Cancel Roadster deposit to reinvest in TSLA/sell TSLA puts?

[phantasms]

Hypothetically....

Imagine someone has a Roadster deposit and is considering canceling it to invest that $50k back into TSLA. Good idea or bad idea?

Started buying TSLA in early 2019. Did very well. Had 1500 shares, sold a bunch near the top to take back my initial investment, home improvements, put $50k into Roadster deposit, etc, and currently have 900.

Pro of canceling:
1. Able to sell puts on TSLA. At this level that's ~2 per week and ~$1000 profit per good week if we continue to chop along. Puts obviously are risky but IMHO buying TSLA shares at this level is probably a good idea. I'd love to have a nice round 1,000 shares again anyway. Easier to keep track of the future splits and growing fortune. lol I don't have the balls to sell calls at this level so I've lost out on that nice option income I was making, but not needing.

2. Profits from options or share appreciation off that $50k may more than offset any potential price increase in the Roadster.


Negative of canceling:
1. When I put the $50k down the website said $200k base price. Since that time they have removed the base price. While the contract explicitly states that this is to hold your place in line and they don't know the price of the car yet, I imagine they would do the right thing and maintain the $200k base price for those who reserved before a certain date. I can't imagine them saying to someone who gave $50k in 2017 "oh sorry, it's $300k now". That said, a loaded Model X Plaid is in the $160s so I've got to imagine that the Roadster would be more than $200k once they bring it to market.

2. I lose this $50k that I have held in essentially a 1 month lock time delay safe which is a nice to have I guess.

3. Having 1000 or 1100 shares instead of 900 shares going forward isn't going to be much of a game changer.

What would you do in this situation? Anything else to consider? My family is in very good shape financially and we have zero debt of any kind, however I have no extra cash currently to put into the market.

I struggle with this daily as of late. Really any thoughts are appreciated.

 

[ReddyLeaf]

FYI, I have more shares, but would still do it. The $50k is doing nothing but losing out to inflation. Tesla does not need the cash and selling weekly OTM puts is a great way to earn 1%/wk. Worst case, you end up getting put shares at the strike. Oh well, wheel it around and sell CCs at the same strike until exercised and you lose the shares back into cash. Repeat until Tesla actually delivers the product that you want. It could be years. Who knows?

 

[phantasms]

FYI, I have more shares, but would still do it. The $50k is doing nothing but losing out to inflation. Tesla does not need the cash and selling weekly OTM puts is a great way to earn 1%/wk. Worst case, you end up getting put shares at the strike. Oh well, wheel it around and sell CCs at the same strike until exercised and you lose the shares back into cash. Repeat until Tesla actually delivers the product that you want. It could be years. Who knows?

That would exactly be the plan. I'd probably sell one at the money with the hope to wheel and one a little further out. I should be able to get nearly 2% on the $50k. I feel the $50k isn't losing out to inflation because in a way it's locked in time at the point I made the reservation. It's potentially protecting me against inflation on the Roadster price, well, that's the hope anyway. lol

 

[elasalle]

If you can live with not being in the 1st 5, 10, 50, 100, 500, 1000 ... no harm in cancelling.
Over sold conditions says good time to buy shares, but anything can happen ... cheers!!

 

[EVMeister]

I'm very confident the stock price will be up significantly by the time the Roadster is out. I honestly think you'd be kicking yourself if you held your deposit rather than profiting from the TSLA rise. You've still got your Cybertruck reservation to look forward to, haven't you?

 

[MikeC]

If TSLA doesn’t recover, you probably shouldn’t be buying a Roadster.

If it does recover, it will be better to be in shares.

 

[hobbes]

You don't know when Roadster will actually come. Might be a long time that money is not working. I got a reservation when Model 3 was launched and waited years, only to to get one a few weeks before everyone who had not reserved. Might be different for low-volume roadster, then again a lot higher deposit. Good time now to invest into Tesla now, likely you get two or more Roadster worth when they become available.

BTW, did you check if you could sell your reservation?

 

[thesmokingman]

We're at a rather deep low, so dropping 50K here is like perfect timing. Let it sleep in there till whenever the roadster is released. 50K sitting there doing nothing (deposit) is... well a lot of nothing.

 

[ElectricIAC]

Hypothetically....

Imagine someone has a Roadster deposit and is considering canceling it to invest that $50k back into TSLA. Good idea or bad idea?

Started buying TSLA in early 2019. Did very well. Had 1500 shares, sold a bunch near the top to take back my initial investment, home improvements, put $50k into Roadster deposit, etc, and currently have 900.

Pro of canceling:
1. Able to sell puts on TSLA. At this level that's ~2 per week and ~$1000 profit per good week if we continue to chop along. Puts obviously are risky but IMHO buying TSLA shares at this level is probably a good idea. I'd love to have a nice round 1,000 shares again anyway. Easier to keep track of the future splits and growing fortune. lol I don't have the balls to sell calls at this level so I've lost out on that nice option income I was making, but not needing.

2. Profits from options or share appreciation off that $50k may more than offset any potential price increase in the Roadster.


Negative of canceling:
1. When I put the $50k down the website said $200k base price. Since that time they have removed the base price. While the contract explicitly states that this is to hold your place in line and they don't know the price of the car yet, I imagine they would do the right thing and maintain the $200k base price for those who reserved before a certain date. I can't imagine them saying to someone who gave $50k in 2017 "oh sorry, it's $300k now". That said, a loaded Model X Plaid is in the $160s so I've got to imagine that the Roadster would be more than $200k once they bring it to market.

2. I lose this $50k that I have held in essentially a 1 month lock time delay safe which is a nice to have I guess.

3. Having 1000 or 1100 shares instead of 900 shares going forward isn't going to be much of a game changer.

What would you do in this situation? Anything else to consider? My family is in very good shape financially and we have zero debt of any kind, however I have no extra cash currently to put into the market.

I struggle with this daily as of late. Really any thoughts are appreciated.

I think you stand to lose more in opportunity cost by not pulling the deposit and reinvesting.

 

[ZeApelido]

Buy 7 June 2024 100/350 call spreads with that $50k.

 

[phantasms]

Buy 7 June 2024 100/350 call spreads with that $50k.

I would but I don't have a boat to make trades on.

 

[gene]

In 2012 when I paid for my first Model S with cash, had I taken that $92k and bought TSLA it would be about $8 million or so. Most expensive car ever!

 

[ElectricIAC]

In 2012 when I paid for my first Model S for cash, had I taken that $92k and bought TSLA it would be about $8 million or so. Most expensive car ever!

Now imagine how the guy who bought a pizza with Bitcoin feels?

 

[MikeC]

In 2012 when I paid for my first Model S with cash, had I taken that $92k and bought TSLA it would be about $8 million or so. Most expensive car ever!

But if you hadn’t bought it, would you have accumulated and held as much TSLA as you did?

I consider my 2013 S purchase to be my greatest investment decision because it led me to go all-in on TSLA.

Although it’s been slightly less great lately.

 

[gene]

Yes, of course, as soon as I received my car and drove it a few days I bought $xxx,xxx worth of TSLA. I still have all those shares. I still live as humbly as I ever had. Nothing I want to buy. Leaving it all for the kids.

 

[phantasms]

People with the name Gene are the best kinds of people.

-Gene

 

[phantasms]

After a long chat with my wife, on the 12th [~168] we decided the best move was to keep the deposit.

Two days ago [$110], while skinning up a mountain, we chatted again. If there's zero commentary on the Roadster and TSLA hasn't recovered above ~$150 or so by the Q4 call I'll cancel the deposit. It seems likely they're going to unveil something on or near the call. I doubt it's the Roadster but I'd be seriously kicking myself if I cancel now and then in two weeks they show it off.

My guess is we still haven't seen the low of the macros, and maybe TSLA, and that the Roadster wont be coming anytime soon. We're nearing prices were I can add another 50% of shares. It would be silly not to.

Thank you all for the commentary and votes.

Be well and buy the dip...without margin!