TLRY Options

Discussion in 'Options' started by FSU, Sep 12, 2018.

  1. elt894

    elt894

    It looks like the 65 and 70 calls are at intrinsic value, so you're not losing anything by exercising them. You're pretty much certain to get assigned in the next few days.

    If the stock declines enough the calls will start trading above intrinsic value. To get a sense of how big a decline you need, just look at how high up the ladder the strikes are still trading at intrinsic value (assuming vol is unchanged through the decline).

    Vol dropping will help your short puts.
     
    #11     Sep 15, 2018
    FSU likes this.
  2. qwerty156

    qwerty156

    @elt894 and @FSU

    Ended up getting assigned on the deep ITM short calls this morning as y'all had predicted. My broker (RobinHood) allowed me to exercise the closer to strike calls to offset the margin call. Apart from a margin call scare, no harm done.

    As for the trade, I lost about ~$400 to bad execution, and will get most of it back on my short puts as the stock has ripped higher, althought my gains on the short puts are dissapointing tbh, as IV has also continued to increase (currently above 205% for the 100 puts!!).

    Might roll into higher strikes and re-establish my position once the margin call clears.
     
    #12     Sep 18, 2018
  3. Thats the issue the IV put is totally out of kilter and making it quite dangerous to hold the short side on any of these trades.
     
    #13     Sep 18, 2018
  4. qwerty156

    qwerty156

    Yeah, that was part of the trade - short the ultra high IV puts and hedge with bear call credit spreads. Just a little unsetlling to wake up to a 60k margin call on a 9k account. Might give it another shot with higher strike calls with some extrinsic value left.
     
    #14     Sep 18, 2018
  5. I would not recommend it - following other sites almost all the people that went for it got burned.
     
    #15     Sep 18, 2018
  6. qwerty156

    qwerty156

    Apart from the risk of getting assigned the call if it goes too deep ITM, what else is the risk on this? As I understand it, I have a limited risk on credit call spreads
     
    #16     Sep 18, 2018
  7. you got a 60k margin call doing the exact same thing yesterday, yeah?
     
    #17     Sep 19, 2018
    Reformed Trader likes this.
  8. #18     Sep 19, 2018
  9. Just running to the airport so only a short remark, those who got burned mainly had the call side assigned against them. One guy reported it cost 5000$ to carry one weekend 3200 short shares given the crazy borrowing rates. You are then left with the put side where the extrinsic values are way out of kilter and which you need to hold to expiration because if you liquidate it you will pay more than the value of the width. This effectively leaves you holding a put spread even if you got out of the call spread (for example by exercising your own). The putspread has a different risk profile than an iron fly.
     
    #19     Sep 19, 2018
  10. qwerty156

    qwerty156

    Fair enough, a weekend exercise would have ruined my weekend. Whats the risk of getting called on calls which are closer to ITM (say shorting ~20% below calls) and rolling onto higher strikes as it keeps moving up? The spreads are pretty high on this to trade often though, especially with so many legs.
     
    #20     Sep 19, 2018