2017 Investor Roundtable: TSLA Market Action

[brian45011]

Interesting. Looks like there are billions riding on call options over the next eight months.

How does this inform for use in trading of information posted here daily/frequently about Fidelity's shares available to short and hard-to-borrow fees?

 

[brian45011]

I just posted this in trading strategies but since we are on the topic of max pain - is this of any use: max pain for all expiry dates:

View attachment 223749

Thank you! Do you have a useful link for deriving that graph, since option open interest on many of the contracts changes dynamically, often daily particularly for the nearer term strikes?

Shouldn't there be an indication of dis-continuity between the '18 and ' 19 LEAPS?

 

[Starno]

It's already been 2 weeks since the SP is oscillating between 300-305.
Would be time some investors grow some balls ...

 

[Waiting4M3]

Has 007 backed up the truck this last hour?

Which truck? Tesla semi or the pickup? Knowing 007 I bet it's the semi

 

[techmaven]

So... I'm still afraid of the market reaction to the French elections this weekend. Otherwise, I'd be more aggressive about buying this dip. I still might, depending on the shape of the charts tomorrow. Unfortunately, this temporary sale still didn't put much of a dent in May and beyond options pricing if one is looking to accumulate (more).

Apparently just a whiff of major tax reform helped the markets greatly, but I'm afraid that this upturn is either a relief rally or on vapor which is easily reversible.

 

[CALGARYARSENAL]

So... I'm still afraid of the market reaction to the French elections this weekend. Otherwise, I'd be more aggressive about buying this dip. I still might, depending on the shape of the charts tomorrow. Unfortunately, this temporary sale still didn't put much of a dent in May and beyond options pricing if one is looking to accumulate (more).

Apparently just a whiff of major tax reform helped the markets greatly, but I'm afraid that this upturn is either a relief rally or on vapor which is easily reversible.

I think the French Election is the last of the worries. Marine Lepen wins? Stocks rally.

 

[CALGARYARSENAL]

Which truck? Tesla semi or the pickup? Knowing 007 I bet it's the semi

LMAO!

 

[Starno]

I think the French Election is the last of the worries. Marine Lepen wins? Stocks rally.

Marine Lepen isn't Donald Trump economic wise.... quite the contrary.
Marine Lepen means Frexit, which means end of the Euro zone. Because until now only Germany and France are supporting it. And Germany will never accept to take the burden alone.
So end of Euro zone.

Which means huge consequences worldwide.

 

[AudubonB]

Moderator Note:

I have created a platform for discussing Neuralink; at present it sits in the Off Topic sector. Presumably it will some day have its own "anchored" site. Please contribute your thoughts there: The Neuralink Master Thread

 

[Papafox]

I understand today's dip happened when Tesla announced a voluntary recall of 53,000 vehicles. When the company let on that this voluntary recall should not affect financials because a 3rd party manufacturer of the part was paying for the recall, the stock recovered significantly. Since then, we've seen a couple dips down, followed by partial recoveries. The question is: who's selling to create these aftershocks? One explanation is the market makers appeared on Tuesday to be driving the stock toward 300 for week's end but couldn't hold the stock back from climbing on Wednesday. I'm rather inclined to believe they're behind the selling, taking advantage of this dip to moderate TSLA's gains prior to Friday's close. Shorts don't seem to be drawing down enough shares to make a difference, unless data shows otherwise.

I'm going to change my opinion somewhat here. Although the market makers have the ability and the incentive to keep TSLA depressed this afternoon, I'm now thinking that the way the media handled the recall information is also at work here. Plenty of investors unfortunately will react to CNBC, rather than take 5 minutes to google the issue and arrive at a reasonable perspective.

 

[jeewee3000]

Marine Lepen isn't Donald Trump economic wise.... quite the contrary.
Marine Lepen means Frexit, which means end of the Euro zone. Because until now only Germany and France are supporting it. And Germany will never accept to take the burden alone.
So end of Euro zone.

Which means huge consequences worldwide.

There are quite a few errors in this reasoning. Just to name a few:

- not ONLY Germany and France support the Euro. Belgium, Luxemburg, Spain, ... all strong supporters.
- the Euro zone is not doomed (yet), the European Union may be. But that is a different matter. European Union is "Europe Mk II" after the EEG and EGKS treaties of 1958. Academics and European Politicians are predicting a third generation "European Treaty" that would again reboot Europe, this time learning from mistakes and only allowing very few but loyal nations in the club, and expanding very slowly. This would create a new competitive market and would lean more and more to the system of the US.
- Frexit would not mean they go back to France Francs. Unlike Britain, France has enrolled in the Euro system and it would be economically disastrous to just throw that away. This would harm French export substantially.
- Brexit was unprecedented. Thinking a Frexit would be just as easy is following a wrong analogy, as there are a lot of differences between France's situation in the EU compared to the (previous) situation of the UK. Many French citizens support EU too much for wanting to leave it.
-...

Topic relevance: end of EU would affect EU and US stock markets, so TSLA Frankfurt and Nasdaq would drop. But I'm not too worried about the French election. I am saying this as a citizen of the neigbouring country of Belgium.

 

[ValueAnalyst]

Oh, no. It's about the options markets. Nothing to do with the company at all, really.

Max Pain | Maximum-Pain.com

Here's the theory. Options market makers are *imbalanced*. They sell more options than they buy. So they're net options sellers. This means that when options expire "in the money", the options market makers typically lose money. You can add up all the outstanding options and figure out, *if the market makers only sold options and didn't buy any*, what price they'd be happiest with at expiration.

Now, this is going to be wrong, because it doesn't tell you how many people other than market makers are selling options -- for instance, anyone who sells covered calls or cash-secured equity puts. (Also more complicated spreads.) But it gives a rough approximation. And *particularly* when there are a whole lot of options outstanding and they amount to a whole lot of money and the expiration date is coming up really soon, the market makers can have an incentive to keep the stock price near a particular price to make more options expire.

(This incentive is obviously strongest on Fridays, when options expire at market close, and weakest on Mondays.)

Thanks. OpEx = options expiration in this context. Sorry, I should've clarified.

 

[ValueAnalyst]

I just posted this in trading strategies but since we are on the topic of max pain - is this of any use: max pain for all expiry dates:

View attachment 223749

I think this is useful to a certain point.

I don't see how this stock can be priced less than $300 if Tesla delivers 500k cars in 2018 going onto 1m cars in 2020 along with "superexponential" growth in Tesla Energy.

$35 billion revenue in 2018, going onto $70 billion in 2020 (my base case assumes $200 billion in 2020/21) with 20-25% gross margins would value the company at $150+ billion enterprise value at a minimum.

Good luck keeping the stock to "max pain!"

 

[Starno]

There are quite a few errors in this reasoning. Just to name a few:

- not ONLY Germany and France support the Euro. Belgium, Luxemburg, Spain, ... all strong supporters.
- the Euro zone is not doomed (yet), the European Union may be. But that is a different matter. European Union is "Europe Mk II" after the EEG and EGKS treaties of 1958. Academics and European Politicians are predicting a third generation "European Treaty" that would again reboot Europe, this time learning from mistakes and only allowing very few but loyal nations in the club, and expanding very slowly. This would create a new competitive market and would lean more and more to the system of the US.
- Frexit would not mean they go back to France Francs. Unlike Britain, France has enrolled in the Euro system and it would be economically disastrous to just throw that away. This would harm French export substantially.
- Brexit was unprecedented. Thinking a Frexit would be just as easy is following a wrong analogy, as there are a lot of differences between France's situation in the EU compared to the (previous) situation of the UK. Many French citizens support EU too much for wanting to leave it.
-...

Topic relevance: end of EU would affect EU and US stock markets, so TSLA Frankfurt and Nasdaq would drop. But I'm not too worried about the French election. I am saying this as a citizen of the neigbouring country of Belgium.

- Yes, but Germany and France are the only solid pillar, that can help the other countries. Spain has 20% unemployment rate, and almost 50% for the young generation. Belgium, Luxembourg... lol come on. They don't even contribute 20% of what France and Germany do.

- Frexit, yea well Marine Lepen doesn't give a *sugar*. She says that the euro is over valued for the French, and a come back to the Francs is the best solution.

 

[dalalsid]

Thank you! Do you have a useful link for deriving that graph, since option open interest on many of the contracts changes dynamically, often daily particularly for the nearer term strikes?

Shouldn't there be an indication of dis-continuity between the '18 and ' 19 LEAPS?

Afaik, in option data, open interest data is only available end of day so that chart might move a lot each day as open interest changes.

I'll make some effort in putting that up somewhere live if the data has any value. I'll see if there is some way to show the discontinuity between dates. For now the spacing between points gives some indication but maybe making those more visible will help. Thanks for the feedback everyone!

 

[Gerardf]

Nobody posting this ?

Elon Musk now “firmly believes” that the stock has the potential for another tenfold increase “over the next five to ten years”.

Musk made this bold statement in a letter to ‘Tesla Grohmann’ employees obtained by Electrek this week. Tesla is offering them shares instead of the full raise they are asking for and he apparently wanted to sell them on the potential value (translated from German):

“Unlike other automotive manufacturers, each Tesla employee receives Tesla shares in addition to salary. These shares can be easily sold for money, but they also open up the possibility of earning much more through stock appreciation. The tenfold increase in our share price over the past five years has made shareholding exceptionally profitable for our Tesla employees. I firmly believe that we have the potential for a further ten-fold increase over the next five to ten years. That would make a total value of € 100,000 from the € 10,000 in stock.”

Souce : Elon Musk: ‘Tesla has the real potential to be one of the most valuable companies in the world’

Is this an updated 'weather forecast' for shortville ?

 

[techmaven]

I think the French Election is the last of the worries. Marine Lepen wins? Stocks rally.

To me, it seems clear that the majority of France does not want a Frexit, so even if the final two candidates are both for Frexit, they don't have the parliamentary to push a referendum, and even if they do, the people won't vote for it. However, that doesn't mean the markets won't react negatively in the short term. The idea of a Trump election win sent the market into a tailspin, and the reality of it caused a rally. And the prospect of dissolving the EU from essentially no chance to an extremely small chance is still enough to spook investors if they are in a spook-able mood. Given the move up based on the Trump tax cut agenda, with that possibly stalling and/or market at perceived toppiness, we might be in a spook-able mood.

 

[vgrinshpun]

Here we go, just yesterday I posted that there were only four days since I began collecting data last September when shares available to borrow at Fidelity (pre-market) exceeded 1M. Today is the record - more than 1.3M shares available at 8:00am, with 520k borrowed so far. It seems that we will see spectacular trading today. If TSLA will hold it's own, it would be an indication of incredible strength...

BTW yesterday some short sellers saw an opportunity to cover - it was first net covering day since 4/06/17.

 

[vgrinshpun]

Nobody posting this ?

Elon Musk now “firmly believes” that the stock has the potential for another tenfold increase “over the next five to ten years”.

Musk made this bold statement in a letter to ‘Tesla Grohmann’ employees obtained by Electrek this week. Tesla is offering them shares instead of the full raise they are asking for and he apparently wanted to sell them on the potential value (translated from German):

“Unlike other automotive manufacturers, each Tesla employee receives Tesla shares in addition to salary. These shares can be easily sold for money, but they also open up the possibility of earning much more through stock appreciation. The tenfold increase in our share price over the past five years has made shareholding exceptionally profitable for our Tesla employees. I firmly believe that we have the potential for a further ten-fold increase over the next five to ten years. That would make a total value of € 100,000 from the € 10,000 in stock.”

Souce : Elon Musk: ‘Tesla has the real potential to be one of the most valuable companies in the world’

Is this an updated 'weather forecast' for shortville ?

I am sure he will be late, as usual, delivering on this.

 

[drinkerofkoolaid]

This is turning into a perfect setup.

When media turns against Tesla pre earnings, IV usually spikes a lot.