Hi guys,
New to the forum, but I've been an avid Tesla follower and stock owner for the last 3.5 years. I love this company and what they're doing and I find it incredibly fascinating being able to watch their progress on websites like Elektrek, InsideEVs, TeslaMondo, etc.
A bit of background about myself - I'm a former Apple stockholder (bought in 2007 and sold in 2014 for a hefty profit). I used that money to pick up my first Tesla shares and I've been accumulating (slowly) ever since.
The thing is- I've been doing this in all cash and without leverage. A friend recently told me that if I was so confident about TSLA and it's ability to deliver on its promises, and that the share price would rise, why not just buy in-the-money call options and leverage your capital.
Can someone help me understand a bit more about this?
Let's say, for example, I have 1000 shares paid for in cash. At roughly $300 per share, my total investment is 300,000. I'm expecting the stock to triple at some point in the next 3-5 years (that's just my personal expectation). So on a returns basis I'd get about 600k in profit from this point onwards.
Can someone explain how in-the-money call options work? How could I increase my return using the same expectation (3x in 3-5yr), and what are the key risks I should be aware of in doing so?
Thanks in advance for your input.
New to the forum, but I've been an avid Tesla follower and stock owner for the last 3.5 years. I love this company and what they're doing and I find it incredibly fascinating being able to watch their progress on websites like Elektrek, InsideEVs, TeslaMondo, etc.
A bit of background about myself - I'm a former Apple stockholder (bought in 2007 and sold in 2014 for a hefty profit). I used that money to pick up my first Tesla shares and I've been accumulating (slowly) ever since.
The thing is- I've been doing this in all cash and without leverage. A friend recently told me that if I was so confident about TSLA and it's ability to deliver on its promises, and that the share price would rise, why not just buy in-the-money call options and leverage your capital.
Can someone help me understand a bit more about this?
Let's say, for example, I have 1000 shares paid for in cash. At roughly $300 per share, my total investment is 300,000. I'm expecting the stock to triple at some point in the next 3-5 years (that's just my personal expectation). So on a returns basis I'd get about 600k in profit from this point onwards.
Can someone explain how in-the-money call options work? How could I increase my return using the same expectation (3x in 3-5yr), and what are the key risks I should be aware of in doing so?
Thanks in advance for your input.