I made some serious mistakes with the usual suspects like TSLA, BIDU, NFLX, AAPL and the usual suspects. I failed to sell and take the loss before these credit spreads went to ATM/ITM. A very bad mistake. I naively thought I could do a Iron Condor or sell credit on the other side to bring in credit to pay for a roll back. So if my Bull Put Spread on APPL, TSLA, REGN, Z, GOOG, GMCR and NFLX went ITM, I could roll the weekly spread out and put on a Bear Call Spread so I would lose a little money on the roll of the ITM position. So the roll might cost $1.00 and I might bring in 0.85 credit on the other side. This is obviously a flawed strategy that does not work. AKA it is slow death. I underestimated the risks of options spreads and violated Rule #1: NEVER let your spread get ITM. Hopefully, new people will be very very careful with options because you can get destroyed very quickly. I have been adding more money trying to stay ahead of the tiger eating me. Unfortunately, I have quite a few spreads on - some pushed out for a few weeks. Mainly Bull Put spreads. I have limited buying power where I close out the other side for 0.02 then roll the ITM and sell another spread on the other side for an IC. The only thing I can think of is keep trying to roll out, put on spread on the other side or make it an IC (sell credit on the other side) and to take the hit and close 10 to 20% of the ITMs each week. The goal would be to try to work out of this nightmare for a smaller loss. Any other suggestions? Thanks for any help. New people - be very careful. You can destroy yourself very easily. This is not as easy as the gurus tell you it is. Thanks.
You've gotten greedy here. Yes, TSLA et al have some pretty juicy premium just begging to be sold. But always wonder if perhaps the market is pricing those OTM options at a high price for good reason. What's the key? Kurtosis. High vol-of-vol. Means the stock can go from treading water in a very small range to exploding into the tails in a heartbeat. Any good spread is based off of developing some type of reasonable thesis regarding volatility. Absolute premium values are virtually meaningless. And believing you will have time to make measured adjustments to short gamma/vega is a naive belief I think every new trader has. It doesn't work. Those stocks you named aren't just taking a leisurely, aimless random walk. They're hardcore jump diffusive. You're basically a guy saying, "Dont worry....I'll see the tornado on the horizon and have plenty of time to build my storm shelter." Quite simply, your trading is suffering due to poor trade selection. Look at some different names or even indexes. Only sell vol if you can at least form some type of opinion as to why it is a good sale.