Hi, I’m a short seller

[daniel]

Actually, here's what happened to me: I had 5 contracts of TSLA200117C250. (Calls with a $250 strike price, expiring on the 17th of this month.) I bought them for $18.10, spending $9,050 using a $10,000 account I had just opened. I sold them before the last earnings and bought puts, because I expected a brief run down. The puts lost me around $7,000 that evening, but worse: it also lost me around $19,000 which I would have had in my account that evening if I had kept the calls. (Essentially it would have tripled my account overnight.)

But it's worse than that, because those same calls... The ones I had bought for $9,050 (at $18.10) actually sold for $123,000 (at $246) a couple days ago... That would have been $113,950 profit, from a $10K account, in only 2-1/2 months. (And since I believe it'll go over $500 before they expire and they're in the money, it would be even better at expiration.)

For some reason I still keep looking at the price of "the calls I should have held"... Because I guess I enjoy self-torture. Luckily they expire in 8 days so I will no longer be able to check.

The sting of this experience has made me more of a "holder" than a "trader". I'm holding calls again now, trying to get back my original $10,000.

The simple lesson here is that when you gamble you might win and you might lose. I bought my TSLA shares for around $35 or $40 after I got my Roadster, because I loved the car so much. I also bought some shares in Solar City when it went public because I liked what they were doing. And I bought some solar bonds so that somebody who didn't have the capital could get solar panels. Then those Solar City shares become an odd number of TSLA so I had more of those. The result is that if I sold my TSLA shares now I'd make a bundle. But I don't need the cash and I like being a part owner of Tesla.

My regret is that I didn't put everything I had into TSLA back when I bought those first shares. I could have afforded a house on a cliff overlooking the ocean in Makena instead of a house without an ocean view in North Kihei. I could have a chauffeur and a chef and maybe even a bevy of bathing beauties. But the problem is that when TSLA was $40/share it was uncertain whether or not the company would stay afloat. And I'm not a risk-taker. Day-trading, whether it's shorts, longs, puts, calls, margins, derivatives, or commodities, is gambling, just like Vegas, but without the free drinks.

 

[MichaelP90DL]

The simple lesson here is that when you gamble you might win and you might lose. I bought my TSLA shares for around $35 or $40 after I got my Roadster, because I loved the car so much. I also bought some shares in Solar City when it went public because I liked what they were doing. And I bought some solar bonds so that somebody who didn't have the capital could get solar panels. Then those Solar City shares become an odd number of TSLA so I had more of those. The result is that if I sold my TSLA shares now I'd make a bundle. But I don't need the cash and I like being a part owner of Tesla.

My regret is that I didn't put everything I had into TSLA back when I bought those first shares. I could have afforded a house on a cliff overlooking the ocean in Makena instead of a house without an ocean view in North Kihei. I could have a chauffeur and a chef and maybe even a bevy of bathing beauties. But the problem is that when TSLA was $40/share it was uncertain whether or not the company would stay afloat. And I'm not a risk-taker. Day-trading, whether it's shorts, longs, puts, calls, margins, derivatives, or commodities, is gambling, just like Vegas, but without the free drinks.

Or the comped suite.

 

[TheTalkingMule]

Mods, please change thread title to "Hi, I'm a male prostitute."

 

[daniel]

Or the comped suite.

You only get the comped suite if you're a high-roller. I think you get free drinks if you're just a garden-variety gambler. I once went there to see Cirque du Soleil. You have to walk all the way through the casino to get between the front doors and the elevators to the guest rooms. I saw people sitting at tables where the minimum bet was $100.

If you don't have inside information, your odds in Vegas are probably better than your odds day-trading on the stock, futures, or commodities markets. And as noted by others, shorting can lose you a lot more money than trading long. Buying and holding stocks and bonds for the long term has risks, but if the companies are well-run those risks are small. And smaller yet if you buy low-cost indexed funds.

Shorting is high-risk gambling. And shorting a company that makes electric cars just because you prefer cars that make a lot of noise, is downright reckless. TSLA has historically been a very volatile stock and there's money to be made day-trading it if you get the timing right. But you're more likely to get the timing wrong and lose money. I've never met anybody who admitted to losing money in Vegas or day trading on the market. So I'm skeptical when people tell me they routinely make money on either.

 

[AquaMan]

I've never met anybody who admitted to losing money in Vegas or day trading on the market.

Well now ya have. Nice to meet you. To be clear: I opened the account specifically TO GAMBLE. I can afford to lose the entire account and the potential for a big win is fun. I used to live in Vegas but I was never a table or slot gambler. The house always wins eventually. But with trading at least the odds are essentially even (minus commission) and you can at least pretend it's a game of skill. Of course, the odds are far against you if you're believing someone's hype. But since I own a car myself, I know they've got at least that part right.

Even when I bought the puts, I was expecting TSLA to go way up within a few years. Still do. I intended to reverse after earnings but I was expecting a brief drop after they reported, for reasons which seemed logical to me: They had fallen short on expected deliveries, and I figured the financials would be reported to do the same, pushing it down for a dip, so I wanted to ride said dip... But then: "Whaaaa??? They under-delivered but over-profited??? ZOINKS!" So, ya never know... unless you know.

Shorting is high-risk gambling.

You can bet against a stock with limited risk buying puts. The max you lose is the max you buy in for, but you can profit far beyond that.

 

[MichaelP90DL]

You only get the comped suite if you're a high-roller. I think you get free drinks if you're just a garden-variety gambler. I once went there to see Cirque du Soleil. You have to walk all the way through the casino to get between the front doors and the elevators to the guest rooms. I saw people sitting at tables where the minimum bet was $100.

If you don't have inside information, your odds in Vegas are probably better than your odds day-trading on the stock, futures, or commodities markets. And as noted by others, shorting can lose you a lot more money than trading long. Buying and holding stocks and bonds for the long term has risks, but if the companies are well-run those risks are small. And smaller yet if you buy low-cost indexed funds.

Shorting is high-risk gambling. And shorting a company that makes electric cars just because you prefer cars that make a lot of noise, is downright reckless. TSLA has historically been a very volatile stock and there's money to be made day-trading it if you get the timing right. But you're more likely to get the timing wrong and lose money. I've never met anybody who admitted to losing money in Vegas or day trading on the market. So I'm skeptical when people tell me they routinely make money on either.

I think the key to winning in Vegas is to own casino stock.

 

[daniel]

... But with trading at least the odds are essentially even (minus commission) and you can at least pretend it's a game of skill. ...

Which ignores one point: The professionals know the market better than we peons do, and they may have information we lack, which may be insider information, or may just be the result of having very fast news sources.

 

[AquaMan]

The professionals know the market better than we peons do

I think that's true-ish, but these days I'd say it's more that their very fast trading algorithms know the markets better than we do. I've seen them steal stop loss orders. Be careful with those because the marketmakers see them... With a low volume stock (TSLA isn't one of those) the marketmakers can rapidly drop the price by selling, grab your shares, then buy back and the price is back as if nothing happened... they got cheap shares and instant profit.

I personally use TradeStation, which has its own programmable algorithms, so you can simulate a stop loss with an order which doesn't get sent to the market until something triggers it.

Ultimately though, there are always fundamentals and other "facts", and our individual instincts about the leadership of a given company, and how we feel the car-buying and solar-buying market will respond to what they offer. In that regard, our instincts can be as valid as any expert's.

I think the best reason to believe in the future of Tesla is the experience of owning a car, and a lot of these experts just don't care to own one. Let them eat carbon.

 

[daniel]

I think that's true-ish, but these days I'd say it's more that their very fast trading algorithms know the markets better than we do. I've seen them steal stop loss orders. Be careful with those because the marketmakers see them... With a low volume stock (TSLA isn't one of those) the marketmakers can rapidly drop the price by selling, grab your shares, then buy back and the price is back as if nothing happened... they got cheap shares and instant profit.

Thank you for adding another argument to bolster my point: Ordinary folks are at an extreme disadvantage when they venture into day-trading. Which is why I don't do it.

Ultimately though, there are always fundamentals and other "facts", and our individual instincts about the leadership of a given company, and how we feel the car-buying and solar-buying market will respond to what they offer. In that regard, our instincts can be as valid as any expert's.

Which is why we can do well when we buy and hold: The company will go up in the long term, and when you're long for the long haul you are not affected by the fluctuations that day-traders depend on.

 

[AquaMan]

Thank you for adding another argument to bolster my point: Ordinary folks are at an extreme disadvantage when they venture into day-trading.

More than happy to support a position with which I agree.

 

[AquaMan]

But it's worse than that, because those same calls... The ones I had bought for $9,050 (at $18.10) actually sold for $123,000 (at $246) a couple days ago... That would have been $113,950 profit, from a $10K account, in only 2-1/2 months. (And since I believe it'll go over $500 before they expire and they're in the money, it would be even better at expiration.)

Aaaand... there it is, as TSLA broke $500 this morning. So, "the calls I should have held" would have yielded $118,000 profit as of the last sold contract... and climbing. On a $10k account, in under 3 months.

The term "oops" can hardly be overstated.

 

[daniel]

Coulda woulda shoulda. The whole point is that people like us lose money if we attempt day-trading because people with more information and faster trading systems have the advantage over us. I could list many things I could have done that would have made me obscenely wealthy today. From buying Bitcoin when it was 10¢ to putting my entire portfolio into TSLA when it was $40 (and nobody really knew if the company could stay afloat). I met a guy who turned down an opportunity to get in on the ground floor of GoPro. A high-school friend's grandmother was talked out of buying 3M when it was a little start-up company. I could have bought stock in Apple when there were more small computer companies than you could shake a stick at and been a billionaire today. Or I could just as easily have bought one of the others that were indistinguishable at the time and lost everything. Kaypro was actually a better computer back then.

There are far more ways to lose money than to make it, but nobody remembers those. We remember 3M and Apple and GoPro and say "I shoulda, woulda, coulda!"

 

[SOULPEDL]

I was looking for posts by @ShortSeller, the OP. Hmm...
Pleased to meet you, I'm TSLA Long. I still haven't sold and no plans, but maybe some in '21 for Cybertruck, we'll see.
Cheers!

 

[ggr]

I was looking for posts by @ShortSeller, the OP. Hmm...
Pleased to meet you, I'm TSLA Long. I still haven't sold and no plans, but maybe some in '21 for Cybertruck, we'll see.
Cheers!

Banned for misinformation, long ago...

 

[cpa]

Coulda woulda shoulda. The whole point is that people like us lose money if we attempt day-trading because people with more information and faster trading systems have the advantage over us. I could list many things I could have done that would have made me obscenely wealthy today. From buying Bitcoin when it was 10¢ to putting my entire portfolio into TSLA when it was $40 (and nobody really knew if the company could stay afloat). I met a guy who turned down an opportunity to get in on the ground floor of GoPro. A high-school friend's grandmother was talked out of buying 3M when it was a little start-up company. I could have bought stock in Apple when there were more small computer companies than you could shake a stick at and been a billionaire today. Or I could just as easily have bought one of the others that were indistinguishable at the time and lost everything. Kaypro was actually a better computer back then.

There are far more ways to lose money than to make it, but nobody remembers those. We remember 3M and Apple and GoPro and say "I shoulda, woulda, coulda!"

Yeah, and I could have purchased 25 shares of BERK in 1976 when I cashed in all my Series E bonds too. But I didn't.

 

[daniel]

The older you are, the richer you'd be now if you knew then what you know now. But for every billionaire who bought the right thing at the start, there are a million people who are broke because they bought something that at the time was indistinguishable from the one that succeeded.

I have enough to enjoy my retirement because I've always lived by the words of Hermann the German from Pushkin's The Queen of Spades. "I refuse to risk the necessary in pursuit of the superfluous." (It's a great short story, by the way.)

 

[mrwuffles]

The simple lesson here is that when you gamble you might win and you might lose. I bought my TSLA shares for around $35 or $40 after I got my Roadster, because I loved the car so much. I also bought some shares in Solar City when it went public because I liked what they were doing. And I bought some solar bonds so that somebody who didn't have the capital could get solar panels. Then those Solar City shares become an odd number of TSLA so I had more of those. The result is that if I sold my TSLA shares now I'd make a bundle. But I don't need the cash and I like being a part owner of Tesla.

My regret is that I didn't put everything I had into TSLA back when I bought those first shares. I could have afforded a house on a cliff overlooking the ocean in Makena instead of a house without an ocean view in North Kihei. I could have a chauffeur and a chef and maybe even a bevy of bathing beauties. But the problem is that when TSLA was $40/share it was uncertain whether or not the company would stay afloat. And I'm not a risk-taker. Day-trading, whether it's shorts, longs, puts, calls, margins, derivatives, or commodities, is gambling, just like Vegas, but without the free drinks.

I wouldn't say just like Vegas. Vegas is guaranteed to make the average person lose money. They have regulations for the amount they have to give back, which is always under 100%. Any investing is gambling in a sense. If you buy a property, you're gambling you can hold onto it with no revenue if it won't remain occupied during a downturn. Some gambles are riskier than others. Bigger risks mean bigger rewards or bigger losses. I agree at $35 and without the hindsight that we have now of Elon's capability of execution at SpaceX, too risky (for me) to go all-in. But at
$180 last year, I would have had we not been qualifying for a house.

We were also going through house qualifying years earlier on the run-up from $35-$120. I have some luck when it comes to TSLA breakouts . Can't complain too much this time around since my call options that were down 50% are up 200%, but I'd have enough to pay off the mortgage instead of pay off the Tesla.

The real uncertainty I have now is whether to go all-in now that my $ is freed up, or wait for a correction. But it's too hard to time.

 

[daniel]

I wouldn't say just like Vegas. Vegas is guaranteed to make the average person lose money.

There is no certainty in Vegas or the market that any given person will lose money. The rare person comes out ahead in both. But there is a guarantee in both vegas and the day-trading market that outsiders will lose money on average. This is because just as the odds in Vegas are designed to make money for the casino, the insiders and high-tech traders in the market are constantly taking money out, so ordinary people have to lose (on average!) just as in vegas.

The real difference is that in the markets you can choose to buy mutual funds and hold them for the long term.

The real uncertainty I have now is whether to go all-in now that my $ is freed up, or wait for a correction. But it's too hard to time.

If you don't have inside information, and you don't have high-speed trading capability with fiber-optic cable direct to, and close to, the stock exchange, you will always lose in the long term investing for the short term. Buying a solid company and holding onto it is likely to yield profit in the long term. But any individual company, especially one as volatile as Tesla, is a risky investment. If you want to make a lot of money you have to take a lot of risk, and you're more likely to lose than to win because people with faster trading capability and more knowledge will always be skimming off most of the short-term money there is to be had.

Indexed mutual funds are the wise investment.

 

[ZeApelido]

This thread has not turned out well for some.

I wonder what their current opinions are.

 

[MXWing]

This thread has not turned out well for some.

I wonder what their current opinions are.

One could still question Tesla’s valuation, and frankly the entire market right now. DASH, ABNB IPOs were ridiculous.

Knowing something and fighting something are two different things.

Tesla no doubt is getting corrected if the whole market is.

Just hope those in TSLA built a sufficient lead to weather when/if it does happen.