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2017 Investor Roundtable: TSLA Market Action

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bdy0627

Active Member
May 19, 2015
3,505
12,087
Appleton, WI
If you shift substantial portions of your portfolio based on “having a pretty good idea” it will probably bite you eventually. That applies to both decreasing the time remaining and to increasing the strike prices. I bought a lot of J18’s $220’s when the SP was $160 and $170. When Tesla announced that they were pulling the M3 production ahead and the SP decreased I thought that was backwards. How could they possibly miss it badly enough to be in worse shape than not trying? So I rolled my $220’s to $280’s. Before I did that I considered all of the potential catalysts and thought that “the SP will probably go up by the spring of 2017”. Huge mistake! I could have easily gotten out of the $220’s profitably for most of the time I held them. So please be careful increasing your leverage on options to try to capture more money based on short term trading. I decided that my big mistake was doing that based on thinking that the SP would probably increase”. Now I believe that I should not even purchase more than a small lottery ticket play with options unless I am extremely confident that they will increase in value enough to make a substantial profit well before they expire.

Before you change your option strategy please ask yourself two questions:
1. Are you completely confident that the SP will increase enough 3-8 months before they expire to make this strategy profitable?

2. If you are so confident what has changed to increase your confidence that the options will be profitable before they expire? I said changed because if you were that confident why didn’t you have that additional leverage before?
I appreciate your thoughts here. I'm confused about your experience though. You said you rolled your $220s to $280s anticipating a rebound by spring 2017. We sure did get quite the rebound and then some by spring 2017. Your $280s would have been extremely profitable by then. What am I missing? What actually happened?

I'm certainly appreciating the conservative approach with TSLA the more experience I get with it. It's just such a completely unpredictable ride in the short and even medium term. To think I can just predict it will be much higher in a few months, so why not load up on June calls, is pretty naive. Much better to be conservative and go longer term than you think you need to. That's what I thought I was doing with the June calls. I have been very tempted by the March and April calls, and even picked up a small amount of those. The June timeframe seemed as close to a certainty as you can get. But, it's not that easy. That's really not conservative enough with TSLA.

With the calls, I use the option calculator to see where they will be priced based upon a projected share price at a given future point in time. I create a spreadsheet with lots of different options and analyze them. They can still be very profitable even within 3 months of expiration. For calculations, I've been going with what I thought were reasonably conservative price points, such as $360 and $380, at various points such as mid December, mid January, mid February, etc... From there, I pick the call and strike price that looks the most balanced in terms of profit and some protection from things not playing out the way I expect. Clearly, there is much more risk and potential reward to this approach than DITM long term LEAPs. It's not for everyone, especially those who are retired. I'm still relatively young with a high income, so I'm more accepting of risk than some others for sure. But, this may not turn out to be a smart approach come spring 2018. Thanks for the warning!
 

Irishjugg

Member
May 15, 2015
707
1,756
Chicago, IL
understood... but think about what those bond purchasers were told during the dog-and-pony show just 3 months ago... do you think this is what they had in mind for their 90 days later?
If they didn't take any time to learn about the company, the way it's CEO is extremely well known for overly optimistic projections, and the high likelihood of schedule slips on the way to eventually meeting all planned volumes then I don't feel sorry for them.

Bond investors like these aren't mom and pops. This board has been overly optimistic but plenty here like myself have held off buying because we expected ramp issues. This isn't surprising.

So I guess my answer is, if they were good then I do think it's what they had in mind. I also don't think they are even the slightest bit worried about their investment going bad.
 

Curt Renz

Well-Known Member
Mar 5, 2013
6,501
84,162
USA
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elasalle

driVIN(188xx) it !!
Jan 26, 2016
4,121
22,106
VA
Well.. last time I picked up shares was around $170; at the start of 2016. Nobody was expecting it to go that low back then. I remember that time as the SP kept dropping day after day.

I still hold these shares (buy and hold).

Just make sure to buy before the Semi release event ...
 
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stealthology

Member
Jan 24, 2013
467
642
Hawaii
How big of an impact will an immediate end to the $7,500 tax credit make on Tesla sales (S, X, 3)? Definitely didn't think we'd encounter this..
 

ggies07

Supporting Member
Nov 8, 2012
3,830
7,040
Ft. Worth, TX
How big of an impact will an immediate end to the $7,500 tax credit make on Tesla sales (S, X, 3)? Definitely didn't think we'd encounter this..
So IF this happens, let's see:

EPA shift to reduce science lead thinking
Trump's Coal prop-up
Trump's possible import tariffs on solar panels
GOP takes EV tax credit away

Hmmm.......I wonder what could be going on here.........
 
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Zhelko Dimic

Careful bull
Jan 17, 2016
1,542
7,064
Toronto, Canada
Maybe the new dash makes a RHD model easier...(no second screen to install?)
Trying to estimate delays and cross-check them against words of Tesla execs are silly attempts.
People programming estimate algorithms are much further from the source of info than Tesla execs, and of you think communication channels are so efficient that this information is up-to-date, you haven't seen guts of any large company operations.

I'd believe in what execs said, not what junior/mid-level developer programmed in the estimator
 
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Zhelko Dimic

Careful bull
Jan 17, 2016
1,542
7,064
Toronto, Canada
Ya think? The reality is that Tesla may double total unit production in 2018 YOY. That's pretty good for a manufacturing company. Repeat that in 2019.

The problem is that this growth doesn't work for SP or any rational evaluation of ROI. So its time to shift gears and talk about Tesla's lead in autonomous driving.

I going optimistic and predicting that Tesla will sell 250,000 total vehicles in 2018. They will need to have some good luck to pull it off.
Agreed with 250K, maybe a touch more, maybe a touch less if they screw up. That's ok.
I bought first time with the premise of 500K in 2020.
Everything else is gravy, and I think they'll do better than 500K in 2020. Maybe not 1M, but somewhere in between
 
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