Johan
Ex got M3 in the divorce, waiting for EU Model Y!
No, again confusion since I mistyped. The May $90 calls were 1.2/1.3 at market close today.
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Newbie Options Trading
- Thread starter Jonathan Hewitt
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- investing options TSLA tsla stock
No, again confusion since I mistyped. The May $90 calls were 1.2/1.3 at market close today.
Just logged into my trading account and saw. Too bad I didn't buy more before the close
Johan
Ex got M3 in the divorce, waiting for EU Model Y!
Johan
Ex got M3 in the divorce, waiting for EU Model Y!
No, 70% unlikely but 30% just maybe, and then who knows? A lot of new shorts have come in this week, they may get might scared if we cross $100 and we might see The Squeeze part II.
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not from my seat; in fact, I can't figure out why a dilution and an imminent clearing of short positions would make the price go up at all?
should go down if anything or at best flat if the market thinks this money is better than DOE money - I could see the market thinking Tesla got a really good deal on the raise due to the short squeeze pricing of the stock as luv described. But this also transfers that elevated price to the company in cash, and in some ways at the expense of long current holders. It might be worth it in the end, but I can't get my head around how it helps current shareholders position today- other than perhaps solidifying the stock price. But as a stock holder I'm now valuing the company at an enormous valuation, without short cover underneath.
It'll helps the stock because:
- The dilution isnt occuring now, but in the future when TSLA will be a better established company and less volitile stock.
- Elon will be buying $100mm worth of stock which will not be part of the tradable float
- Paying of the DOE loan will allow them to keep more cash from revenues with a lower interest rate on this deal vs the DOE loan. It also removes the stigma of having the DOE loan which many have crtitized should be used for a company that makes products that most Americans can buy.
- Elon's purchase yields confidence in that Tesla will be around for a while
- The extra cash can be used as a cushion for operating costs in case sales slow.
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I've started doing a "newbie" options trade.
Won't work for a lot of people, but here's the thing. I'm sitting on a lot of cash which I don't particularly want to invest in anything else. I'd like to get Tesla at below the current market price, and I don't pay enough attention to catch a lot of the dips.
So I started writing cash-secured puts. If Tesla drops, I get stock at a price I like. If it doesn't, silly bears pay me money.
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What startles me is how much some people will pay for out-of-the-money puts. I'm in it for the long term, and this is a plan for increasing my stake at good prices.
Won't work for a lot of people, but here's the thing. I'm sitting on a lot of cash which I don't particularly want to invest in anything else. I'd like to get Tesla at below the current market price, and I don't pay enough attention to catch a lot of the dips.
So I started writing cash-secured puts. If Tesla drops, I get stock at a price I like. If it doesn't, silly bears pay me money.
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What startles me is how much some people will pay for out-of-the-money puts. I'm in it for the long term, and this is a plan for increasing my stake at good prices.
IV30 is down to 63 now from what I see, that's a lot more reasonable than it's been lately. If things keep up at this rate in a week or two there should be some really good deals on Calls, oh wait, we should have another announcement next week and one after that...
I normally invest in index funds since I have neither the time nor skill to pick stocks. Since I am obsessed with Tesla Motors, however, I have made an exception for TSLA. I think manufacturing a superior product and developing a rabid proselytizing customer base willing to pay a premium for that product is a really good business model. I expect strong long-term growth, although I'm not expecting much net trend in the stock over the next 3-6 months or so since the company has real challenges trying to break even and increase their margins which no amount of Elon Musk tweets can overcome. Although I am generally risk averse, I feel a little overconfident after buying in February and selling half my stock at $92, and I am dipping my toe into call options.
Here's my question. I have been trying to track values of options through the ups and downs (is there a website with that information?) and it seems like the cost of the options more or less follows the fluctuations of the stock. Is that generally what happens? I would expect the time value (which is ample for most call options) to change in a pattern somewhat inverse to the stock price since whether TSLA is going for $86 or $92 now has very little to do with whatever price it will have in (for example) January 2014. With the price of options swinging as wildly as the stock, it seems like that would provide an opportunity to profit off of TSLA's volatility. I'm not thinking day trading exactly, more like week or month trading. It seems like this would provide an opportunity to make a good return on investment if either (a) the stock goes up in an orderly manner to something above the strike price + premium or (b) the stock continues to move up and down wildly while generally maintaining its value. The stock may do neither of these things, of course, but it seems like a pretty good risk. I did my first purchase when TSLA was around $86, planning to hold until the supercharger announcement, although I might sell if tomorrow looks like today. I'm questioning if my strategy would work, though, because if it did enough people would do it to drain the opportunity to make a good return. So is this a plausible strategy? I realize there are more sophisticated options techniques to take advantage of volatility, but I don't have the skill (or probably brokerage clearance) to do such things yet.
Here's my question. I have been trying to track values of options through the ups and downs (is there a website with that information?) and it seems like the cost of the options more or less follows the fluctuations of the stock. Is that generally what happens? I would expect the time value (which is ample for most call options) to change in a pattern somewhat inverse to the stock price since whether TSLA is going for $86 or $92 now has very little to do with whatever price it will have in (for example) January 2014. With the price of options swinging as wildly as the stock, it seems like that would provide an opportunity to profit off of TSLA's volatility. I'm not thinking day trading exactly, more like week or month trading. It seems like this would provide an opportunity to make a good return on investment if either (a) the stock goes up in an orderly manner to something above the strike price + premium or (b) the stock continues to move up and down wildly while generally maintaining its value. The stock may do neither of these things, of course, but it seems like a pretty good risk. I did my first purchase when TSLA was around $86, planning to hold until the supercharger announcement, although I might sell if tomorrow looks like today. I'm questioning if my strategy would work, though, because if it did enough people would do it to drain the opportunity to make a good return. So is this a plausible strategy? I realize there are more sophisticated options techniques to take advantage of volatility, but I don't have the skill (or probably brokerage clearance) to do such things yet.
ShortSlaver
Member
You sort of missed the easy money boat with TSLA options I think. The last couple months you couldn't lose if you bought calls - even ridiculous short term, well out of the money calls. And, they were cheap compared to today's prices. It was truly a golden era I will never forget.
Time value is only one of "the greeks" you need to learn. As TSLA has in fact become more volatile it has changed other greek values for the options, resulting in higher premiums making options far more riskier than they were.
My only advice is be very careful with TSLA options right now, especially if you're new to it. You might consider a longer term strategy by buying a LEAP. But these are insanely expensive right now, even far out of the money ones. However, deep in-the-money calls are decently priced, just expensive and more of a stock replacement strategy at this point.
If you want to get your feet wet maybe buy a June call that's a bit in-the-money and see what happens. Just my 2-cents.
I agree with ShortSlaver. If you want to do anything short or medium term make it small as a spec play. Otherwise the stick with the stock or deep-in-the-money LEAPS, preferable J15. If those are too expensive, you could consider an out-of-the-money J15 Call up around the $120-$130 strike; those have some time value potential on them. ATM (at-the-money) Calls (LEAP or otherwise) are very expensive right now- although I will note the IV and premium has cooled a little from a week ago.
have never traded options before. although i was fortunate to buy some tesla stock over the last four months, when i read about the profits from options, i kinda feel i missed the boat. this feeling in turn finally made me take the plunge today, when of course Tesla is at an all time high. Even though I follow the stock daily, I felt I wanted to at least get some call options before, (if and when) the stock becomes unaffordable. The historical outlook, informed part of me though thinks Elon's announcement might underdeliver. However, if they actually can charge an electric vehicle as fast as filling a tank of gas, then the ICE age will officially be over, and this will be considered the dawn of a new era.
Is anyone going to buy some calls based on this announcement? If so, and the price does go up, will there be a problem selling the calls on the friday before expiration? I ask as I am thinking about purchasing some calls, but do not have the capital to actually buy shares, and would have to sell the calls the next day.
It's a good strategy assuming you believe the announcement will be worthy of a pop.
As long as you don't buy way out of the money, as in $170 call and the stock only reaches $110, it will then be more difficult to sell.
There is a lot more risk on the downside. For example I purchased weekly options for the Supercharger announcement. They became worthless and i lost 100% of that investment, granted it wasn't a massive investment and i've made way more on TSLA overall so i'm ok...
As long as you don't buy way out of the money, as in $170 call and the stock only reaches $110, it will then be more difficult to sell.
There is a lot more risk on the downside. For example I purchased weekly options for the Supercharger announcement. They became worthless and i lost 100% of that investment, granted it wasn't a massive investment and i've made way more on TSLA overall so i'm ok...
Johan
Ex got M3 in the divorce, waiting for EU Model Y!
I don't disagree at all..
It was literally a gamble on the Supercharger announcement and i put my sell in too late to get anything out of it.
It was literally a gamble on the Supercharger announcement and i put my sell in too late to get anything out of it.
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