2017 Investor Roundtable: TSLA Market Action

[zdriver]

I was under the impression new OI data wasn't available until the morning. Here's OI as of this morning.

View attachment 249159

Looks like your method definitely has some merit though. I'm gonna guess a 372.50 pin on the bearish side, but most likely $375.


Nice volume this morning though, so that may throw that whole method out the door.

Now we're *under* those puts, so a fair bit of that algo activity was adjusting delta hedges on puts, causing a "put squeeze" that added to the dark pool selling pressure. Doing this on a Friday, clever fsckers...

I bought some but stopped buying after I saw the Dark Pool comment. Not sure how to interpret that.

@zdriver how does what you're observing now compare to the first week of July?

I don't have historical 1/5m data back that far. I do for sure recall it wasn't THIS much dark pool selling, moreso "other guy" selling, aka not identified as anything in particular. This is very clearly an institution(s) outright dumping shares on the market and doing so with market orders for a significant % of them. Totally irrational unless you're in a serious hurry to get rid of shares. (bad news that's actually material like an earthquake in Fremont, etc)

tbh, I'm not sure how to interpret either. The magnitude of the selling is such that I doubt it'll snap back from this. The scenario I spoke of last night is playing out, the weekly candle looks awful, and the monthly is now a doji. Very clear double top formed on daily, with very fast rejection of previous highs.

Edit: algos started to cover, dark pools just dumped another 10k around 358.50. Probably also worth mentioning this "confirms" the head & shoulders "top".

 

[Bet TSLA]

Are you using the proceeds from selling those puts to buy shares?

I'm confused on what you mean by buying opportunity while selling puts.

"Buying opportunity" is a phrase usually meaning "The stock price is down, but I think it's going up from here." Looks like I was wrong. No, I am not using the proceeds for anything. My account is sitting with plenty of cash to cover all my positions. Of course if the stock goes down enough....

So the benefit here is that if he gets assigned he buys 10000 shares at 361 each effectively after the 2.39m in generated cash? So as long as the price is below 600 and above 361 he wins right?

It's rare to get assigned before the expiration date with a stock that doesn't pay dividends. The owner of the puts loses the time value if they're exercised, so they get sold instead. In any case I win if the stock is above $360.60 at expiration. I win the maximum (keeping the whole pile of cash) if the stock is above $600 at expiration. On the other hand, if the stock goes down from what it was at when I opened the position, I lose money. But time is on my side and I slowly gain the time premium. It's a simple option so it isn't all that complicated.

Yes, plus he has favorable tax treatment. If he buys back the put at least a year from now, then any gain is treated as long term capital gain (or loss). If he gets put the shares he doesn't pay taxes until he sells those shares.

I'm going to follow his lead and sell some 600s of my own. I've been selling 30-45 day out Puts and have been doing quite well. But, all my gains will be treated as ordinary income so uncle sam will be taking half of all my put income. Better to go with a method that will move the income to long term capital gains....

Be careful here. It turns out that this way of trading is always treated as short term, even if you hold the position for over a year. The only way to turn it into a long term trade is to get put the stock and then hold that for a year or more. Not intuitive. And illustrative of the fact that you can really get burned if you don't check all your assumptions.

Also, please play around with paper trading or tiny positions first. It's easy to lose lots of money very fast doing this. The down side is effectively unlimited. Calculate your potential losses if the stock drops 30%. It's brutal.

 

[Mulligan Jake]

This seriously brings back some memories of the last ATH.

The Friday closing price the last 6 Friday's is
$357.87, 347,46, 348.05, 355.40, 343.40, 379.81
I don't see any panic here,

 

[ValueAnalyst]

Now we're *under* those puts, so a fair bit of that algo activity was adjusting delta hedges on puts, causing a "put squeeze" that added to the dark pool selling pressure. Doing this on a Friday, clever fsckers...



I don't have historical 1/5m data back that far. I do for sure recall it wasn't THIS much dark pool selling, moreso "other guy" selling, aka not identified as anything in particular. This is very clearly an institution(s) outright dumping shares on the market and doing so with market orders for a significant % of them. Totally irrational unless you're in a serious hurry to get rid of shares. (bad news that's actually material like an earthquake in Fremont, etc)

tbh, I'm not sure how to interpret either. The magnitude of the selling is such that I doubt it'll snap back from this. The scenario I spoke of last night is playing out, the weekly candle looks awful, and the monthly is now a doji. Very clear double top formed on daily, with very fast rejection of previous highs.

thank you for that information. What's the total number of shares sold by the hypothetical institution? Let's try to figure out their position level. How many shares are we talking about here?

 

[Nate the Great]

Well the thread got a lot quieter.

It's also interesting to note that Tesla is still somewhat reactive to minor news reports.

 

[geneclean55]

Wow, did I just see a green candle?

 

[Nate the Great]

Note algos started off buying, didn't really dump until S1 got hit.

You are referring to the S-1 security for Solar City?

 

[Richgoogol]

When does the delivery report come out?

 

[Tslynk67]

The Friday closing price the last 6 Friday's is
$357.87, 347,46, 348.05, 355.40, 343.40, 379.81
I don't see any panic here,

No panic, it's just BORING!

 

[zdriver]

You are referring to the S-1 security for Solar City?

Nope, S1 pivot point.


Well, now we know why someone was doing this.

U.S. TRADE COMMISSION .. FINDS HARM TO U.S. PRODUCERS FROM IMPORTS OF SOLAR PANELS

Check out FSLR. Many traders were speculating TSLA would do that if the solar panel decision came out that way.

 

[aznt1217]

Nope, S1 pivot point.


Well, now we know why someone was doing this.



Check out FSLR. Many traders were speculating TSLA would do that if the solar panel decision came out that way.

But these are the same people that claim that Tesla Solar is a sham and doesn't contribute anything. Using that same logic, if it doesn't contribute... how can it harm.

 

[ValueAnalyst]

Nope, S1 pivot point.


Well, now we know why someone was doing this.



Check out FSLR. Many traders were speculating TSLA would do that if the solar panel decision came out that way.

This doesn't really affect Tesla's intrinsic value... Tesla will be producing its own Solar Roofs in Buffalo...

I'm not sure why an institutional would sell 100k shares in dark pool based on this, but that's only $35 million anyway.

Anything short of very negative fundamental news, this is a buying opportunity imo.

 

[zdriver]

But these are the same people that claim that Tesla Solar is a sham and doesn't contribute anything. Using that same logic, if it doesn't contribute... how can it harm.

Not harm, help. That finding would supposedly set the stage for import tariffs on foreign panels, helping panel manufacturers here, hence FSLR launching like a Falcon 9 upon news breaking of that decision.

FSLR now up 7.25%.

Dark pool selling continues, net -100k shares now.

 

[Waiting4M3]

"Buying opportunity" is a phrase usually meaning "The stock price is down, but I think it's going up from here." Looks like I was wrong. ...

Since you were talking about selling J19 puts, I assume you're in it for the long term. From that perspective, it seems too early to judge a buy to be wrong after just a few days. In TSLA, it's almost impossible to win short term because of volatility, but it's also impossible not to win long term.

 

[vgrinshpun]

Now we're *under* those puts, so a fair bit of that algo activity was adjusting delta hedges on puts, causing a "put squeeze" that added to the dark pool selling pressure. Doing this on a Friday, clever fsckers...



I don't have historical 1/5m data back that far. I do for sure recall it wasn't THIS much dark pool selling, moreso "other guy" selling, aka not identified as anything in particular. This is very clearly an institution(s) outright dumping shares on the market and doing so with market orders for a significant % of them. Totally irrational unless you're in a serious hurry to get rid of shares. (bad news that's actually material like an earthquake in Fremont, etc)

tbh, I'm not sure how to interpret either. The magnitude of the selling is such that I doubt it'll snap back from this. The scenario I spoke of last night is playing out, the weekly candle looks awful, and the monthly is now a doji. Very clear double top formed on daily, with very fast rejection of previous highs.

Edit: algos started to cover, dark pools just dumped another 10k around 358.50. Probably also worth mentioning this "confirms" the head & shoulders "top".

Thank you for your posts. Please keep this info coming.

I think that we are not done for today, unfortunately. It looks like we might see more selling. It seems that the upper line of the triangle I've been posting might offer some support. I will be very happy to be proven wrong...

 

[Nate the Great]

This seems to be closely linked to the fine levied to Solar City.

 

[Nate the Great]

Thank you for your posts. Please keep this info coming.

I think that we are not done for today, unfortunately. It looks like we might see more selling. It seems that the upper line of the triangle I've been posting might offer some support. I will be very happy to be proven wrong...

View attachment 249170

With your triangle, what is the historical relevance. I'm assuming this is a pattern that you have identified?

I see resistance at 346.

 

[zdriver]

This seems to be closely linked to the fine levied to Solar City.

That's what the news will probably say, which is insane given how tiny the amount of the fine is.
In reality though, Solar City's panel manufacturing business would be greatly helped by reduced competition caused by protective tariffs on foreign panels, (in the minds of wall st at least) since they're (or will be shortly) all made in the US. Again, look at what happened to FSLR on that news of imported solar panels. Just saw it hit +8%, in about 30 minutes.

Dark pool selling flattening out now. Damage already done however. Keeping the selling pressure on when it tired to bounce killed said bounce pretty bad...

 

[ValueAnalyst]

This seems to be closely linked to the fine levied to Solar City.

Could you please explain the indicators of the link you see? Is it time of news/trades?

I just don't see how such a small fine and no assingment of guilt can lead to this drop....

That's what the news will probably say, which is insane given how tiny the amount of the fine is.
In reality though, Solar City's panel manufacturing business would be greatly helped by reduced competition caused by protective tariffs on foreign panels, (in the minds of wall st at least) since they're (or will be shortly) all made in the US. Again, look at what happened to FSLR on that news of imported solar panels. Just saw it hit +8%, in about 30 minutes.

Precisely.

 

[Navin]

That's what the news will probably say, which is insane given how tiny the amount of the fine is.
In reality though, Solar City's panel manufacturing business would be greatly helped by reduced competition caused by protective tariffs on foreign panels, (in the minds of wall st at least) since they're (or will be shortly) all made in the US. Again, look at what happened to FSLR on that news of imported solar panels. Just saw it hit +8%, in about 30 minutes.

Dark pool selling flattening out now. Damage already done however. Keeping the selling pressure on when it tired to bounce killed said bounce pretty bad...

Tesla becoming way oversold. Think it bounces hard soon. Not buying yet but once it drops <20 on the rsi hourly. Will buy weeklies probably next week