Advanced TSLA Options Trading

[Yoona]

I thought it would be better to move this question to the advanced options trading thread. I just noticed some very high strike options with a lot of interest for May 21st (monthly). Can anybody help me learn what type of trade this might be and why/how it was initiated? It definitely looks like a multi-leg spread, perhaps an iron condor or credit spread? So, 7000+ Puts traded at 1050/1100 strikes and a similar number of calls at 1100/1150. Is that you @bxr140 @setipoo @Lycanthrope ?

oh, i only do weeklies so i don't look that far.
i am definitely interested in the answer, though!
haven't seen puts walls that tall and far right...

 

[ZenMan]

From Benzinga Pro.

I still don't understand what this actually means:

At 10:19 a.m., a trader executed a put sweep, above the ask, of 781 Tesla options with a $840 strike price expiring on May 21. The trade represented a $11.97 million bullish bet for which the trader paid $153.39 per option contract. At 10:21 a.m., a trader executed a put sweep, near the ask, of 741 Tesla options with a $860 strike price expiring on May 21. The trade represented a $12.89 million bearish bet for which the trader paid $174 per option contract. At 10:21 a.m., a trader executed a put sweep, near the ask, of 215 Tesla options with a $860 strike price expiring on May 21. The trade represented a $3.74 million bearish bet for which the trader paid $174 per option contract. At 10:21 a.m., a trader executed a put sweep, near the ask, of 741 Tesla options with a $860 strike price expiring on May 21. The trade represented a $12.89 million bearish bet for which the trader paid $174 per option contract. At 11:01 a.m., a trader executed a put sweep, near the ask, of 233 Tesla options with a $720 strike price expiring on May 7. The trade represented a $836,470 bearish bet for which the trader paid $35.90 per option contract. At 11:16 a.m., a trader executed a put sweep, near the ask, of 200 Tesla options with a $1050 strike price expiring on May 21. The trade represented a $7.08 million bearish bet for which the trader paid $354.23 per option contract. At 11:26 a.m., a trader executed a put sweep, near the ask, of 200 Tesla options with a $1050 strike price expiring on May 21. The trade represented a $7.06 million bearish bet for which the trader paid $352.93 per option contract. At 1:01 p.m., a trader executed a put sweep, near the ask, of 201 Tesla options with a $685 strike price expiring on May 21. The trade represented a $498,480 bearish bet for which the trader paid $24.80 per option contract. At 1:13 p.m., a trader executed a put sweep, near the ask, of 500 Tesla options with a $550 strike price expiring on June 18. The trade represented a $490,000 bearish bet for which the trader paid $9.80 per option contract.

 

[ReddyLeaf]

A quick search of yahoo reveals:

Sweeps are large orders, meaning the trader who placed the order has a heavy bank roll, i.e. “smart money.” Sweep orders indicate that the trader or investor wants to take position in a rush, while staying under the radar - Suggesting that they are believing in a large move in the underlying stock in the near future.

A sweep order instructs your broker to identify the best prices on the market, regardless of offer size, and fill your order piece-by-piece until the entire order has been filled. These types of orders are especially useful for option traders who prefer speed over the lowest possible price.

If a Sweep on a Call is BULLISH, this means the Call was traded at the ASK. The buyer was aggressive in getting filled and paid whatever price they could get filled at. This usually has only one outcome, that the buyer was aggressive and wanted to get in at any price.

Bezinga help: How Do I Understand the Option Activity signal?

 

[bxr140]

I just noticed some very high strike options with a lot of interest for May 21st (monthly). Can anybody help me learn what type of trade this might be and why/how it was initiated? It definitely looks like a multi-leg spread, perhaps an iron condor or credit spread? So, 7000+ Puts traded at 1050/1100 strikes and a similar number of calls at 1100/1150.

So its not there anymore (seems like someone closed?) but I did see what you saw.

If its the same person, it seems like they built an asymmetric inverted Iron Butterfly, which is--at least a normal IB is--just a normal Iron Condor but with the same sold strike. (Note: "long" and "short" applies to ICs and IBs--as with any options strategy--but it can be a little counterintuitive which is which depending on how the trade is played so I'm using "normal" and "inverted", where "normal" is as described here).

Anyway, Its really hard to imagine that anyone would build a normal IB around 1100 as that would require price to be ~close to 1100 to receive any profit (mind, a LOT of profit), so that's why I'm assuming its inverted IB. If you can imagine the P/L flipped from the IB link above, that basically means a ~small level of profit at any price that's not between ~1050 and 1150 (or so) and a massive loss if its right in the middle.

The wildcard is what the asymmetry does...basic options strategies usually have the same number of contracts on all legs unless otherwise specified (like ratio spreads), so 10x IC's, for instance, would normally be 40 contracts total. The asymmetry on number of contracts would bias the size and shape of the P/L toward the stronger spread, in this case the put spread. Its hard to say just how many contracts were in this possible strategy and what they paid for it, and especially so since it appears closed, so its really hard (for me anyway) to speculate on exactly what they were going for.

As an aside, when contemplating any options contract or multi leg strategy--and a two-sided multi leg position like an IC or and IB is a great example--you may wish to consider the area under the curve of the P/L as a good first order indicator of risk/reward. While you won'd need to actually integrate anything here, consider the integrated sum of the risk on the downside of an options contract P/L as ~equivalent to reward on the upside. If you build a tight IC/IB, for instance, you'll have a big spike in upside on the body of the P/L, and the wings will be pretty shallow but very side. The important variable to the concept is an complex/abstracted probability modifier, which is a function of all manner of things, including being a function of time passing, which is why the concept is a thought experiment rather than a literal math problem.

Its also important to note that the bid/ask spread is also contributing to an unequal integrated comparison (as otherwise described above as equal) in a small but consistent manner. Regardless if you're buying or selling options, you're paying The Man the spread. Its kinda like the trading equivalent of the green "0" and "00" on the roulette wheel.

 

[soundart2]

If we're going to hold onto the spread until expiration either way and then execute everything, then that negates my usual idea of the benefit of later expiration as a safety valve (extra tine to recover from a macro event) if we're going to hold onto to it till expiration anyway, doesn't it, @soundart2 ?

I'm really just an amateur here, but I *think* (emphasis on "think") -- in a perfect world, you'd want to time your expiration to the exact moment that the share price hit the upper leg of the spread. In other words, in the 1000/1300 scenario, if I have June 23 expiration, but share price hits 1300 in March 23, then the final 3 months represent RISK that the share price could fall back below 1300 (or even 1000). So probably the theory that later expiration is a safety valve is with the idea that the share price will generally trend higher. But you never know. If share price hits 1300 is Dec of '21, let's say, then that would have been the better expiration (vs June of '23). Because if you sold that June '23 spread in Dec. 21 -- even with share price at 1300, you wouldn't come close to maximizing your gain. Nonetheless, at 50% max profit in that scenario, one might still decide to sell it, rather than have to wait another 1.5 yrs to *maybe* get the other 50%. That is why a straight call (vs spread) can run up faster than the spread, and more lucrative if you don't hold to expiration. All my amateur understanding, and definitely not advice.

 

[soundart2]

Don't forget that $30k gain (if successful) will have cost you $4,700, so not quite the 6x your money, unless I am reading something wrong.

Yes, you are right. I think we are stating the same thing different ways. Profit will not be 30k -- have to subtract out cost, of course. But just that the money would have 6 times. (i.e. if I double $100, that means I have $200, but only $100 profit. If I 6x 5k, I'll have 30k, but only 25k profit).

 

[soundart2]

A "roll" is a specific sort of transaction / ticket. The mechanics are to accomplish two things in a single trade (you pay for 2 commissions though, as it'll show up as two transactions in your history).

Given that you started by selling a contract (it's what I primarily have experience with), then the roll is a ticket that executes a buy-to-close on the existing position and simultaneously executes a sell-to-open on a new position.


There is a convenience factor for some. There is potentially a bid-ask spread benefit as you can specify the net result you're looking for and the transaction won't happen until the combination of the two transactions yields your credit or debit price.

The primary benefit for me is that with sold contracts it isn't that hard to get into a position where you don't have enough cash in the account to complete the buy-to-close order separately from the sell-to-open. The easy way to get into this situation is to spend the cash you receive up front when selling a contract (such as by immediately buying some additional TSLA shares; this is a reasonably popular trading strategy around these parts).

You might be able to get it done with a larger number of smaller transactions - close a few to open a few; repeat ad nauseum until everything is in the new position. While also experiencing the gains and losses that will accumulate over the series of transactions due to the shares moving while you're doing all the orders.

Thanks, @adiggs. That I didn't know. I think I see -- sounds like it's analogous to buying a spread as a single transaction, as opposed to buying the two legs separately. That makes sense. Will have to dig into ThinkorSwim. I'm sure "roll" is on there as an option.

As a sidenote @adiggs, I especially pay attention to your trade and advice posts. Somewhere along the way, I got the sense that we are (or were) at a similar place in regards to TSLA shares/worth, retirement planning, etc. You seem really on top of it, so I always like to use you as a guide of what someone in my position maybe *shoud* be doing. Though, so far, pretty much just buy and hold (with small options) vs trading or selling covered calls.

 

[TheTalkingMule]

Thanks to all that replied to my original post with advice/thoughts/perspective re: the 1000/1300 call spread. I know it's been commented on subsequent to here, too.

Again, as with golf, I'm a long-time beginner when it comes to options. Sometimes I hit the fairway, but more often than not, I shank the ball deep into the woods.

Having said that, as others have said, I learned that if you buy the spread, you basically should plan to hold to duration if you want to maximize the gain. I learned that the "hard way" on another spread I did last year, where my thesis was right, but it ran too fast for my long-dated call spread and I didn't realize full appreciation because BOTH legs went up in value. Though, a wise person once advised that if you can get a quick 50% of your max profit pretty early, it may be worth selling at that time, rather than waiting it out an extra year or whatever to get the other 50%. Or "roll" I suppose, if functionally I knew what that really meant (unless simply selling your current spread and buying a new one for the same price).

But to complete the exercise, I did wind up going out to June and buying the 1000/1300 call spread. Paid ~$47. Probably longer than I need. But my thesis/experiment was "Can I 6x my money in ~2 years with a measure of comfortable risk". Not trying to maximize it, but pick a trade I had high confidence in, and then hold to duration. And not sweat about for 2 years (assuming price appreciation is same or better than expected). So for a lot of reasons, I may be too bearish/conservative, and June 23 may be less preferable than March 23. But for this particular trade, I thought the extra quarter would give me a little extra comfort and I wouldn't sweat if I didn't make the perfect trade. But I will maybe play with some others, including a more Out of the Money straight Leap.

Thanks for all the wise advice about rolling to expand the spread and squeeze a little extra out of the trade if it starts working in my favor.

I've had an order in all day for this exact trade at $45 and now $46.69, but it's not executing. I'm assuming I can get it at around $48 and I'm fine with that, but wouldn't it be easier(cheaper) to build this spread manually?

Just looking at today's typically volatile TSLA SP movement, if purchasing both sides optimally, you could have "built" this spread for something like $36 net rather than $47 or so.

Questions:

1) Is this generally not done as you're just guessing and multiplying risk? I would only do it intra-day levering off an obvious MMD.

2) Would Fidelity let me close this manually constructed spread as one trade as if I'd bought it in one trade?

 

[soundart2]

I've had an order in all day for this exact trade at $45 and now $46.69, but it's not executing. I'm assuming I can get it at around $48 and I'm fine with that, but wouldn't it be easier(cheaper) to build this spread manually?

Just looking at today's typically volatile TSLA SP movement, if purchasing both sides optimally, you could have "built" this spread for something like $36 net rather than $47 or so.

Questions:

1) Is this generally not done as you're just guessing and multiplying risk? I would only do it intra-day levering off an obvious MMD.

2) Would Fidelity let me close this manually constructed spread as one trade as if I'd bought it in one trade?

I don't know enough to advise. Other than I assume you can do it manually, but may have to do the "buy" leg first if you aren't otherwise able to sell a call independently. (just guessing -- don't know).

Then otherwise, I surmise it's just a matter of the vagaries of the market. If you buy each leg individually, you may be able to get the spread for cheaper -- or you might pay more -- depending on direction of the share price.

 

[adiggs]

Thanks, @adiggs. That I didn't know. I think I see -- sounds like it's analogous to buying a spread as a single transaction, as opposed to buying the two legs separately. That makes sense. Will have to dig into ThinkorSwim. I'm sure "roll" is on there as an option.

As a sidenote @adiggs, I especially pay attention to your trade and advice posts. Somewhere along the way, I got the sense that we are (or were) at a similar place in regards to TSLA shares/worth, retirement planning, etc. You seem really on top of it, so I always like to use you as a guide of what someone in my position maybe *shoud* be doing. Though, so far, pretty much just buy and hold (with small options) vs trading or selling covered calls.

I do appreciate the kind words, and I'm happy to hear that you might have a chance to learn from my own learning, mistakes, and experiences.

I don't remember the exact quote, but the idea I remember and embrace is that wisdom is learning from others experiences / mistakes. As if maybe one can hop over that particular mistake and find out (sooner) what the next one is!

It's one of the reasons I post and a guiding light for myself in choosing what I post - is there something here that might be valuable to others? We all still make our own decisions and experience our own consequences - but maybe in that experience we will learn something that may find helpful as they are preparing to make that same mistake and experience that same opportunity to learn.


I like to improve, as much as possible, by learning from other's mistakes And I like to pay it forward.

 

[jeewee3000]

Hi all,

I was workin out option strategies, and am currently thinking of something that seems too good to be true. I was hoping to get some opinions on this.

As an example, let's say I have 1100 TSLA shares, 1000 of which I want to keep secure as a core holding (so no risk of getting called away ever).
The other 100 shares are "trading shares" and imagine I sold a covered call against them, let's say a JAN2022 900call. (Current premium is 70-75k).

With this premium I immediately buy 100 extra TSLA shares. Then I sell the same call against those for 70k premium.
And rinse and repeat.

Let's say I do this three times, for the sake of the example. The last premium (of my third sold CC) I keep as cash.

I would now have (disregarding the core holding):
300 trading shares (200 bought with premiums)
3 covered calls at 900c
70k cash

By january 2022 the outcome could be:

A) TSLA trades below $900/share: I keep my 300 trading shares, the CC's expire worthless, 70k cash stays with me.

B) TSLA trades above $900/share: the CC's get exercised: my 300 trading shares get called away at a price of 900/share (today's price +30%).
I'm left with the last premium of 70k and the 30% gains on 300 shares.

Core holding of 1000 shares is intact.

At first glance it seems one could do the above indefinitely without risk, which seems unlikely.

Could anyone tell me what the risks/ disadvantages are, cause can't spot them... (and don't trust myself because of it)
EDIT: if TSLA would go to $0/share all my trading shares would be worthless, but compared to today I would only have "lost" the 100 trading shares. The rest was bought with premiums of expired CC's.
Nevermind all, I made a huge error and was corrected by @Knightshade. Don't waste your time on this post.

 

[Knightshade]

Hi all,

I was workin out option strategies, and am currently thinking of something that seems too good to be true. I was hoping to get some opinions on this.

As an example, let's say I have 1100 TSLA shares, 1000 of which I want to keep secure as a core holding (so no risk of getting called away ever).
The other 100 shares are "trading shares" and imagine I sold a covered call against them, let's say a JAN2021 900call. (Current premium is 70-75k).

I assume you mean Jan 2022? Jan 2021 was months ago.

I just checked my brokerage and it's showing selling 1 Jan 21 2022 900 call nets a premium of $6,950.00.

So sounds like you looked at selling 10 of them, not 1 of them, for a 70k premium.

 

[jeewee3000]

I assume you mean Jan 2022? Jan 2021 was months ago.

I just checked my brokerage and it's showing selling 1 Jan 21 2022 900 call nets a premium of $6,950.00.

So sounds like you looked at selling 10 of them, not 1 of them, for a 70k premium.

Yikes, order of magnitute misread on my part of the premium size.

Still doable to sell 10 for 1 new one, but that takes the infinity part out of the equation, which makes much better sense than my ramblings.

Apologies all, and thank you @Knightshade

 

[bxr140]

Brought in from The Wheel thread since its pretty far removed from The Wheel...

there are multiple kinds of butterflies?

Yeah. There's a slew of possibilities out there; butterfly typically refers to three legged, same-expiry positions with a P/L that peaks (as opposed to a four-legged same expiry position--like a condor--where the P/L plateaus). I know I post this like every 5 pages now, and no page can detail every single permeation of a option strategy, but ~half way down the page is where the butterflies start.

You got my attention and double-take at "Annually that is near guaranteed profit on a fixed amount of capital; the variable is simply how much profit."

I figured it might. In a terrible year of course, profit could be pretty dismal. You definitely wouldn't want to expose a majority of your capital to that kind of strategy.



Another fun strategy is what my trading partner and I call "The Mustache". Its a double diagonal ratio spread and works well in a low volatility environment when you're unsure of underlying movement.

For reference, here's a regular, ~symmetrical ZM DD with the front 'month' expiring just after earnings and the back month a week later. Small credit, decently wide profit window at front month expiration. At expiration you're left with two long contracts (assuming you didn't close one already) with which you can take profit or roll. One strategy here might be to open 10 DD's and then maybe close out the +P's at front month expiration and roll the value of the 10 remaining +C's into a single, farther expiration call that's free and clear. Anyway, I digress...

Here's that same DD but with instead with a ratio on the spreads (in this case, two long contracts for each short), with the "mustache" P/L at front month expiration. Total debit to you is $2600 and risk maxes at -$400 with--and this is huge--no change in volatility. You end up at expiration with four long contracts instead of two this time (unless you closed one or two of the losing longs) that you can again either close or roll.

And then when we factor volatility, you can see that an increasing volatility environment is a great thing. If volatility goes up 10 percentage points, at expiration your position returns profit regardless where underlying goes.

However, given that I built this around earnings, its most likely that volatility on the back month is also going to drop, so maybe this isn't the best example, but its still an interesting thought experiment.

All the same, just playing this one out a little more, if we look at the IV/month chart for ZM we can see the peak at ~74% for this coming earnings, then a huge drop, a small bubble at ~50% for the September expiration (the next earnings) and then a plateau at 48% farther out. It stands to reason that the September bubble is going to grow over time relative to the plateau, but its probable that the plateau is probably going to move up and down generally together. The interesting expiry here is August, which is basically at that 48% plateau as well, and its probable that point will diverge from the farther expiration plateau in its up and down movement...if you imagine the wave of IV moving through time, you could imagine that expiration moving up the face of the wave more so than the plateau, so its more likely the IV for that expiry is going to rise over time than the plateau. So...maybe building a position around a back month of August is a good idea.

However, we're really only talking a week and a half until front month expiration, and its likely there will be a drop in IV across the board after earnings. So its a good idea to check out where we are relative to past volatility (2 years, since you can't trust 2020 to tell you about volatility for anything). Shown below, in early 2020 HV60 bottoms around 41 and IV60 bottoms around 38 (August will be ~2.5 months out at our 6/4 expiration). That, unfortunately, tells us there's a good potential for our back month volatility to go down...which unfortunately exposes our four long contracts to a potential drop in value.

The next step would be to fold some estimated drop in IV back into your P/L tool to determine whether or not its an acceptable risk. You might also decide to change up the ratio...say 3 longs for each 2 shorts, etc. You may decide to build something that's a little more assymetric, to provide more upside for a particular direction. There's all manner of knobs to turn and all kinds of fun to be had.

 

[soundart2]

I'm really just an amateur here, but I *think* (emphasis on "think") -- in a perfect world, you'd want to time your expiration to the exact moment that the share price hit the upper leg of the spread. In other words, in the 1000/1300 scenario, if I have June 23 expiration, but share price hits 1300 in March 23, then the final 3 months represent RISK that the share price could fall back below 1300 (or even 1000). So probably the theory that later expiration is a safety valve is with the idea that the share price will generally trend higher. But you never know. If share price hits 1300 is Dec of '21, let's say, then that would have been the better expiration (vs June of '23). Because if you sold that June '23 spread in Dec. 21 -- even with share price at 1300, you wouldn't come close to maximizing your gain. Nonetheless, at 50% max profit in that scenario, one might still decide to sell it, rather than have to wait another 1.5 yrs to *maybe* get the other 50%. That is why a straight call (vs spread) can run up faster than the spread, and more lucrative if you don't hold to expiration. All my amateur understanding, and definitely not advice.

Well, just as a follow up to this trade, I may have been more prophetic than I thought. Here we are above 1250 in early Nov, and my 1000/1300 bull call spread was worth ~12.5k last I checked. 2.5x my money, but not even halfway to the 6x I would expect at expiration if above 1300. My plan was to close the position if I hit 50% of max profit early. I had two call spreads and wound up splitting the baby. Sold ONE and converted it into TWO spreads also for March 2023 (I think was 1575/1875, but will double check). I target the same ~6x max return). With a little cash left over. If we continue to run up fast, may rinse and repeat.

Amateur Alert - I am really just experimenting here with small dollar amounts. We don’t have the same setup as we did inMay (which went down before went up), but if I found a setup where I was as confident as I was in May of TSLA being above 1300 in two years time, would love to be bold enough to make a much bigger bet.

 

[perwis]

I am curious if anyone here has some more information or thoughts on Leo KoGuan's options strategy?

As you probably know, Leo KoGuan is by now the third largest individual shareholder of Tesla. Apparently he started amassing shares in 2019, and as per Bloomberg he new owns more than 7B dollars in Tesla shares and call options.

I've read his twitter line and listened to the interview with Dave Lee and the Forbes and Bloomberg articles to try to deconstruct his strategy.

All I can make of the information I have seen is the following:

1. Buy ITM or DITM LEAPS Call options
2. Convert portion of the profit of the trade to shares
3. GOTO 1

Regarding 1) he said somewhere that he had about 1 year out calls. (I cannot find the tweet now).

Do you have any thoughts or more insight on this type of trade? It is obviously risky, as he also experienced when he lost a great portion of his shares in the crash in spring 2020. But otherwise that that?

If one would follow this strategy, what should one look for?
Timing criteria for opening tradse? (IV? Drawdowns?)
Time of expiration? (One year? Longer?)
Strike price? (DITM is more expensive, how to choose a good strike price)?
Something else?

What are your thoughts?

Here are some of the most informative tweets by him:

https://twitter.com/x/status/1448816749059608606

https://twitter.com/x/status/1451795330823909384

https://twitter.com/x/status/1451791363951894529

https://twitter.com/x/status/1451702330039029763

 

[FrankSG]

I am curious if anyone here has some more information or thoughts on Leo KoGuan's options strategy?

As you probably know, Leo KoGuan is by now the third largest individual shareholder of Tesla. Apparently he started amassing shares in 2019, and as per Bloomberg he new owns more than 7B dollars in Tesla shares and call options.

I've read his twitter line and listened to the interview with Dave Lee and the Forbes and Bloomberg articles to try to deconstruct his strategy.

All I can make of the information I have seen is the following:

1. Buy ITM or DITM LEAPS Call options
2. Convert portion of the profit of the trade to shares
3. GOTO 1

Regarding 1) he said somewhere that he had about 1 year out calls. (I cannot find the tweet now).

Do you have any thoughts or more insight on this type of trade? It is obviously risky, as he also experienced when he lost a great portion of his shares in the crash in spring 2020. But otherwise that that?

If one would follow this strategy, what should one look for?
Timing criteria for opening tradse? (IV? Drawdowns?)
Time of expiration? (One year? Longer?)
Strike price? (DITM is more expensive, how to choose a good strike price)?
Something else?

What are your thoughts?

Here are some of the most informative tweets by him:

https://twitter.com/x/status/1448816749059608606

https://twitter.com/x/status/1451795330823909384

https://twitter.com/x/status/1451791363951894529

https://twitter.com/x/status/1451702330039029763

I listened to Dave's interview with him and I have read some of his posts on Twitter.

As I understand it, he used a lot of margin in early 2020, got margin called during the COVID crash, and his position that would've been worth $10B+ today got completely wiped out.

So how has he managed to amass a new multi-billion dollar Tesla position? I assume that this is thanks to dividend payments from the business where his wealth originates from. It's a software company that does $11B in annual revenue:



Leo is the co-founder of this company (together with his ex-wife), so he likely has a large stake in this company, which is a software business so it should have high margins. It's possible that he receives as much as $1-2B (or more?) in dividends per year.

So, I believe that rather than aiming to profit from his leaps to buy more shares with them, the main reason he buys (D)ITM leaps is to sort of lock in the current stock price, so that he can exercise them when he receives more dividends.

Buying 1-2 year out $400 call options when the stock was $650 may have cost him $300-350 in premium, meaning that exercising them in 1-2 years allows him to add shares at an effective price of $700-750.

This is my guess, but he may also trade for profit in addition to it, or I could be wrong.

 

[Criscmt]

I listened to Dave's interview with him and I have read some of his posts on Twitter.

As I understand it, he used a lot of margin in early 2020, got margin called during the COVID crash, and his position that would've been worth $10B+ today got completely wiped out.

So how has he managed to amass a new multi-billion dollar Tesla position? I assume that this is thanks to dividend payments from the business where his wealth originates from. It's a software company that does $11B in annual revenue:

View attachment 746158

Leo is the co-founder of this company (together with his ex-wife), so he likely has a large stake in this company, which is a software business so it should have high margins. It's possible that he receives as much as $1-2B (or more?) in dividends per year.

So, I believe that rather than aiming to profit from his leaps to buy more shares with them, the main reason he buys (D)ITM leaps is to sort of lock in the current stock price, so that he can exercise them when he receives more dividends.

Buying 1-2 year out $400 call options when the stock was $650 may have cost him $300-350 in premium, meaning that exercising them in 1-2 years allows him to add shares at an effective price of $700-750.

This is my guess, but he may also trade for profit in addition to it, or I could be wrong.

Great to hear from you @FrankSG
How is the MBA thing going?
Thanks again for your awesome work!
If your work were primarily through Youtube, my bet would be that you would've been the most popular among Tesla Youtubers/Influencers
I am saying this despite my very high regard for Rob@TeslaDaily

 

[FrankSG]

Great to hear from you @FrankSG
How is the MBA thing going?
Thanks again for your awesome work!
If your work were primarily through Youtube, my bet would be that you would've been the most popular among Tesla Youtubers/Influencers
I am saying this despite my very high regard for Rob@TeslaDaily

Hey!

I finished it earlier this month

Thank you so much for the praise! Although I'm not sure I agree. My content is more hardcore research. I'd be my own favorite YouTube channel, but I think it's too in-depth for more casual investors/Tesla fans.

That's totally fine with me though. I don't like to be famous/well-known, and I'm really happy that some people have enjoyed (and benefited from) my blog posts.

 

[Criscmt]

Hey!

I finished it earlier this month

Thank you so much for the praise! Although I'm not sure I agree. My content is more hardcore research. I'd be my own favorite YouTube channel, but I think it's too in-depth for more casual investors/Tesla fans.

That's totally fine with me though. I don't like to be famous/well-known, and I'm really happy that some people have enjoyed (and benefited from) my blog posts.

One metric one can go with, for the ranking, is the amount of money one could've made through your blog posts on Tesla. Compared to what one would've made through knowledge from other TSLA sources, I think you are the best
Yes, it's that hardcore, high quality research. That's what is missing with every other source I came across.
Anyhow, did you take a job somewhere? Moving back to US?