2017 Investor Roundtable: TSLA Market Action

[1kEE]

So just as a reminder EM mentioned the M3 reveal 3-4 months away. The date was November 18th. That could be as early as Feb.

Silly ideas, not something I'm gambling on, but since ER is later this month, that would be a great time to announce the reveal date. Now if reveal happened by surprise during ER.... that could be fun.

 

[GoTslaGo]

Here is another confirmation that TSLA short interest is north of 40M shares. Looks like we will have a little more detail on Monday...

View attachment 213247

View attachment 213248

Wow. And, um, holy *sugar*

Hmmm,

and decreasing volumes recently should increase the days to cover....

TSLA Stock Quote | Tesla Motors Inc Stock Price (NASDAQ:TSLA) | Nasdaq: TSLA | 4-Traders

01/30/2017.....01/31/2017.....02/01/2017.....02/02/2017....02/03/2017....Date
250.63(c)........251.93(c)........249.24(c)........251.55(c).......251.33(c)......Last
3,801,074........4,116,104.......3,958,829.......2,499,775......2,023,625.....Volume

Interesting times...

 

[techmaven]

I think plenty of money went to play the AAPL ER and TSLA looked less interesting last week. And probably quite a bit of that money for pulled out of AAPL and will look for new places next week. Rally can resume of the Trump administration does not have another weekend like last weekend. Still, I am thinking we are due for some... correction, but who knows when that will be...

 

[ggr]

Wow. And, um, holy *sugar*

Yeah. 40M shares is a touch over $10Billion! Pretty close to 1/4 of the market capitalization.

 

[Hogfighter]

Yeah. 40M shares is a touch over $10Billion! Pretty close to 1/4 of the market capitalization.

That's quite a few shares shorted, for sure. This stock will be heavily shorted until, as Elon put it, 'they can't help but be profitable'. He said that should occur around 2020, but that was before the GF and 3 timelines were moved up 2 years. My hope is that occurs in 2018.

 

[Nate the Great]

@1kEE

I agree with that being said the dates may line up with the last Q4 ER 2015. The M3 first reveal was announced during a Q&A with Tesla owners in France.

2016-01-30

EM:
"The first pictures of the Model 3 will be end of March… I am being a little coy here, we are not gonna show everything about the Model 3 until a lot closer to production time.”

The last time he stated M3 reveal at the end of March, it happened.

During the shareholder meeting for the SCTY merger vote , he was asked about M3 reveal and he mentioned 3-4 months.

2016-11-18

EM:
“Today is not the time for that announcement. Uh but I mean it’s probably, yeah, I don’t know, um, beginning of spring, or something. Yeah – 3-4 months from now.”

If they planned on doing another cap raise the next reveal would be ideal.

I would like to think that he will repeat himself. The second reveal may or may not have the same sizzle as the first.

I'm semi long on my positions, no leverage with occasional day trades or options (weeklies) if it feels right. I feel like EM has gotten much better at understating things.

Time will tell.

 

[MitchJi]

Hmmm, I'm still trying to understand this.... And the "call - sell to open" order never executed, so this is theoretical only.

Selling Feb10-270 calls is basically placing a bet that the stock price won't be over 270 by next Friday... and getting paid mouse nuts ($740 for 2000 shares worth) for taking that gamble.

On one hand, $740 isn't much when you're talking 2k shares. On the other hand, a 20 point move next week is unlikely, a 20+ move less so.

I was saying:
1. That that strategy has a small chance of losing a lot and zero chance of making a substantial gain.

2. I don't personally like that.

3. That you should at least be aware of the unlikely possibility of losing a lot.

4. If I was doing that I'd cap my potential losses by having a stop-loss order.

I've been selling covered calls for over a little more than a year for now. The calls I sold are mostly weeklies at about 5%-10% higher strike price above current trading price, resulting in around $0.7-1.0 per contract. Depending how the stock m,,oves, I think I averaged doing this kind of trade two to three times a month. Most of the time I got 100% of the premium. A few times covered with 80%+ profits. Only once I lost and quite big time was mid Dec 2016 when my strike price was 197.5 and it closed the week at 202.49...

One thing to consider is that TSLA has been mostly going nowhere for the last two years. Strategies that depend on selling calls won't always be as easy to use successfully. By 2019 I expect TSLA's SP to be $325-$450. A question you should ask yourself is how and when do you think it's going to get there. Some of us think that it's think that a major rise might be imminent.

 

[Fallenone]

One thing to consider is that TSLA has been mostly going nowhere for the last two years. Strategies that depend on sellers calls won't always be as easy to use successfully. By 2019 I expect TSLA's SP to be $325-$450. A question you should ask yourself is how and when do you think it's going to get there. Jesse for example thinks a major rise could be imminent.

Of course selling calls not always work. But until SP makes serious attempts of breaking 300, which there's no sign/confirmation of it either technically or fundamentally in a quarter or two IMO, I think its still safe. I'll probably buy short term calls when that time comes.

 

[Ovulation]

Of course selling calls not always work. But until SP makes serious attempts of breaking 300, which there's no sign/confirmation of it either technically or fundamentally in a quarter or two IMO, I think its still safe. I'll probably buy short term calls when that time comes.

I personally expect the SP to really run again when the model 3 sells in significant numbers with a good margin, my guess is Q1 2018 or Q2 ... I'm a long in all my investments, I found it very hard to toying short term with the SP, I think the bots are better at it.

 

[1kEE]

3. That you should at least be aware of the unlikely possibility of losing a lot.

@MitchJi

I appreciate the advise, and enjoy hearing alternate angles on the subject....

I see the "failure to realize a profit" different from "loosing a lot"...

The 2k shares I was planning on writing calls on were intended as short term trading material that, if sold for 270 in a week, would have "done their job" in my mind.... yes if the SP was 280 I'd be a little disappointed by missing out on that gain but it wouldn't bother me much... the long term position is still there.

Edit: I have short, medium and long term strategies going in paralllel....

This is part of a short term strategy that started during our run up and involved day-week long holding periods in an effort to buy dips and sell peaks. After the run up subsided, I found myself sitting on some shares with a cost basis around 255 that I'd like to put to good use while the week of sideways action turns into two weeks... Not interested in selling the shares at a loss, but sticking to my strategy of this being a short term buy dips sell peaks, well the next little peak those shares get sold.

 

[AlMc]

Tesla going to UAE: Musk to attend opening on Feb 13th?

Tesla is officially launching in the United Arab Emirates this month starting with service center in Dubai

 

[Hogfighter]

Of course selling calls not always work. But until SP makes serious attempts of breaking 300, which there's no sign/confirmation of it either technically or fundamentally in a quarter or two IMO, I think its still safe. I'll probably buy short term calls when that time comes.

Another strategy is to hold 30% of your TSLA holdings in Jan 19 LEAPs ATM, then hold 70% in stock while writing weekly OTM calls against those shares. You don't miss out on big gains, but also make a tidy amount weekly waiting for those gains.

You only lose if the stock tanks, which of course plenty of investors are counting on with 40 million short

 

[1kEE]

Another strategy is to hold 30% of your TSLA holdings in Jan 19 LEAPs ATM, then hold 70% in stock while writing weekly OTM calls against those shares. You don't miss out on big gains, but also make a tidy amount weekly waiting for those gains.

Ok, that's an interesting strategy.... you're loosing (paying for) Time Value on the LEAPS and making it up by selling calls on the stock.

My position is similar to that but heavier on the stock, only like 5% LEAPS, and a bunch of medium term ITM calls (Mar and Jun).

Another strategy I came up with for a flat to slightly up market (and only that specific case): buy medium term deep ITM calls on dips, sell those on peaks. Sell weekly 10-15% OTM calls on peaks, hope they expire worthless.... buy to cover if dynamics change. I may play with that next week mostly for fun and practice.

 

[Fallenone]

Another strategy is to hold 30% of your TSLA holdings in Jan 19 LEAPs ATM, then hold 70% in stock while writing weekly OTM calls against those shares. You don't miss out on big gains, but also make a tidy amount weekly waiting for those gains.

You only lose if the stock tanks, which of course plenty of investors are counting on with 40 million short

Yeh that's definetly a good strat. Actually I bought some Jan 17 300 LEAPS in 15. Needless to say, 100% loss. But the loss was more than covered by the weekly OTM calls I've been selling.

 

[Hogfighter]

Ok, that's an interesting strategy.... you're loosing (paying for) Time Value on the LEAPS and making it up by selling calls on the stock.

True....but the time value decay on LEAPS expiring 2 years out is miniscule compared to weekly calls.

 

[vgrinshpun]

There were 204k shares available for shorting this morning at fidelity, largest quantity in last three weeks. Interest steady at 2.0%, 103k shares were borrowed in pre-market, at least 92k were added to the shares available for shorting by Fidelity after 8:00am.

 

[1kEE]

Last week's resistance at 252 got wiped out nicely and we're back to having some volume!

And MitchJi will be mad at me... I sold Feb10-270 calls. If stock goes >270 by Fri, you know who to thank for that LOL.

Edit: I do agree that the sold calls can create some tense moments through the week if SP jumps up.... be crazy to see the cost to "buy to close" jump up by thousands on something that paid off $700....

 

[MitchJi]

I've been thinking about the SP and the M3 production.

I believe that for the Q4 ER that the only news that would have a material impact would be bad news, which I think is unlikely.

But I think that on the Q1 ER in May is close enough to the July first supplier deadline that positive guidance or optimistic projections would have a positive effect.

I have a question. If at some point I believe that a market crash is imminent, and I want to buy puts on the market what's available? Index funds on the Dow or the S and P 500?


And MitchJi will be mad at me... I sold Feb10-270 calls. If stock goes >270 by Fri, you know who to thank for that LOL.

Mad at you!? I want you to do well!

 

[racer26]

Ugh. Still torn on what to do with my Feb10@260 Calls.

Bought them last week expecting a pop on Wednesday that never came, and now they're underwater to the tune of around 50%.

Don't really want to hold them beyond today, as theta decay is gonna kill me.

 

[1kEE]

I've been thinking about the SP and the M3 production.

I believe that for the Q4 ER that the only news that would have a material impact would be bad news, which I think is unlikely.

But I think that on the Q1 ER in May is close enough to the July first supplier deadline that positive guidance or optimistic projections would have a positive effect.

Be interesting to see how much info on M3 status EM reveals during 16Q4 ER.... I bet there will be a lot of questions about status of presses, production lines, etc. during the Q&A.

I have been slowly accumulating 200ish strike Mar and Jun calls....