that does it - I'm naming my just ordered tesla "p-fox" when it comes in march.
-
Want to remove ads? Register an account and login to see fewer ads, and become a Supporting Member to remove almost all ads.
Papafox's Daily TSLA Trading Charts
- Thread starter Papafox
- Start date
-
- Tags
- elon is an ass TSLA
TrendTrader007
Active Member
wow! this is the most cogent and thoughtful analysis i have ever seen on this entire forum. amazing job Papafox!
Careful, a big black Portuguese Water Dog named Iceman might jump into your Tesla if you give it such a name
. After touring 50 states in a Model S, he has a predisposition for hanging out in Teslas.Oh boy, not sure where I'm going to hide if the gigafactory event turns out to be a dud.
3Victoria
Active Member
Despite the shorts drawing down 133,000 shares at Fidelity by 9:30am, the day belonged to the longs, with broader markets up strongly, automotive stocks up much more sharply, and word arriving from Tesla's gigafactory event that volume production of the new 2170 cells has begun. Further, the automotive version of the 2170 cell will begin production in Q2 so that am ample supply of the batteries are available for Model 3 when its production begins.
Shorts must be discouraged at this point. Beginning soon after the SCTY merger, bigger players started buying back into TSLA, which changed the dynamics of short-selling. First, we saw capping events that did not hold. Next, we witnessed mandatory morning dips that were anemic and used by informed traders such as us as buying opportunities. The last short selling strategy to fall was the late afternoon decline into close, and for now it too has vanished. The shares drawn down by shorts this morning equal nearly $30 million worth, and for several trading sessions now, the short sellers have gotten shellacked most every time. With $30 million here and $30 million there, after a while it adds up to BIG money. One has to wonder when they'll reassess the gravity of the change that is taking place with TSLA trading.
Many very large purchases took place early in the morning, with several minutes exceeding 30,000 shares traded, leading to volume of more than 11 million shares for the day. These big purchases imply institutions or other big dog buyers. An amazing 224,000 shares traded hands on the minute of the closing bell. No doubt the gigafactory event played a role in today's success, even before any word of the event's presentations reached the street. Tesla should be complimented on their timing of this event. Yesterday's Q4 delivery numbers showed a short-term miss but long-term promise with strong demand and strong production rate. Today's gigafactory event focused investors on the year ahead, which put yesterday's numbers in the best context. How much of today's run up was due to the gigafactory event and how much was due to auto stocks being up greater than 4% today is open for debate.
Conditions:
* Dow up 60 (0.30%)
* NASDAQ up 48 (0.88%)
* TSLA 226.99, up 10.00 (4.61%)
* TSLA volume 11.2M shares
* Oil 53.14, up 0.81 (1.55%)
* Morning's Fidelity short share drawdown or (covering) and interest rate: 133,000 shares by 9:30am, 1% interest rate
* Yesterday's www.shortanalytics.com percentage of TSLA trading done by shorts: 55%
* News: Tesla holds gigafactory media event in morning; Ford up 4.61% today, GM up 5.52%
Last edited:
I have a theory than many shorts are small investors and only pay real attention after the market closes. So I think there might be a bit of panic buying/covering in the morning. I certainly hope so...
Observations to follow later
Conditions:
* Dow down 23 (0.21%)
* NASDAQ up 11 (0.20%)
* TSLA 226.75, down 0.24 ((0.11%)
* TSLA volume 5.8M shares
* Oil 53.65, up 0.39 (0.73%)
* Morning's Fidelity short share drawdown or (covering) and interest rate:132,000, 1.75% (up from 1% yesterday morning)
* Yesterday's www.shortanalytics.com percentage of TSLA trading done by shorts:60%
* News: Ford down 3.04%, GM down 1.89%
I've mentioned elsewhere that short interest seems to be going up to very high levels again but I'm not being offered Securities Lending Fully Paid deals and the borrowing rates for short-sellers still seem to be quite low. Accordingly, I think we've been seeing some major leveraged buys on margin by aggressive longs. This would provide more shares for short-sellers without raising their borrowing costs.
Would be interesting to know who these big margined longs are (and why they didn't buy in earlier), but we'll probably never know.
Would be interesting to know who these big margined longs are (and why they didn't buy in earlier), but we'll probably never know.
Commentary for Jan 5
Today looked like a classic short attack on opening with 132,000 shares to short drawn down from Fidelity this morning and an impressively large trading of 163,000 shares during the first minute, followed by 48,000 shares two minutes later and 25,000 shares shortly thereafter. The downward spikes with immediate near-recoveries is a classic fingerprint of short-selling. Alas, FBN Securities issued a buy rating and $260 price target for TSLA and the stock eventually recovered into the green shortly before a small dip prior to close. With positive news and over 5 million shares trading hands, the shorts just didn't have the ability to spook the longs today.
Yesterday's rise in Fidelity lending rate from 1% to 1.75% suggests that the shorts are slowly growing their presence again. Neroden's post above suggests that brokerage houses are still finding inexpensive shares to loan out, perhaps from longs buying on margin, where the brokerage doesn't have to pay interest to loan out the shares. What we have right now is a disconnect between the views of the shorts and the longs. Shorts feel that Tesla's quarterly delivery misses are actually due to sagging demand and that the Model 3, when it is finally delivered, will not be a profitable car. Longs believe strongly otherwise. It may take a dramatic event to shake the shorts, but I think that event is coming this year, and it may be either the Q1 delivery numbers in early April if they approach or exceed 30,000 vehicles, or it could be the Q1 ER, which would see very nice GM increases, due to economies of scale, topped off with nice revenue coming in from substantial Tesla Energy sales. Even some of the autopilot 2.0 revenue for Q4 vehicles that could not be counted in that quarter will become active in Q1 as more features are activated, and so we should see an ER the likes of which we've never seen before. Once a short squeeze starts, it becomes perpetuating as the rapidly-climbing share prices forces many shorts to buy to cover as margin calls come flooding in. We live in interesting times.
Right now, the short term is getting somewhat hard to call. The rally may indeed still have legs, but if it pauses then the shorts will do their best to lower the price. Their efforts will be nowhere near as successful as in pre-November months, however, judging by recent trading. Look at today's trading, for example. Even with morning selling pressure, buyers returned at 222 and held the stock at that point. With the market's reaction to Tesla's 4Q ER remaining a question mark at this point, I personally wouldn't want to be either on the sidelines or holding calls that expire before the potential magic of Q1 takes over. The year ahead looks extraordinary, but we may pass through some turbulence in the next three months, so please stay alert and keep those seat belts snugged, just in case. For the next three months, much depends upon news of Tesla making progress with TE, with Model 3, and with Q1 production and deliveries. Investors may continue to bid TSLA up with regular feedings of information about progress, but I'm cautious about investing on a timeline that depends upon such expectations.
Today looked like a classic short attack on opening with 132,000 shares to short drawn down from Fidelity this morning and an impressively large trading of 163,000 shares during the first minute, followed by 48,000 shares two minutes later and 25,000 shares shortly thereafter. The downward spikes with immediate near-recoveries is a classic fingerprint of short-selling. Alas, FBN Securities issued a buy rating and $260 price target for TSLA and the stock eventually recovered into the green shortly before a small dip prior to close. With positive news and over 5 million shares trading hands, the shorts just didn't have the ability to spook the longs today.
Yesterday's rise in Fidelity lending rate from 1% to 1.75% suggests that the shorts are slowly growing their presence again. Neroden's post above suggests that brokerage houses are still finding inexpensive shares to loan out, perhaps from longs buying on margin, where the brokerage doesn't have to pay interest to loan out the shares. What we have right now is a disconnect between the views of the shorts and the longs. Shorts feel that Tesla's quarterly delivery misses are actually due to sagging demand and that the Model 3, when it is finally delivered, will not be a profitable car. Longs believe strongly otherwise. It may take a dramatic event to shake the shorts, but I think that event is coming this year, and it may be either the Q1 delivery numbers in early April if they approach or exceed 30,000 vehicles, or it could be the Q1 ER, which would see very nice GM increases, due to economies of scale, topped off with nice revenue coming in from substantial Tesla Energy sales. Even some of the autopilot 2.0 revenue for Q4 vehicles that could not be counted in that quarter will become active in Q1 as more features are activated, and so we should see an ER the likes of which we've never seen before. Once a short squeeze starts, it becomes perpetuating as the rapidly-climbing share prices forces many shorts to buy to cover as margin calls come flooding in. We live in interesting times.
Right now, the short term is getting somewhat hard to call. The rally may indeed still have legs, but if it pauses then the shorts will do their best to lower the price. Their efforts will be nowhere near as successful as in pre-November months, however, judging by recent trading. Look at today's trading, for example. Even with morning selling pressure, buyers returned at 222 and held the stock at that point. With the market's reaction to Tesla's 4Q ER remaining a question mark at this point, I personally wouldn't want to be either on the sidelines or holding calls that expire before the potential magic of Q1 takes over. The year ahead looks extraordinary, but we may pass through some turbulence in the next three months, so please stay alert and keep those seat belts snugged, just in case. For the next three months, much depends upon news of Tesla making progress with TE, with Model 3, and with Q1 production and deliveries. Investors may continue to bid TSLA up with regular feedings of information about progress, but I'm cautious about investing on a timeline that depends upon such expectations.
Last edited:
Today was a positive but rockin' and rollin' day, which is a perfect opportunity for rolling forward option calls and getting your portfolio in order. At the end of 2016 TSLA closed at 213.32 and this week TSLA closed at 229.01, a very nice gain for the week. While one would expect to see net covering by the shorts, the current interest rate of 2.25% suggests that if there's growth of short positions, it is rather small growth. With a high level of trading by shorts (60% of TSLA trading yesterday, according to www.shortanalytics,com), we see the shorts as split between some starting to cover and some doubling-down in an effort to stop the rally. A couple days ago Igor Dusaniwsky said TSLA short holdings hit a record $8.1 Billion (though the increase of TSLA stock price probably had more to do with it than minor increase is short holdings). Bottom line: we continue to march towards a rally inspired by short covering or a full-fledged short squeeze, but nobody really knows when that will happen. I would say there's evidence by the high shortanalytics numbers that once the shorts stop selling into new positions we will see net covering and that net covering might give more legs to the current rally. Strong guidance given at the 4Q ER could also propel the stock upward in the near future.
Much of the march upward for TSLA has been aided by a positive macro market. The negative scenario would be negative macros causing the rally to pause, which could bring short sellers back in and cause some sagging of the stock in the short term. I honestly don't know where TSLA is going for the next three months and so I have positioned my portfolio to rise nicely if the rally continues or to ride out the storm or becalmed state during the winter months, should that happen instead.
Conditions:
* Dow up 65 (0.32%)
* NASDAQ up 33 (0.60%)
* TSLA 229.01, up 2.26 (1.00%)
* TSLA volume 5.4M shares
* Oil 53.67, down 0.09 (0.17%)
* Morning's Fidelity short share drawdown or (covering) and interest rate: (58,000) shares covered, interest up from 1.75% to 2.25%
* Yesterday's www.shortanalytics.com percentage of TSLA trading done by shorts: 60%
This morning we saw zero shares of TSLA available to short at IB and only 750 shares at Fidelity, which suggested that shorts would have limited ammo for a flight today, but a battle did develop for holding 230 during the morning hours, and an afternoon toboggan run towards the close looked like it would take the day's gains with it, but longs stepped back in and brought the stock above 231 for its close. The next big resistance is expected about 235, and if this level is breached, many technically-oriented buyers will presumably jump in.
Macros have been kind lately, with the DOW flirting with 20,000 but losing ground today and the NASDAQ climbing slightly.
One question right now is why are shares to short so difficult to find and if they're so scarce, why did the interest rate just drop? We haven't seen enough covering to deplete the supply and one explanation to the availability question might be that some longs are starting to retrieve their shares from shorts, which of course puts pressure on the shorts. Further, the shorts showing more covering than shorting this morning indicates that losses by shorts last week are taking a toll.
Conditions:
* Dow down 76 (0.38%)
* NASDAQ up 11 (0.19%)
* TSLA 231.28, up 2.27 (0.99%)
* TSLA volume 4.0 M shares
* Oil 51.79, down 2.20 (4.07%)
* Morning's Fidelity short share drawdown or (covering) and interest rate: (138,000 shares), interest decreased from 2.25% to 2%
* Friday's www.shortanalytics.com percentage of TSLA trading done by shorts: 58%
Correction: we haven't seen enough "shorting" to deplete the supply.
Www.shortanalytics.com lists the percentage of trading today by TSLA shorts as 55%.
Www.shortanalytics.com lists the percentage of trading today by TSLA shorts as 55%.
So I was thinking about your question, "why did interest rates drop?"
My thought was that they are getting good interest rates elsewhere so they can give their short customers a break (see above for why I think brokerages like shorts).
So the question is where? Margins?
I don't know enough about margin accounts to say whether this is a possibility, but just thinking out loud...
My thought was that they are getting good interest rates elsewhere so they can give their short customers a break (see above for why I think brokerages like shorts).
So the question is where? Margins?
I don't know enough about margin accounts to say whether this is a possibility, but just thinking out loud...
Zhelko Dimic
Careful bull
When MM sell puts, their natural counter action is to short (appropriate quantity of) stock to keep delta neutral - after all, they mostly make money on spread, time value and volatility plays, not by taking directional bets.
MMs may be selling so many puts nowadays that they need to reserve copious amounts of stock available for shorting, even if they don't use it all. This would align well with max pain drifting upwards last few days. More puts that are sold, as compared to calls, the more will max pain push upwards. And remember, retail mostly bets by buying puts, so everyone negative on Tesla may be buying lots of puts nowadays waiting for that moment that Tesla starts falling and they get rich
But puts are still cheap. I've been avoiding selling puts because the price hasn't been bid up high enough for my taste. So that scenario doesn't work.
I still think there are more bulls buying TSLA on margin and providing a larger supply of shares to lend out.
I still think there are more bulls buying TSLA on margin and providing a larger supply of shares to lend out.
Today was a classic short-selling day put forward in an effort to derail the up cycle and get TSLA heading back down. You can see the classic dips with near-immediate recoveries. Nearly 220,000 shares to short were drawn down at Fidelity this morning. Originally, not many were drawn down, but when the downtrend began around 10:30 am, the shorts loaded up on shares and the games began. In pre-November trading, the descent would likely have carried into close, but in the uptrend-environment that TSLA presently finds itself, buyers pushed the stock up to recover most of its losses prior to close.
For short sellers, the problem with a day like today is that there's no real opportunity to buy in later in the day and take a profit on the short-selling. Thus, the available shares of TSLA to short have been drawn down but likely not replenished today, and the short sellers are sitting on small losses, which will turn into big losses if TSLA starts heading higher again. I continue to believe that big holders are loading up slowly on TSLA shares because of the steady increase in price throughout the afternoon hours.
Selling well in excess of 220,000 shares in order to drop the price of TSLA $1.40 is not very efficient for the shorts. They will likely scale back their selling if the results continue to be so meager.
A replay of today is entirely possible for tomorrow. Let's see what develops.
Conditions:
* Dow down 32 (0.16%)
* NASDAQ up 20 (0.36%)
* TSLA 229.87, down 1.41 (0.61%)
* TSLA volume 3.7M shares
* Oil 50.74, down 1.22 (2.35%)
* Morning's Fidelity short share drawdown or (covering) and interest rate: 219,900 shares, 2%
* Yesterday's www.shortanalytics.com percentage of TSLA trading done by shorts: 55%
* News: Tesla announced that it has hired Chris Lattner to be Vice President of Autopilot software. Chris has been one of the shining stars at Apple and will be a very positive contribution at Tesla.
Last edited:
My biggest concern about the inauguration is civil strife. Washington is going to be filled with protesters who would love to see Trump overreact and get a bloody nose. We may see some dip in macros a few days ahead of the event and we likely would see a bigger dip if Washington violence led to violence in other cities. If we get through the inauguration and nothing serious happens, then the macros would likely go up in a moment of relief, if there had been a dip. Overall, though, "this too shall pass." I'm focused on April and May right now for Q1 delivery numbers and Q1 ER, and there's plenty of time for a dip to come and go between now and then. I'm really not a fan of short-term trading with TSLA unless you really know something the market doesn't because the amount of control of the SP: by big players makes this stock very difficult to predict in the short run. We're pawns in a much bigger game, but we can still be sumptuously rewarded when our side wins.
Zhelko Dimic
Careful bull
Cheap puts actually fits very well with my theory. Price elasticity would make retail TSLA detractors buy puts in bulk, seeing an opportunity.
MMs don't see puts as cheap or expensive. Option price is based on probability of price heading in that direction, so it's always 'right-priced', due to competetion with other MMs, and again, MM don't care where stock moves; as long as they can retain their neutral delta, they're oblivious to reasonable SP moves
This... is nonsense. The market maker doesn't want to get caught with a huge unhedged position in options. Ideally the market maker would have retail sellers for all the puts they sell and be left with a zero balance at the end of the day. If they don't, they raise the price to account for the risk of being left "holding the bag". If they're already holding a lot of open positions, they raise the price further to account for the risk of being left "holidng the bag".
Basically whenever the options market is unbalanced, lots more non-MM demand on one side than the other, the market makers will demand higher premiums for making the market. This is really utterly normal.
The market makers have other ways of hedging their put sales, but those entail other forms of risk. They could short-sell, but (a) that really only works for at-the-money puts, and (b) that exposes them to risk if the stock goes up. They could short-sell *and* buy calls to hedge out (b), but that costs them money -- it's worth seeing whether they're doing that -- that would mean they're bidding up the price of calls. They can also use stock futures and calls (better), but on the whole they don't; the stock futures market is small.
Anyway, my point is that market makers DO see puts as cheap or expensive. If there's a huge, unbalanced demand for puts they will raise their prices to account for their risk of not being in a market-neutral position.
Similar threads
- Locked
