Long-term TSLA Investment Strategy

[AlMc]

One other thing to consider is the Jan '17 LEAPS should come in August, I believe.

About 3 months ago I did convert some stock to LEAPS. I went for a combo of OTM Jan'15 and Jan '16 LEAPS. Since I did this switch the LEAPS were down 50%+ when we dropped to the 180-190 level while the stock dropped about 20%. I am confident that those LEAPS will go 'green' with a good Q2 run up (Elon...GF announcement..please:wink or great Q3 ER but it does show you how much more risk you will be taking.

Reason for edit: Note: These funds are all in IRA

 

[TSLAopt]

One possible strategy is to keep the 10k in cash and pick a price drop (e.g 10%? 15%? 30%?) to buy medium term or short term options off of that drop.

For example, the ATH is 265 and so if you said when Tesla drops 15% (to 225) spend 5k on medium term options (6 months-1 year out) and if it drops another 15% further (185) spend the last 5k on shorter term options (1-3 months out) at that price point.
this is just an example of specific rules that would have worked in the past very well (may not work in the future) but you can make up your own rules/plan. They key is to follow it and not alter your plan as you see your PNL go way up or way down.

TSLA is very volatile and I would expect it to continue being volatile with violent price swings both up and down for the foreseeable future.

 

[MikeC]

I understand that I lose everything if its under 110 at Jan 2016. Can I avoid this in advance if I see, lets say a few months before hand, that the stock is currently or will likely be under 110?

If you see it, so does the market. That means the underlying TSLA price will have already fallen and the option will have fallen a correspondingly greater percentage. You're free to sell the option anytime at its current market value.

Is there any difference if the stock is below or above 223 at the expiration date, assuming its at least above 110? So lets say 200 vs 400 at expiration?

Nothing specific about 223. If it is at 224 at expiration, you will get $11,400 and if it is at 222, you will get $11,200. At 200, you would get $9000 and at 400 you would get $29,000.

 

[DaveT]

One other thing to consider is the Jan '17 LEAPS should come in August, I believe.

I believe Jan17 LEAPs come out in November.

About 3 months ago I did convert some stock to LEAPS. I went for a combo of OTM Jan'15 and Jan '16 LEAPS. Since I did this switch the LEAPS were down 50%+ when we dropped to the 180-190 level while the stock dropped about 20%. I am confident that those LEAPS will go 'green' with a good Q2 run up (Elon...GF announcement..please:wink or great Q3 ER but it does show you how much more risk you will be taking.

Reason for edit: Note: These funds are all in IRA

My general thoughts are if your funds are in an IRA or other tax-deferred account, then it can make sense to try to "time" the market (in some sense) and trade in and out of the stock. It's not easy but it can be done. Basically, when the stock is severely undervalued, you change your stock into LEAPs. And when the stock becomes fairly valued then you start switching your LEAPs into stock. When stock becomes exuberantly valued, you keep it in stock. You keep holding stock until when/if the stock becomes severely undervalued and then you switch everything to LEAPs. It doesn't have to be that precise, but I think you get the point. The problem is most people get freaked out when the stock is severely undervalued and they don't want to take risky moves. In other words, sentiment sways most buyers so they want to take more risks when the stock is looking good and less risk when things look ugly. And that's why it's difficult. You need to objectiveness to be able to discern when the stock is severely undervalued because there will be a good reason for the stock to be down and most people will think it's going down further. I think it requires some good skills on how to establish value on a company like Tesla, some technical skills, and discernment to know if the long-term story is affected or not when a stock is being clobbered. Actually come to think of it, that is a lot of skills. It's probably more difficult than it appears. Anyway, when people are switching their stock to LEAPs when the stock is fairly valued or even a bit exuberantly valued, that's when I start shaking my head in confusion. But everyone has a different way to invest and that's their choice. I just like to have very, very good odds when I enter an investment and since LEAPs/options have inherent risk/premium I think they are a great leverage instrument in times when you are expecting a super fast rise in the stock price in a relatively short period of time (ie., under a year or year and a half).

When your holdings are in a taxable account, then it becomes more complicated because it depends on your tax rate. But the lower your tax rate, I think it could make sense to try to use LEAPs but again I think it's best done when the sentiment is really bad, the charts are "broken", and we've seen a very big drop but the long-term story of the company hasn't changed (or is getting better). This gives you the best chance for outsized gains, which you'll need to justify selling your stock holding and paying taxes before buying the LEAPs.

I also think sometimes people undervalue the value of common stock. Common stock is great because it never expires (unlike options). When things are really bad (and you still believe in the long-term story of the company) you can hold on without penalty. However, with options if things get really bad around your options expiration, you're basically screwed. Sure you can roll out your LEAPs at that time but your account could have been so decimated there might be very little money left in it. That's the inherent risk with OTM options. And even with deep-in-the-money options, your basically getting a bit more leverage than stock but you're going to be paying for it since you're going to be paying taxes when you sell your stock (before purchasing the options) and after your sell your LEAPs/options (unless you exercise all of them). With stock you can defer taxes for a very, very long time (that is until you sell your stock).

Another great thing with common stock is that you can use margin for other purposes (options aren't marginable). (Ie., if you're buying a house you can beat out all the other offers by paying full cash and then once the house closes you can finance it into a mortgage and repay your margin.)

Anyway, I don't mean to sound bearish on options/LEAPs. I think they are amazingly powerful instruments and I've used major dips to buy LEAPs on more than a few occasions. I just think it's probably best for most people probably to just keep common stock and to keep it for a long time. For those more risk-prone, wait for a big buying opportunity where everyone (most everyone at least) is scared out of their pants and it looks like TSLA has no bottom, and make a bold move with LEAPs. That's how you make money. Or if you don't make money, you'll lose a lot money depending on how things turn out.

 

[DaveT]

Not sure how I would even approach creating such a spreadsheet. I'm good with excel, but have no clue what to enter. Do you or anyone else here already have such a spreadsheet that I could use to manipulate for my situation?

You can start out your spreadsheet quite simple.

1. Calculate how much revenue you'll be gaining from selling your stock. Enter you tax rate. Calculate net cash after taxes.

2. Choose a LEAP (ie., choose a strike price and find the cost of option). It doesn't matter what strike price or date initially, just enter what strike price/option you're most attracted to.

3. On the columns, choose various stock prices that the stock could end up at expiration. For example, if you choose Jan16, then enter various stock prices the stock could be at on Jan16 - ie., 150, 200, 250, 300, 350, 400, 450. Then, under each column calculate how much you could sell your LEAP for at expiration if it closes at that price (basically take stock price and minus strike price and that will be your gain, times it by # of options). Then, under the same columns calculate your net after paying taxes on the gains.

4. Then, under the same columns calculate how much your stock would be worth at all the various stock prices. You can add net after taxes if you want as well.

And then you can also add the probabilities you think each stock price scenario to be.

Now on one spread sheet you can compare at various stock price scenarios your chosen strike/expiry option vs common stock.

Then, add more strike prices to the spreadsheet as new rows and compare them to holding common stock by following the instructions above.

If this doesn't make sense, just let me know and I can help create a quick-and-dirty spreadsheet for you to get started with.

- - - Updated - - -

Thanks, the 2 year max has been pointed out. Sounds like the best option is to roll them before expiration.

You probably already know this but "rolling out" is simply selling your existing options (which triggers a taxable event) and buying further out options.

 

[DaveT]

In other words, if TSLA goes to $440 by 2016:
$50k shares limits me to $50k profit and holds up my original $50k for those 2 years.
$10k in leaps could limit (or extend) losses to the entire $10k I'm willing to lose and increase potential return several fold, right?

Sorry I missed this since I was reading on my phone earlier. Anyway, let's look at this a bit closer. (btw, thanks for the numbers since it makes it more concrete.)

In order for you to make several fold if TSLA goes to $440 by Jan16, then you'll probably need to buy Jan16 320 strike options for $20/each.

So, if TSLA is at $440 on Jan16 then each option is worth $120 ($440 stock price - 320 strike price). So that would be a 5x gain.

Let's make it more concrete.

With $10,000 capital, Jan16 320 strike option would cost $20 and each contract controls 100 shares so you could buy 5 contracts.

If/when TSLA is at $440 on Jan16, then you could sell those 5 contracts for $12,000 each ($120 x 100) for a total of $60,000. Your profit would be $50,000, which you would need to pay long-term capital gains (federal) and california state income tax. So if I assume your taxes are 25% then you'd pay $12,500 in taxes. So your total money in the end would be $47,500. (You could also choose to sell 4 and exercise 1 contract, but that's for another discussion)

Now, let's compare that to just holding common stock.

Let's say that you have $50,000 worth of TSLA stock, probably around 225 shares (at today's price). If/when the stock price is $440 in Jan16, then your stock will be worth 225 shares x $440 = $99,000. That would be a $49,000 gain. And then if you liquidated your stock you'd need to pay your taxes on the gains (depending on your cost basis). But technically, you're not forced to sell in Jan16 because they're stock, so you could just hold and defer taxes.

When you compare these two scenarios, then holding $10k in Jan16 320 strike LEAPs is the better choice since the $47,500 gain is post-tax vs the $49,000 gain pre-tax for your stock.

However, the situation changes drastically if/when TSLA is lower than $440 on Jan16.

Let's say TSLA is at $300 on Jan16. Then, your LEAPs would be basically worthless upon expiration on Jan16. You've lost your $10,000 completely.

But if you held your shares you'd have a nice profit of 225 shares x $75/share = $16,875. A 34% return. Not too shabby for 1.5 years of investment.

Let's take something a bit higher. Let's say TSLA is at $350 on Jan16.

Your LEAPs would be worth $30 ($350 stock price - $320 strike) x 5 contracts (or 500 option shares) = $15,000 gain. Minus 25% tax. $11,250 net.

Your common stock would be worth $350 x 225 shares = $78,750. Or $28,750 gain from your current $50,000 position. And you could defer your taxes by holding.

So in this case your far better off just keeping your stock in TSLA.

The situation is far more complicated than this, because if you sold your stock now and invested $10k in LEAPs, then you would have the remaining money to invest or do something with. So that could have value as well. Just how much value, that is something that could and should be calculated using various scenarios.

But anyway, from this example in order to make a 5x pre-tax gain with Jan16 LEAPs assuming TSLA is at $440 upon expiration, then you'd have to take quite a big risk with buying Jan16 320 strike options for $20. This means if TSLA ends lower than $340 on Jan16 expiration then you'd lose some of your initial $10k investment, and if ends at $320 or lower then you'd lose all of the $10k investment.

Now, risk/reward is in the eye of the beholder. If you like these odds (ie., you're confident of your price estimate or you don't mind losing $10k), then it could be a good deal/decision for you.

I think my point is that the ultimate decision is up to you according to your own set of risk/reward values and price projections, but the least you can and should do is to work out the numbers for various stock price scenarios to make sure you understand the risks/rewards clearly so you know what you're getting yourself into.

 

[DaveT]

ps., if you buy lower strike Jan16 LEAPs (ie., 250 strike) you will lower your risk but also drastically lower your reward. Working out the numbers on a spreadsheet will help you compare scenarios vs each other and also vs your common stock.

 

[Auzie]

1. So this does exist? How does one convert shares into leaps?
2. I think you're mistaken. realizing gains and paying taxes is maximizing there effect, lowering the principle investment by the taxes paid....
Also, such selling and then re-buying the same assets in a short time span (don't remember how long) as you described would be considered a "wash sale".... death and taxes my friend

1. Sell shares, buy leaps

2. Wash sale applies to losses, not profits. Stock refreshment is legitimate and useful strategy to minimize tax.

Scenarios below are simplified but they do illustrate the benefit of spreading the tax liability over a number of years rather than getting one hit.
I used Australian tax calculator, but principle is the same in any country.

Stock: 1000 TSLA shares
Scenario 1, spread tax
	buy	sell	profit	tax
2013	32	150	118,000	31,607
2014	150	250	100,000	24,947
2015	250	300	50,000	7,797
2016	300	350	50,000	7,797
			318,000	72,148
Sceanrio 2, one tax hit
	buy	sell	profit	tax
	32	350	318,000	116,647

 

[Chickenlittle]

Sorry I missed this since I was reading on my phone earlier. Anyway, let's look at this a bit closer. (btw, thanks for the numbers since it makes it more concrete.)

In order for you to make several fold if TSLA goes to $440 by Jan16, then you'll probably need to buy Jan16 320 strike options for $20/each.

So, if TSLA is at $440 on Jan16 then each option is worth $120 ($440 stock price - 320 strike price). So that would be a 5x gain.

Let's make it more concrete.

With $10,000 capital, Jan16 320 strike option would cost $20 and each contract controls 100 shares so you could buy 5 contracts.

If/when TSLA is at $440 on Jan16, then you could sell those 5 contracts for $12,000 each ($120 x 100) for a total of $60,000. Your profit would be $50,000, which you would need to pay long-term capital gains (federal) and california state income tax. So if I assume your taxes are 25% then you'd pay $12,500 in taxes. So your total money in the end would be $47,500. (You could also choose to sell 4 and exercise 1 contract, but that's for another discussion)

Now, let's compare that to just holding common stock.

Let's say that you have $50,000 worth of TSLA stock, probably around 225 shares (at today's price). If/when the stock price is $440 in Jan16, then your stock will be worth 225 shares x $440 = $99,000. That would be a $49,000 gain. And then if you liquidated your stock you'd need to pay your taxes on the gains (depending on your cost basis). But technically, you're not forced to sell in Jan16 because they're stock, so you could just hold and defer taxes.

When you compare these two scenarios, then holding $10k in Jan16 320 strike LEAPs is the better choice since the $47,500 gain is post-tax vs the $49,000 gain pre-tax for your stock.

However, the situation changes drastically if/when TSLA is lower than $440 on Jan16.

Let's say TSLA is at $300 on Jan16. Then, your LEAPs would be basically worthless upon expiration on Jan16. You've lost your $10,000 completely.

But if you held your shares you'd have a nice profit of 225 shares x $75/share = $16,875. A 34% return. Not too shabby for 1.5 years of investment.

Let's take something a bit higher. Let's say TSLA is at $350 on Jan16.

Your LEAPs would be worth $30 ($350 stock price - $320 strike) x 5 contracts (or 500 option shares) = $15,000 gain. Minus 25% tax. $11,250 net.

Your common stock would be worth $350 x 225 shares = $78,750. Or $28,750 gain from your current $50,000 position. And you could defer your taxes by holding.

So in this case your far better off just keeping your stock in TSLA.

The situation is far more complicated than this, because if you sold your stock now and invested $10k in LEAPs, then you would have the remaining money to invest or do something with. So that could have value as well. Just how much value, that is something that could and should be calculated using various scenarios.

But anyway, from this example in order to make a 5x pre-tax gain with Jan16 LEAPs assuming TSLA is at $440 upon expiration, then you'd have to take quite a big risk with buying Jan16 320 strike options for $20. This means if TSLA ends lower than $340 on Jan16 expiration then you'd lose some of your initial $10k investment, and if ends at $320 or lower then you'd lose all of the $10k investment.

Now, risk/reward is in the eye of the beholder. If you like these odds (ie., you're confident of your price estimate or you don't mind losing $10k), then it could be a good deal/decision for you.

I think my point is that the ultimate decision is up to you according to your own set of risk/reward values and price projections, but the least you can and should do is to work out the numbers for various stock price scenarios to make sure you understand the risks/rewards clearly so you know what you're getting yourself into.

Otm options probably require management and need to be monitored. Remember premise that he wants to put it away and not look for a long time. That is why I recommended deep in the money calls.

 

[RobotGrease]

1. Sell shares, buy leaps

2. Wash sale applies to losses, not profits. Stock refreshment is legitimate and useful strategy to minimize tax.

Scenarios below are simplified but they do illustrate the benefit of spreading the tax liability over a number of years rather than getting one hit.
I used Australian tax calculator, but principle is the same in any country.

Stock: 1000 TSLA shares
Scenario 1, spread tax
	buy	sell	profit	tax
2013	32	150	118,000	31,607
2014	150	250	100,000	24,947
2015	250	300	50,000	7,797
2016	300	350	50,000	7,797
			318,000	72,148
Sceanrio 2, one tax hit
	buy	sell	profit	tax
	32	350	318,000	116,647

You can't buy another 1000 shares with the capital from selling 1000 shares.... even if after 12months, you are losing capital gains taxes and so your buying power decreases (loss of principle). Also, you arent using consistent tax percentages...

Here are the numbers if using 25% tax consistently and reducing the number of shares you can buy after each sale by 25%. The numbers speak for themselves... You are correct, you have minimized taxes...but at the expense of even more greatly minimizing overall gains. Not sure why you would give up post tax profits for fear of paying those taxes...

Stock: Starting with 1000 TSLA shares
Scenario 1, spread tax
	buy	sell	profit	tax
2013	32	150	118,000	29,500
2014	150	250	75,000	18,750
2015	250	300	28,150	7,038
2016	300	350	21,100	5,275
			242,250	60,563
		post tax profit	181,688
Sceanrio 2, one tax hit
	buy	sell	profit	tax
	32	350	318,000	79,500
		post tax profit	238,500

- - - Updated - - -

Otm options probably require management and need to be monitored. Remember premise that he wants to put it away and not look for a long time. That is why I recommended deep in the money calls.

What management is needed besides selling before expiration?

- - - Updated - - -

You probably already know this but "rolling out" is simply selling your existing options (which triggers a taxable event) and buying further out options.

I didn't know that, kind of defeats the purpose from a tax perspective... Thanks, good to know.

 

[AlMc]

Originally Posted by Chickenlittle
Otm options probably require management and need to be monitored. Remember premise that he wants to put it away and not look for a long time. That is why I recommended deep in the money calls.



What management is needed besides selling before expiration?


I think I may help here. The management would be with swings in the stock price, and thus the option price, being greater with OTM LEAPS versus DITM LEAPS you should watch them more closely because you may hit whatever price target you set and want want to sell the option for a big gain long before expiration. Likewise, if there was a big piece of negative news you would want to get out (sell) the option quickly to mitigate your loss. You need to watch OTM LEAPS 'almost' as much as you would watch weeklies as they swing in price much more quickly that the stock or DITM LEAPS

Please feel to correct me if I am mistaken Chickenlittle

 

[RobotGrease]

purchase shares		strike price	320		strike price	300		strike price	250		strike price	225		strike price	200		strike price	175		strike price	125
			premium	18.73		premium	22.35		premium	35.3		premium	44.1		premium	55.35		premium	68.93		premium	103.57
share price	223.06		share price	223.06		share price	223.06		share price	223.06		share price	223.06		share price	223.06		share price	223.06		share price	223.06
# shares	51		contracts	6		contracts	5		contracts	3		contracts	3		contracts	2		contracts	2		contracts	1
total cost	11376		total cost	11238		total cost	11175		total cost	10590		total cost	13230		total cost	11070		total cost	13786		total cost	10357
sell price	300		sell price	300		sell price	300		sell price	300		sell price	300		sell price	300		sell price	300		sell price	300
gain	3924		gain	-23238		gain	-11175		gain	4410		gain	9270		gain	8930		gain	11214		gain	7143
roi	34%		roi	-207%		roi	-100%		roi	42%		roi	70%		roi	81%		roi	81%		roi	69%
breakeven	223.06		breakeven	338.73		breakeven	322.35		breakeven	285.3		breakeven	269.1		breakeven	255.35		breakeven	243.93		breakeven	228.57
purchase shares		strike price	320		strike price	300		strike price	250		strike price	225		strike price	200		strike price	175		strike price	125
			premium	18.73		premium	22.35		premium	35.3		premium	44.1		premium	55.35		premium	68.93		premium	103.57
share price	223.06		share price	223.06		share price	223.06		share price	223.06		share price	223.06		share price	223.06		share price	223.06		share price	223.06
shares	51		contracts	6		contracts	5		contracts	3		contracts	3		contracts	2		contracts	2		contracts	1
total cost	11376		total cost	11238		total cost	11175		total cost	10590		total cost	13230		total cost	11070		total cost	13786		total cost	10357
sell price	350		sell price	350		sell price	350		sell price	350		sell price	350		sell price	350		sell price	350		sell price	350
gain	6474		gain	6762		gain	13825		gain	19410		gain	24270		gain	18930		gain	21214		gain	12143
roi	57%		roi	60%		roi	124%		roi	183%		roi	183%		roi	171%		roi	154%		roi	117%
breakeven	223.06		breakeven	338.73		breakeven	322.35		breakeven	285.3		breakeven	269.1		breakeven	255.35		breakeven	243.93		breakeven	228.57
purchase shares		strike price	320		strike price	300		strike price	250		strike price	225		strike price	200		strike price	175		strike price	125
			premium	18.73		premium	22.35		premium	35.3		premium	44.1		premium	55.35		premium	68.93		premium	103.57
share price	223.06		share price	223.06		share price	223.06		share price	223.06		share price	223.06		share price	223.06		share price	223.06		share price	223.06
# shares	51		contracts	6		contracts	5		contracts	3		contracts	3		contracts	2		contracts	2		contracts	1
total cost	11376		total cost	11238		total cost	11175		total cost	10590		total cost	13230		total cost	11070		total cost	13786		total cost	10357
sell price	400		sell price	400		sell price	400		sell price	400		sell price	400		sell price	400		sell price	400		sell price	400
gain	9024		gain	36762		gain	38825		gain	34410		gain	39270		gain	28930		gain	31214		gain	17143
roi	79%		roi	327%		roi	347%		roi	325%		roi	297%		roi	261%		roi	226%		roi	166%
breakeven	223.06		breakeven	338.73		breakeven	322.35		breakeven	285.3		breakeven	269.1		breakeven	255.35		breakeven	243.93		breakeven	228.57

View attachment TSLA Options.xlsx

Does this look right? Didn't include taxes in this first iteration.

Also, besides taxes, are these numbers all inclusive? I keep hearing about time value or time depreciation... If I'm just looking at selling them right before expiration, the only thing that matters is the price of the stock at that point right?

 

[DaveT]

Robert, can you post the table you posted as an excel file so I (or others) can review/give feedback a bit easier?

 

[RobotGrease]

Robert, can you post the table you posted as an excel file so I (or others) can review/give feedback a bit easier?

Yep, sorry. Was uploading it as you responded.

View attachment TSLA Options.xlsx

Does this look right? Didn't include taxes in this first iteration.

Also, besides taxes, are these numbers all inclusive? I keep hearing about time value or time depreciation... If I'm just looking at selling them right before expiration, the only thing that matters is the price of the stock at that point right?

 

[Auzie]

You can't buy another 1000 shares with the capital from selling 1000 shares.... even if after 12months, you are losing capital gains taxes and so your buying power decreases (loss of principle). Also, you arent using consistent tax percentages...

Here are the numbers if using 25% tax consistently and reducing the number of shares you can buy after each sale by 25%. The numbers speak for themselves... You are correct, you have minimized taxes...but at the expense of even more greatly minimizing overall gains. Not sure why you would give up post tax profits for fear of paying those taxes...

My table that reflects stock refreshment strategy is simplified.

Adding details to it clouds the main message and makes it much more complex.

Tax implications on large gains are game changer for many investors. Portfolio returns can be enhanced with tax minimization strategies.

Details that are missing:

Transaction costs - minimal and do not have meaningful impact on the transaction

Your assumption of 25% loss of capital at stock refreshment sale and buy transaction is not clear to me, where does that come from?

It is possible to ensure the same or very close sell and buy price by limit order placing. There may be some minor differences in sell and buy price that could go either way, one might be lucky and get lower buy than sell.

Capital gains get taxed at marginal rates, not at flat rate of 25%. Tax liability rate progressively goes up with the rising income. I used Australian tax calculator, US calculator would produce similar pattern of results.

Investor's other income is missing from calculations. When one adds other taxable income to investment profits, the tax rate goes up and tax liability increases.

The strategy yields more benefits for higher bracket individuals.

 

[DaveT]

Yep, sorry. Was uploading it as you responded.

View attachment 53416

Does this look right? Didn't include taxes in this first iteration.

Also, besides taxes, are these numbers all inclusive? I keep hearing about time value or time depreciation... If I'm just looking at selling them right before expiration, the only thing that matters is the price of the stock at that point right?

Hi Robert, the numbers look accurate. Since you plan to hold to expiration you don't need to worry about time value/etc. The value of the option at expiration will be the strike price - stock price. I've made some edits to the spreadsheet to clean it up and make it easier to compare scenarios. I've also added a scenario for a $250 sell price since Jan16 is just 1.5 years away.

View attachment TSLA Options edit.xlsx

 

[TSLAopt]

Great analysis and spreadsheets guys. Here is a suggestion if any of you have time to research it:

If any of you have an IB account then there is a great tool that will do this all for you very easily called the "Risk Navigator". Within that tool is a "What-If" portfolio where you can enter any hypothetical set of option positions you want.
Then there is a feature called "Custom Scenario" you can use to see what that portfolio value and PNL change would be at any date in the future you select with any change in the underlying price you type in. For example, you could put Jan 20th 2015 (ie. Right after next Auto show with possible GEN III reveal) and say TSLA is at 305 and it will spit out what your hypothetical portfolio of options would be worth on that day with that price, even if they're set to expire the following year or sometime later...it also shows what their updated delta and gamma would be on that date for that scenario you typed in

This tool was extremely helpful to me last Spring when trying to decide what options to buy to make as much money as I could by X date if I thought the price would be over 100 by that date. Not sure if the price will double or triple again in a short period like that but if you think it will get to a certain level by a certain date then I would highly recommend this tool on IB's platform to figure out what options might be best to maximize your gains with options for any scenarios you are envisioning happening to TSLA's stock price.

 

[EnergyMax]

This +100 Please let us drop down for to the 200 for something as silly/awesome as this. It would be Christmas come early for sure.

Why? So you could day trade back to 260?
Why didn't you buy under 200 in May?

 

[blakegallagher]

Why? So you could day trade back to 260?
Why didn't you buy under 200 in May?

I went all in on margin when TSLA was falling and was around 230-240 ... much too early. I think I was its 20 day at the time. I cleared out my margin recently and would love to pick up some more calls if TSLA was to fall down to 200. I would not day trade so to speak ... just hold on to a block of options until I had made a Model 3 or two off of them


edit: I have about 99 percent of all of my wealth in TSLA. Also worth nothing that I Have a block of shares I picked up when TSLA was around 70 or 80 that I wont sell until its around 2000 per share

 

[green1]

Why? So you could day trade back to 260?
Why didn't you buy under 200 in May?

Not everyone had the same amount of money waiting to be invested in May that they do now....