tesla drops 20 bucks in 5 hours, this position is going to expire worthless, keeping 100% of the premium.

This was the 3rd IC with pretty much the same set up in 9 months gaining all 100% ROI. But every good thing has to come to an end, and I don't think Tesla is going to be able to stay at this range. Due to the constant bad news, the range is going to move lower. So I am guessing price will be in the 260-360 range for the next 3 months...
 
nice trades Pekelo, no matter how you measure it,

here is a paper trade I did in Feb to test the TSLA water, looking for a real one now,
will probably wait until after the special share holder meeting on Mar 23...

took a paper trade TSLA using Heikin-Ashi candles, macd, and the recent price swings
between $300 and $350 as the triggers,
expected to be in trade for about 2 weeks, so went with 1 month option,
TSLA was trading around $320, available strikes at 315, 320 and 325, so went otm,
Feb 13, bto Mar16 325 call, $10.75
Feb 23, stc Mar16 325 call, $31.20
 
traderlux said:
what is the latest thinking on option trades for TSLA?
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I think I posted it in the $TSLA thread, but anyway, I expect it still to be range bound, but the range being between 240-340.

I should have posted it but my plan was to leg into the wings, instead of writing them at once. So when it went up a bit to 320, I would have written the 370/380 call spread, and when it dropped to 277 (or even 255), the 210/200 put spreads. Usually 50 bucks away from the current high/low.

I think the cult is still strong with this one, we shall see. Some idiot big entity can come in and buy "cheap" stocks. If they manage to issue more stocks somehow, they survive another 6-9 months.

This cat still will bounce as Thursday showed. Instead of buying puts, (specially after this drop) I would just write the call spreads, if one is bearish, that way time works for you.
 
Selling the 190/200/300/310 June IC for 4.1

The idea here is that the channel came down by 100 bucks but the stock will still fluctuate on its way to death...

Stock is at $248...
 
Pekelo said:
I think I posted it in the $TSLA thread, but anyway, I expect it still to be range bound, but the range being between 240-340.
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Man, I should be a writer for SA. The IC should have been set up using this range, but looks like the stock can't stay above 310, like there is a giant sell wall there. We shall see...
 
Pekelo said:
Man, I should be a writer for SA. The IC should have been set up using this range, but looks like the stock can't stay above 310, like there is a giant sell wall there. We shall see...
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  • Depends on when the trade is opened, the strikes chosen and expiry dates.
 
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