Done and Done. I like when a video comes out about something I already did. Makes me think I am on the right track. I sold a 16d/10d put vertical in Dec for $1200 credit day of the drop and closed for $900 debit today. Took two days to hit target on the bounce back. Only regret is not trading more contracts.
Looks all good in hindsight. How could you have predicted that the stock will end within that $210 range after 3 months, specially given a highly volatile stock like TSLA?
Don’t get to crazy on why anyone would take this particular trade, TSLA, he’s using it as an example to explain how to execute an iron condor, also SMB has capital to work with. The most important advice I’ve ever gotten, and I still remind myself of it every morning, is: ⭐️Don’t risk more than you are willing to lose⭐️
I love how in every video Seth tells us to be patient as he explains how I options work. As if he knows that advanced traders get impatient. Hahaha awesome video as always Seth.
Very good content however I do recommend you elaborate the potential losses if Tesla ends up below and above the break evens, risk management and knowing how much someone may lose relative to the maximun reward ($12k) is fair to avoid someone newbi or inexperienced believing there is no risk related. Thanks for your option's videos.
Good point. When buying OTM options (which I know SMB does not like), the most you can lose is your initial investment. When selling OTM options, you can lose much, MUCH more than you were hoping to make from the premium. If one wing of your Iron Condor goes deep ITM, you typically stand to lose much more than you make in premium from the other side of it staying OTM. And with an Iron Condor, you're literally doubling your chance of losing money on one trade, since you can be wrong in either direction (assuming both wings have the same delta). TSLA is the last stock I'd ever do an Iron Condor on.
@@jheadley635 The premium of 11K gives a nice cushion. TSLA needs to push above 820 or below 590 to incur a loss. If it pushes all the way to 830 or 580 you take 11k - 20K = loss about 9K/
Seth, may I ask, why do you prefer neutral strategy 'Iron condor' while expecting decent pullback - so you've got slightly bearish bias? I'ts lowering our margin requirements, but the premium is usually not worth the risk... I've created iron condor before $PDD earnings when IV was higher, and today I'm trying to roll it in time ;( So if even beaten up stock is still under the pressure of shorts, so high-flying TSLA can cut our fingers.
This would have been a trade that was extremely risky in my book. To me the Iron Condor needs to be managed extremely well to be effective. Using trendlines or key levels as areas for "mental stops" would be extremely important, because you can easily lose a lot on this trade if all you do is hold and hope TSLA stays bound in your range.
I see from the chart that TSLA dipped below 600 around March 8th (well before expiration March 19th) and the short put could have been exercised by the seller leading to a margin call (even if it was intraday)? Some brokers would have simply closed out the 600/580 as TSLA approached 600 ?
Pls just a suggestion. Pls cut the mandatory options explaination which comes in every video that’s what throws most people away. Just put that clip as a basics of options video. Thanks
Everyone knows that TSLA is absurdly overvalued. It was overvalued before the October runup. And if you told someone in September that TSLA would rally to 1200 in a matter of weeks, on mediocre earnings, they'd laugh. And then laugh more when you told then that the price would drop by 200 points in a day because of a Twitter poll. So as far as estimating a general idea of where the price will be in 2 months, TSLA is pretty much the last stock I'd ever try that on. 2 months from now, TSLA could be at 500 or 1500, and neither would surprise me.
SMB's FREE Options Workshop smbu.com/seth
It ran to $900 and you held it? Where is the risk management on the trade. Hold and hope isn't a strategy!
Done and Done. I like when a video comes out about something I already did. Makes me think I am on the right track. I sold a 16d/10d put vertical in Dec for $1200 credit day of the drop and closed for $900 debit today. Took two days to hit target on the bounce back. Only regret is not trading more contracts.
Looks all good in hindsight. How could you have predicted that the stock will end within that $210 range after 3 months, specially given a highly volatile stock like TSLA?
Don’t get to crazy on why anyone would take this particular trade, TSLA, he’s using it as an example to explain how to execute an iron condor, also SMB has capital to work with.
The most important advice I’ve ever gotten, and I still remind myself of it every morning, is:
⭐️Don’t risk more than you are willing to lose⭐️
I love how in every video Seth tells us to be patient as he explains how I options work. As if he knows that advanced traders get impatient. Hahaha awesome video as always Seth.
Very good content however I do recommend you elaborate the potential losses if Tesla ends up below and above the break evens, risk management and knowing how much someone may lose relative to the maximun reward ($12k) is fair to avoid someone newbi or inexperienced believing there is no risk related. Thanks for your option's videos.
Good point. When buying OTM options (which I know SMB does not like), the most you can lose is your initial investment. When selling OTM options, you can lose much, MUCH more than you were hoping to make from the premium. If one wing of your Iron Condor goes deep ITM, you typically stand to lose much more than you make in premium from the other side of it staying OTM. And with an Iron Condor, you're literally doubling your chance of losing money on one trade, since you can be wrong in either direction (assuming both wings have the same delta). TSLA is the last stock I'd ever do an Iron Condor on.
@@jheadley635 The premium of 11K gives a nice cushion. TSLA needs to push above 820 or below 590 to incur a loss. If it pushes all the way to 830 or 580 you take 11k - 20K = loss about 9K/
8200. I was just estimating off my head.
Seth, may I ask, why do you prefer neutral strategy 'Iron condor' while expecting decent pullback - so you've got slightly bearish bias?
I'ts lowering our margin requirements, but the premium is usually not worth the risk... I've created iron condor before $PDD earnings when IV was higher, and today I'm trying to roll it in time ;(
So if even beaten up stock is still under the pressure of shorts, so high-flying TSLA can cut our fingers.
Powerful trade tool... definitely need to practice the Iron Condor before using with significant capital
try it out with one a small number of contracts and on a lower priced stock to get the hang of how the trade works
@@smbcapital I am on it... looking at CWD to test drive this strategy ... thanks!
This would have been a trade that was extremely risky in my book. To me the Iron Condor needs to be managed extremely well to be effective. Using trendlines or key levels as areas for "mental stops" would be extremely important, because you can easily lose a lot on this trade if all you do is hold and hope TSLA stays bound in your range.
You do not have to trade 10 contracts. Size it according to your account size and risk.
I see from the chart that TSLA dipped below 600 around March 8th (well before expiration March 19th) and the short put could have been exercised by the seller leading to a margin call (even if it was intraday)? Some brokers would have simply closed out the 600/580 as TSLA approached 600 ?
I understand now ... between the parameters! The the key!
Oh Yeah ..You got it Seth shalom my friend! 😊👍
Pls just a suggestion. Pls cut the mandatory options explaination which comes in every video that’s what throws most people away. Just put that clip as a basics of options video. Thanks
Great work
Thanks
Everyone knows that TSLA is absurdly overvalued. It was overvalued before the October runup. And if you told someone in September that TSLA would rally to 1200 in a matter of weeks, on mediocre earnings, they'd laugh. And then laugh more when you told then that the price would drop by 200 points in a day because of a Twitter poll. So as far as estimating a general idea of where the price will be in 2 months, TSLA is pretty much the last stock I'd ever try that on. 2 months from now, TSLA could be at 500 or 1500, and neither would surprise me.
Sorry for playing the bad guy here but is it really overvalued though?
"overvalued", is it though? Is it really? people have been saying that for awhile now..
@@Trippznn At 10 this morning it was. Then at 2pm it wasn't. Then at 4pm it was again. Another reason why I'd never sell an Iron Condor on this stock.