2017 Investor Roundtable: TSLA Market Action

[TrendTrader007]

I also have concentrated TSLA position at Fidelity, but it must be much less concentrated than yours as my margin requirement is 40%.

Well I wish I had 40% margin requirement. Probably because TSLA is my single position
Pretty soon I'll move my account from Fidelity. They don't deserve my money since I have to pay 4% margin interest on a margin balance of well over a million which alone costs me something like $120+ margin interest every single day and on top of that they keep on hitting me with margin calls with their ridiculous 80% margin requirement. I've lost more money liquidating my stock over the last several years then I would have lost if they had better margin requirements for me so all in all I'm tired of that Brokerage and I really don't care about their five dollar commission I will more than make up for that with a lower margin interest rate and a better margin requirement. Good riddance

 

[vgrinshpun]

Well I wish I had 40% margin requirement. Probably because TSLA is my single position

If that is the differentiator between the 40% and 80% margin requirement, may be it is worth to have a token position in something else (say 10%) to trigger margin requirement to go from 80% to 40%. I would just call Fidelity Active Trader services and question them about this - they should be able to tell what would trigger lowering of the margin requirements...

 

[TrendTrader007]

If that is the differentiator between the 40% and 80% margin requirement, may be it is worth to have a token position in something else (say 10%) to trigger margin requirement to go from 80% to 40%. I would just call Fidelity Active Trader services and question them about this - they should be able to tell what would trigger lowering of the margin requirements...

Sounds good thanks

 

[TrendTrader007]

I cannot believe that I have to actually explain this but I guess I will:
Always buy high because A stock that is making a new high is likely to keep on making new highs and go higher
Always sell low means that you get out of your position when A stock is hitting a new all time low or you sell short because a stock that is making a new low is likely to keep on going lower
I really should not have to explain this it is painful because this is investing 101 if you do not understand this then you have no reason to be in the stock market
I'm sorry I'm not trying to be difficult here but it does not take a genius to know that there is a good reason why stocks make new all-time highs and there's a very good reason why A stock makes the new all time low all you have to do is look at the chart of VRX it kept on hitting new all-time lows and kept on going lower and lower until bill Ackman lost a fortune the reverse is true for a stocks that keep on hitting new all-time highs for example Amazon and Netflix

 

[TrendTrader007]

I'm severely tempted to buy more Tesla at the open right here I don't know if I will but I'm severely tempted

 

[dw4ngg]

I'm severely tempted to buy more Tesla at the open right here I don't know if I will but I'm severely tempted

Put your adult pants on and chill. You will make more than enough money. If you love risk so much, stop buying shares and buy out of money short term options for chump change. That should satiate your desires

Alternatively, we can go to Vegas and just play baccarat.

 

[TrendTrader007]

$300 could become the new floor
$TSLA intraday the stock could easily pull back to about $297 to $298

 

[TrendTrader007]

Put your adult pants on and chill. You will make more than enough money. If you love risk so much, stop buying shares and buy out of money short term options for chump change. That should satiate your desires

Thanks bud! I needed to hear that

 

[neroden]

EDIT: Or maybe I reread your comment better @vgrinshpun, and we're in violent agreement

Thanks for explaining all of this. Since I've never actually done short-selling, I didn't know this detail. So the short-seller has to keep 102% - 105% (depending on brokerage) in *cash* and a total of 130% - 150% (depending on brokerage) in cash + securities. The brokerage is sure protecting itself! This is pretty harsh. As the stock goes up, to hold the short position, the short has to liquidate other securities into cash, and simultaneously dedicate more securities to cover the increasing margin requirements.

 

[neroden]

CNBC throwing all the big guns in today

Cramer explains why valuation is not the end-all for individual stocks

I don't normally listen to Cramer, and I don't like his style, but this is actually a more-or-less accurate analysis.

 

[Yggdrasill]

I cannot believe that I have to actually explain this but I guess I will:
Always buy high because A stock that is making a new high is likely to keep on making new highs and go higher
Always sell low means that you get out of your position when A stock is hitting a new all time low or you sell short because a stock that is making a new low is likely to keep on going lower
I really should not have to explain this it is painful because this is investing 101 if you do not understand this then you have no reason to be in the stock market
I'm sorry I'm not trying to be difficult here but it does not take a genius to know that there is a good reason why stocks make new all-time highs and there's a very good reason why A stock makes the new all time low all you have to do is look at the chart of VRX it kept on hitting new all-time lows and kept on going lower and lower until bill Ackman lost a fortune the reverse is true for a stocks that keep on hitting new all-time highs for example Amazon and Netflix

There are different ways of investing.

I only invest in companies I believe in. TSLA is a steal at 200, and it was even more of a steal at 140. So last year, I gradually bought more and more as TSLA fell more and more. And I certainly don't regret doubling my position in the 200-145 range. The shares I bought at 145 has doubled already. If you want to double your money when it comes to the shares you've bought at 300, you need to wait until TSLA is at 600. And by then, I will have quadrupled my money.

 

[neroden]

Well I wish I had 40% margin requirement. Probably because TSLA is my single position
Pretty soon I'll move my account from Fidelity. They don't deserve my money since I have to pay 4% margin interest on a margin balance of well over a million which alone costs me something like $120+ margin interest every single day and on top of that they keep on hitting me with margin calls with their ridiculous 80% margin requirement.

Sooo, different brokerages cater to different types of clients. Fidelity is not catering to clients like you.

I'm a zero-margin, no-shorting, buy-and-hold, minimize-fees investor; Fidelity and Schwab are both catering to clients like me. (I even "sell-and-hold" with my short options, which I often let expire.)

You're a gambler, and there are other brokerages which are catering much more to you. I couldn't tell you what they are, because I've never *looked* for them, but you probably would be happy with a different sort of brokerage. Do your research, you will probably (eventually) find one which caters to people with high use of margin and concentrated positions... you might have to pledge your house as backstop collateral or something, but you'll probably find one...

In the meantime, the advice to call Fidelity Active Trader and find out what you have to to do get better margin requirements is also good advice. (Since switching brokerages is slow.)

I've lost more money liquidating my stock over the last several years then I would have lost if they had better margin requirements for me so all in all I'm tired of that Brokerage and I really don't care about their five dollar commission I will more than make up for that with a lower margin interest rate and a better margin requirement. Good riddance

 

[Hogfighter]

Well I wish I had 40% margin requirement. Probably because TSLA is my single position
Pretty soon I'll move my account from Fidelity. They don't deserve my money since I have to pay 4% margin interest on a margin balance of well over a million which alone costs me something like $120+ margin interest every single day and on top of that they keep on hitting me with margin calls with their ridiculous 80% margin requirement. I've lost more money liquidating my stock over the last several years then I would have lost if they had better margin requirements for me so all in all I'm tired of that Brokerage and I really don't care about their five dollar commission I will more than make up for that with a lower margin interest rate and a better margin requirement. Good riddance

I do like their share loan program however.....

 

[JRP3]

There are different ways of investing.

I only invest in companies I believe in. TSLA is a steal at 200, and it was even more of a steal at 140. So last year, I gradually bought more and more as TSLA fell more and more. And I certainly don't regret doubling my position in the 200-145 range. The shares I bought at 145 has doubled already. If you want to double your money when it comes to the shares you've bought at 300, you need to wait until TSLA is at 600. And by then, I will have quadrupled my money.

Seriously. TT is trying to convince us, (or maybe himself), that buying at 300 is better than buying at 140

 

[BornToFly]

There are different ways of investing.

I only invest in companies I believe in. TSLA is a steal at 200, and it was even more of a steal at 140. So last year, I gradually bought more and more as TSLA fell more and more. And I certainly don't regret doubling my position in the 200-145 range. The shares I bought at 145 has doubled already. If you want to double your money when it comes to the shares you've bought at 300, you need to wait until TSLA is at 600. And by then, I will have quadrupled my money.

I agree. Sorry 007, I was just trying to be funny with my buy high, sell low joke. I understand that ATHs are different. However, with Tesla I have been going off fundamentals, not charts. When it was at 200, I had 100% confidence that it would hit 300 eventually, because I believe in Elon and Tesla, and I have watched Tesla just get stronger over the last 2 years with no change in the stock price. The spring was being compressed. I believe that with energy storage and battery backup, Tesla will be worth at least 10X what it is today. So buying stock at 180 or 200 after a couple years of consolidation was a no brainer. Waiting for ATH to buy just meant losing almost 50% of potential gains.

 

[winfield100]

(I even "sell-and-hold" with my short options, which I often let expire.)

Is the above selling a covered call that expires so your 100 share lot doesnt get called away? with short term time frame expiry? so i could get "easy money" to DCA a share or 2 and create another "uptick"
uptick created
Bought 1 @ $302.1416 @ 9:37 AM 04/05/2017

 

[vgrinshpun]

Today Fidelity doubled the shares available in premarket, and quantity of shares borrowed (as revealed by snap shots) was almost double of the yesterday's:

 

[neroden]

Is the above selling a covered call that expires so your 100 share lot doesnt get called away?

I do that on other stocks. I don't risk covered calls on Tesla, because I don't want to risk getting shares called away if the stock skyrockets.

What I do is absolutely symmetrical to covered calls: I sell out-of-the-money puts, secured by my cash, with the "risk" being that if TSLA falls I have to buy TSLA cheap. Better for me than putting the cash in CDs. It's typically more profitable to buy-to-close the position early, as Jonathan Hewitt will tell you, but honestly, I often don't (for instance, if I'm busy that week). This style works for me because any day I have other things to do and can't pay attention -- which happens a lot, my family has medical issues which can eat up a week at a time sometimes -- I'm fine, I don't have to worry about closing the position.

 

[Gerasimental]

Interesting early test to see if $300 can establish itself as a price floor. If not, the next level down will be old ATH.

 

[Bobbyducati]

just got burned big on that drop. i think itll come back shortly though. i really need to stop trading during amateur hour.