Merrill Lynch Bank of America Raising PO’s for Buy rated TSL, YGE... TSL 12 => 22 and YGE 7 => 11
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Alternative Energy Investor Discussions
- Thread starter ShortSlaver
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Mario Kadastik
Active Member
Yawza, I had a standing sell order on Jan 52.5 for 5.3 to hedge and it went through at some point while I was monitoring TSLA. Now the call's already worth $7 and I could have sold $57.5 for $5.3
Oh well. And I'm all out of cheaply bought SCTY calls as well so I guess I'll have to be satisfied with 300% gains on initial expenditure if the risk free spreads mature fully in the money.Wednesday, Oct 16
10:18 AM
10:18 AM
SolarCity prices stock, convertible debt offerings
- SolarCity (SCTY +2.9%) is selling 3.4M shares at $46.54 (3% below current levels), and $200M worth of convertible senior notes due 2018. The debt offering was upsized from $125M yesterday. Net proceeds from the offerings are expected to total $344.8M-$396.6M, depending on the extent to which underwriter options are exercised. (PR)
- The convertible notes carry an interest rate of 2.75%, and a conversion price of $61.67 (30% above current levels).
- The offerings are the latest in a string of financing moves (I, II, III) carried out by SolarCity, as the company makes an all-out push to ramp its solar installations.
Gtoffo
Member
I bought some SCTY leaps for 2015 (already up BTW). I'm betting we will solve the debt crisis and go up even more today. So I would like to close my Bull Call spreads (they would be risk free even now) a bit later today. Basically I will have substituted my shares with leaps (should give me some good leverage going forward) and removed my risk with my BC spreads.
It feels so easy when the underlying goes up....
It feels so easy when the underlying goes up....
I disagree.
1. Buy Call @ stock low, Sell Call @ stock high
2. Buy Put @ stock high, Sell Put @ stock low
To do either of these activities in reverse order requires "naked" option writing, and gives you more tools in your toolbox. But doing them in the displayed order can make money as well -- with zero investment in the actual stock.
Edits in blue.
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Mario Kadastik
Active Member
Good luck with that. It will not work in the long run (well it might with TSLA).
In order to be able to use the really great options strategies that minimize risk and make you money you need the highest level of clearance. There are very complex options strategies out there that do a great job in risk management, but you need the highest level of clearance (and of course the knowledge how to set these strategies up).
Gtoffo
Member
I think you misunderstood my post.I think you meant 2. Sell Put @ high, buy Put @ low
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Again, no. You spoke (and continue to speak) in absolutes that are incorrect. If you'd like to qualify them so that they are not absolutes, then we might agree.
Yes, if you're willing to ask for more tools and take on the associated risk of them you have additional ways to make money but saying those additional tools are the only way to make money with options is patently incorrect.
I did over 200 transactions in a single year a few years ago on a single stock dealing only with covered calls (not even puts) and made some nice money off of it. Currently, I'm "dabbling" with covered calls and puts in TSLA and making some nice gains with it. Can I make more with uncovered? Probably, and I might move to that. But saying it's the only way to make money with options is quite incorrect and, frankly, makes me question your perspective generally.
Sorry mods: I probably created more "pull this into a new thread" work by continuing the off-topic, but I think it's important to address comments that are asserted as truisms when we have a lot of people of different stock experience levels that are reading these threads.
Mario Kadastik
Active Member
Ah indeed I thought the low and high were the call/put values, now I understand you meant the underlying. Yes, buying calls and puts to ride the ups and downs can work, but it has to be relatively short term options. I've used weeklies to get nice exposure to such moves. Doing it with long term options is going to be harder, but yes means no need for any actual stock (I in fact have only money and options, no stocks at all).
Has anyone tried selling puts for CSIQ or SPWR? I'm looking to sell deep ITM puts and hoping they'll be exercised and I'll be assigned the shares. Doing this as a way to buy shares of CSIQ and SPWR (essentially at todays prices) in a few months when I have more cash on hand. If puts expire worthless then at least I'll have made profit from the premium. But the volume for puts is so low for both CSIQ and SPWR and it's hard to find a good deep ITM strike. So just wondering if others have done this before?
Just sold some SPWR March 22 $39 puts for $10.90. So I'll only have a loss if SPWR is below 28.10 come March. Otherwise, if it's under $39, I'll be happy to purchase the shares and if it's over $39 I'll just keep the premium. Biggest risk is the economy tanking and causing SPWR to tank which I think is unlikely.
Actually fairly happy with this trade. If I see some intra-day pullbacks on CSIQ or SPWR I might continue to do this.
Actually fairly happy with this trade. If I see some intra-day pullbacks on CSIQ or SPWR I might continue to do this.
I like this trade. I would do a lot more of these if I had a ton of money. Since I don't, I buy calls. I just don't like selling puts because it ties up a lot of capital.
Maybe I get carried away sometimes speaking in absolutes, but I noticed a lot of new investors coming in here seeing people make small fortunes on options so they want to buy as well. I am trying to discourage people from doing this if they do not understand options extremely well.
I am just passing along some knowledge from a very smart MBA professor who had experience working for hedge funds, etc. He says that you need max level clearance in options and that the other levels will only lose you money. Buying calls is not going to work in the long run, because it is like gambling against the casino. If you do your homework on a stock, know that it is going to go up a lot very quickly, and you understand options extremely well then you can beat the system and consistently make money (even with straight calls and lowest level of clearance), so I will give you that. But there are a lot of newbies here that are going to get crushed with options.
No one ever got wiped out from buying AAPL stock. But I have read about a lot of people who got wiped out in 2008 from buying options in AAPL. Same thing is going to happen to TSLA eventually.
In your example, one year time frame is not long-term. Even if TSLA goes up for the next 10 years, then there will definitely be periods where people will lose lots of money on call options and some will even get wiped out. If you have highest level of clearance and use sophisticated strategies then you can avoid getting wiped out in the worst of times and fight to live another day, while maintaining most if not all of the upside.
I am just trying to help people not lose money in these stocks. Those who are more sophisticated in options can simply ignore what I write. I write in absolutes sometimes in order to scare away newbie investors who don't know anything about options, but think it is a guaranteed way to make big returns on TSLA when it goes up.
I will admit that options have been kicking my ass a bit the past few weeks. I don't have a lot of capital compared to most on this board so I liked the idea of tying up less money with more potential upside. Definitely been a learning process, and I think after I gain some of my losses back I'm going to stick to LEAPS and normal stock. I find myself way too stressed out with shorter term options...
My take away is that you definitely need a larger portfolio to benefit from dealing with options. I don't have enough cash laying around to hedge myself at every little bump and its been chipping away at me throughout this whole government shutdown process. I'm currently sitting at a 35% overall loss, and it was closer to 50% at its worst.
So I appreciate Sleepy's honesty. While its discouraging for me to read it, its also showing to be true. Just glad I'm young and can afford a loss like this.
My take away is that you definitely need a larger portfolio to benefit from dealing with options. I don't have enough cash laying around to hedge myself at every little bump and its been chipping away at me throughout this whole government shutdown process. I'm currently sitting at a 35% overall loss, and it was closer to 50% at its worst.
So I appreciate Sleepy's honesty. While its discouraging for me to read it, its also showing to be true. Just glad I'm young and can afford a loss like this.
Actually, the reason I'm doing this is because it doesn't require money up front. I would like to buy calls, but don't have the cash now and IV is really high so selling puts just seems like a better strategy. You're right, it does tie up my margin capital, but I'm okay with that b/c I avoid margin anyways.
yep and I agree pretty much with sleepy. except on rare occasions (and in small amounts)- I stick with stock and LEAPS. and the LEAPS get rolled up and out as they build (usually converting back to stock)- I used the LEAPS generally as a stock replacement to accelerate gains for growth stocks like TSLA watching them constantly - rarely less than 6 months from expiration before moving them out. That's worked well for me and actually reduces the $ at risk if you equate it to stock shares instead of $s in.
When i first started learning i ran into much of the same Clemsons. I too was down some 50% at one point, lucky at that time have very little in my options account because i knew i was just learning. the final straw of that hit came on the GS "upgrade" of Tesla. Since then i have played longer options and safer ones. I still play some short term earnings here and there and seem to get bit every time. But i play with small amount of house money that i am ok with gambling. I have listened to sleepy and i take my time with any options i purchase if the sum of money is over $500. I still play some feeler options with small capital (Under $500) Only one has really paid off (Thanks FB!)
If your just getting into options due to the lore of high reward on small amount of cash. be smart and play options like stock. Stick with long term, ITM or Close OTM calls. The % gain might not be as big as many other plays, but that is because they are much safer.
Dont blindly fallow like sheep. Make your own informed choices. Dont go play every solar cuz solar is the "it" thing to do. Some of these solars are still in real danger of going under.
If your just getting into options due to the lore of high reward on small amount of cash. be smart and play options like stock. Stick with long term, ITM or Close OTM calls. The % gain might not be as big as many other plays, but that is because they are much safer.
Dont blindly fallow like sheep. Make your own informed choices. Dont go play every solar cuz solar is the "it" thing to do. Some of these solars are still in real danger of going under.
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Yea I think my problem was that I got greedy. I tend to dislike delayed gratification so I saw numbers like "300% in a month" and my ears perked right up, haha. The whole waiting thing is my biggest work in progress
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