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Paydirt's (TSLA) Option Investing Guide

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paydirt76

Member
Jun 14, 2020
152
364
USA
To update folks...

I have been very busy. I cannot keep giving freely to everyone and neglect those who actively count on me. The money has been life changing. Work is really taking off and we are helping many more people, all at once. We just hired two people into an already small team and are hiring two more people. We are moving to a new office.

I am attempting to make my life easier and somehow more simple. Working on my health, time with family, and getting help at work. It's a lot of change all at once.

Trying to help everyone is akin to trying to boil the ocean, not a good strategy. It's one of my biggest flaws. "More money" isn't important to me now, this is the same as when the thread was started. I could have tried to monetize what I've done, writing a book, telling my story to the media, doing it for people who paid me. I gave freely to those with an ear to hear.

Many played along when it was time to play and made good money. I LOVE THAT. This is why I offer help to the Tesla community. I'm driven more by principle than ego/fame. Maybe "defending" is ego, but whatever.

I've shared that the short-term stuff was a gamble, and that any money in options you should be prepared to lose. These aren't just words.

I'm more so writing this to put my thoughts on paper.
Short-term is anyone's guess. No way to know if all the short-term players in stock are out, but the large buyers in call options are still playing according to the Najarians. This hasn't always meant something. Shocked at the S&P 500 snub. Thought an outright snub had a 5% or less chance of happening. Still think a 12% "forced" buyback in shares in a two week period will be earth shaking, if/when that happens. For now, it seems to be trading on the expectations of the bulls.

The larger question on peoples' minds is whether or not Tesla is becoming a less volatile stock. On top of that, it is super awkward/intimidating that Tesla is valued at 2-3x Toyota. Yes we all understand why. The major potential catalysts ahead are, imo...

(1) potential FSD rewrite and whether that is a major upgrade right away, and a "leaked" (friend of a beta tester) video that shows how the Tesla turns in intersections. The bulls will understand right away and could send the stock 20%+ higher if it looks amazing. The rest of the stock market will be slow to recognize what this means and may wait until it shows in financials, or major coverage in the NYT & CNBC, etc.

(2) potential S&P 500 inclusion. Perhaps they are looking at Elon's pay package. Perhaps they want earnings after regulatory credits to be positive. Perhaps they are hoping the stock cools off. Perhaps they think EVs are a fad. Who knows? The former head of the committee was proud they waited a number of years to include Microsoft. LOL. If I was the S&P, I would begin to worry about becoming irrelevant. I know, to them it is unthinkable. What's their trigger? I wish I could talk with them.

(3) potential if Tesla executes on quickly building all the Gigafactories and is no longer battery constrained, I think full year 2021 will be a real shock to Wall Street. Deliveries and profit could be amazing and shocking.

Given Tesla may now be driven by the bulls expectations, any "regular" earnings announcement may be a toss up. The only "sure" thing seems to be catalyst (3) which seems highly likely.

One big time Tesla bull on Twitter asked me why I don't use margin to just buy stock? I like that with calls my risk is defined meaning I don't have to put in more money. My loss on any given long call is limited to 100%, I control when I buy/sell. But there are seasons to anything and I do like to keep an open mind.

Maybe there will be a good time to sell calls against a long or deep position. With Elon continually threatening on the FSD rewrite, I would not want to be short calls now. I would not want to be short calls when Tesla announces earnings given S&P inclusion could happen. Right now, I definitely (all else equal) would not want to be short calls late 2021.
 

corduroy

Member
Jan 30, 2018
625
4,278
Earth, for now (sigh)
I came here late and read through this whole fascinating thread, thanks @paydirt76 . Sorry I missed this epic window of opportunity, but I'm still trying to set myself up for future success, albeit with much lower expectations. My time horizon is long, 5-10 years at least. My expectation is that TSLA SP will be 2-3x higher in the next 3 years due to all the catalysts ahead.

We are definitely in a different era now after the monster run up/split/battery day/S&P snub, not to mention election/macro uncertainty. All that being said I would like to add LEAPs to make up around 20% of my overall TSLA strategy, but in a conservative way - going as far out as I can and starting ITM (to give myself more margin for error). I realize there are more profitable options if my assumptions are true, but the risk/reward doesn't work out for me.

I've been watching this Jan 2023 400 call for a while, but still have a bit of sticker shock with the $195 price. IV has dropped 37% since September 18th peak though, so maybe there is window now to buy these calls? Does this sound viable or am I off in my thinking?
 
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