Well tax implications would be definitely be one of those things. Are you selling shares that have gains or losses. How is your broker going to treat you selling TSLA shares and buying TSLA Calls when it comes to the wash sale rule
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Wiki Selling TSLA Options - Be the House
- Thread starter adiggs
- Start date
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They need to follow the playbook of introductory pricing to get users used to the software, paying for it monthly, and then hooked on it's features.
They can easily do this once V12 is wide release by doing a promo - FSD monthly subscription for $99/month for 12 months, customer must agree in contract to pay all 12 months. After 12 months, price raises to $149/month or $199/month.
EVNow
Well-Known Member
Thats not correct - with Leaps you are increasing leverage. The value is gained (and lost) faster than shares.
EVNow
Well-Known Member
If SP hits 300 at expiration, your leaps will be worth 300-250=50. Not 120.
My plan is to buy ATM LEAPS if SP comes down to $100. Those should be about $25 at that time.
How will you estimate the change of theta (time decay). Let’s say the SP reaches $300 in June 2026, the LEAPs should return far less than 3.8x factoring in time decay, right?
EVNow
Well-Known Member
Anytime you convert shares to calls (including LEAPs), you are increasing leverage i.e. you are trying to increase your % gain for same % increase of SP. This also means you will lose more money as a % if the SP goes down. Ofcourse there is the time value decay - so calls/LEAPS will slowly lose value if the SP doesn't move.
The links in the first post should give you more information.
SpeedyEddy
Active Member
yes, I keep money in cash now and wait for 145 to buy some LEAP already (on cash) and if 145 is not holding, somebody will get it to $97 or just a bit above, like last time. Then LEAPs will be the best investment for this year and $TSLA will be" the next $TSLA". For now, nobody is looking up and we're gonna get at least 1 flash-sale. Keep an eye on volume, oversoldness, besides fear&Greed below 15 + VIX going to the 20's, blood in the street and so on. not only $TSLA will go cheaper and maybe will not be the best resurrector as long as Elon's pay is not agreed upon including (non-heard of) share price- and production goals: A few of these maybe?:
1. Valuation goals: 1 trillion in 2024 10 trillion in 2030
2 Production goals: 10 million cars sold in 2030 (and intermediate goals of course for earlier tranches)
3. FSD complete including Licensing goals
4. Robotaxi deployed (including fleet-size goals)
5. Teslabot production (not sales/leases in the first 2 years as Tesla will keep 'm as own workers.
6. Dojo deployment (AIMAAS, AI-modeling as a service)
7. Energystoragegoals: Revenue will outgrow automotive (excl FSD) in year X (2030?). (50% in 2026 or so)
thenewguy1979
"The" Dog
Some Macro recovery along with AI, but TSLA is still heading south.
That Wells Fargo report is not too flattering - “growth company with no growth.”
That Wells Fargo report is not too flattering - “growth company with no growth.”
Perfection of course would be selling shares today at 162 and then buying leaps later at 130 (or whatever). But that is a highly directional position to be taking.
The rationale for the shares to leaps shift as a simultaneous transaction is that you eliminate the directionality / timing inherent in separating the two, and that you've added as much leverage as you want with the shift into leaps. You can introduce positive delta leverage, so you make much more on the way up.
The big risk I see in this choice, as I see it, is it puts one on the clock. Once you make that change you are no longer in a forever / long term position. You are on a 2 year clock for that position to pay off. Two years of going sideways or down and you made that shift too soon. I figure you need to see a big move in the first year.
EDIT to add: that low price for me to make such a shift needs to be ridiculously low. When I think the stock price is ridiculously low, that isn't low enough. I need to see random financial people on MSNBC (or wherever) talking about book value and the size of the dividend that the earnings can support (whether dividends are being paid or not) and stuff like that. Valuation on financial metrics being too low. Or a share price that is cheap pre-split or even pre-pre-split. A low price where a modest rebound will pay off particularly big through the leverage. My guess of the moment is that anything above $100 isn't that (again, for me).
That might sound like I'm negative on the move from shares to leaps, but I'm not. I'm likely to do the same if we get to a really, really low share price AND I become convinced that the company revaluation by the market is complete. Actually it'll need to be lower than that as I expect the share price to overshoot if that's what is happening.
My indicator that the revaluation is reasonably complete is when the financials oriented investors are all agreeing its a reasonable valuation. @Knightshade and @tivoboy are articulating that view of things well.
In some ways this is the curse of becoming profitable as a startup. While earnings are negative there is no PE multiple so the company is valued on future potential. Potential has a wide range of ways to be valued
Once profitability is achieved, then you get valued at least partly (and by now, mostly) on that actual profitability. This makes the green eyeshade crowd happy as there is a PE multiple to be calculated. There is a lot of money being invested by that crowd - do they jump in heavy when forward PE is more like 40? 20? A year of slowing growth and (relatively) crashing earnings can lower the share price both through lower earnings AND through lower earnings multiple. Lowing both sides of that equation can yield a really low price that is not anchored in recent history. As people that follow the company closely we need to guard against being anchored in that recent history.
Writing this out is helping me as well. When I talk about revaluation, another way of thinking about it is that the stock price stops being anchored in recent history, and goes off to find something new to anchor to. Ugh - I'm getting more short term bearish with every line I write
In my case if I purchased June '26 300 strike leaps (and I have) then I'd be looking to sell before June 2025. I'll carry them further forward than that if I need to, but I'll be getting really itchy if I still own them in June 2025 because of that time decay problem. At 6 months I'll be actively seeking an exit as there will still be significant time value remaining - it'll just be getting ready to shed faster and faster.
You don't need the share price to reach $350 or something to make money on those options - you just need it to get a move on well in advance of the expiration date.
For context, those are $86 currently. It is hard to even fathom that TSLA could go that low again however.
And I'm with you! I'll be buying a bunch of calls at that price.
I've got a mess to clean up and I'd like to see what holes people can poke in this logic I've applied.
I flip-rolled some -200/+170p put spreads expiring next week, out to -145/+175c call spreads expiring in April. Yes - DITM on one side, to DITM on the other side. I rarely roll for a debit but I did in this case. I then added some -135/+105p put spreads for the same expiration date for a small credit - about 1/2 of the debit paid on the call side.
My thinking is that I can form the other side of the IC for effectively zero risk, with the most likely outcome being that really low put spread expires worthless and gets me a small credit to help pay for the call spread, while the call spread continues being the problem that it is right now.
The best outcome is the share price drops and is between 135 and 145 expiration week, and both sides can be exited for a minimal total loss.
If the share price goes down a LOT then I've transformed that -200/+170p DITM put spread into a -135/+105 put spread that needs management from there.
If the share price rebounds from here and goes up, then I've turned a near max loss into a nearer max loss, and picked up a small credit to help offset some of that additional loss.
Thoughts?
I flip-rolled some -200/+170p put spreads expiring next week, out to -145/+175c call spreads expiring in April. Yes - DITM on one side, to DITM on the other side. I rarely roll for a debit but I did in this case. I then added some -135/+105p put spreads for the same expiration date for a small credit - about 1/2 of the debit paid on the call side.
My thinking is that I can form the other side of the IC for effectively zero risk, with the most likely outcome being that really low put spread expires worthless and gets me a small credit to help pay for the call spread, while the call spread continues being the problem that it is right now.
The best outcome is the share price drops and is between 135 and 145 expiration week, and both sides can be exited for a minimal total loss.
If the share price goes down a LOT then I've transformed that -200/+170p DITM put spread into a -135/+105 put spread that needs management from there.
If the share price rebounds from here and goes up, then I've turned a near max loss into a nearer max loss, and picked up a small credit to help offset some of that additional loss.
Thoughts?
That is a calculation of how much a Jun26 C250 would be worth today if the stock price was 300.Options Calculator - Barchart.com
Generate fair value prices and Greeks for any U.S or Canadian equity or index options contract.
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