Why will this not work?

[taowave]

As long as you realize you are flipping from short call to short put with no fundamental reason why,take the shot...

Im also assuming you know your pain threshold and can stick with your plan despite eating 80 points on ..You coukd be down 3k on a fast move

It's the only way you will really learn what we are

 

[ironchef]

It is like a covered call, but with an order to buy the stock when it moves up to a stop instead of already owning the stock.

The option that would be sold was Apr 3 tsla $840c $41.95

Yes my first post had the incorrect date and mixed prices.

Yes I would buy 100 shares of the stock at $830. I would have a stop order in place at $830.(does not protect against gap ups). If my short call gets exercised at $840 I will have bought the stock at a lower price if possible.

Break even - buy 100 shares of stock at $881. Sell due to exercise at $840. Loss on stock equals income from selling call.
Why is this not correct?

No intention of trying to buy call to close position.

Like selling naked OTM calls/puts, should work most of the time.

Think through the logics, determine under what scenarios this doesn't work and design the next level strategy to handle those.

 

[clell888]

The start is a short naked call. If I have to it becomes a covered call. Certainly some risk having to buy the stock at some point

 

[taowave]

you need to come up with a better way to hedge......

Im guessing you are bearish on TSLA at 750

Are you a Bull at 830??

 

[PoopyDeek]

The start is a short naked call. If I have to it becomes a covered call. Certainly some risk having to buy the stock at some point

Dude, c'mon.

You're short a naked call -> shares rally -> call doubles -> buy shares (CC) and NOW you're short a synthetic put?

Brainless.

 

[taowave]

Hes hell bent on this strategy..

 

[tsznecki]

WTF are you guys all talking about? Of course it will work.

@clell888 you need to take out a 2nd mortgage and bet the house on this.

 

[clell888]

Dude, c'mon.

You're short a naked call -> shares rally -> call doubles -> buy shares (CC) and NOW you're short a synthetic put?

Brainless.

Yes a covered call is a short synthetic put.

Not hellbent on this. Would like constructive input (which some people have given)

I guess calling people brainless makes you feel good.

 

[taowave]

You have gotten extremely good advice,but you seem determined to disregard it..which is Ok...

Just trade small

Yes a covered call is a short synthetic put.

Not hellbent on this. Would like constructive input (which some people have given)

I guess calling people brainless makes you feel good.

 

[ironchef]

Yes a covered call is a short synthetic put.

Not hellbent on this. Would like constructive input (which some people have given)

I guess calling people brainless makes you feel good.

His input is very constructive:

You now own a short put with no premium received, no win, lots to lose.