Wiki Selling TSLA Options - Be the House

[Max Plaid]

https://twitter.com/x/status/1784561310883344542

Will be watching Dune Part Two this evening... rewatched Part One yesterday, but I do have to say that I prefer Lynch's more dystopian, retro vision over Villeneuve's

 

[joh01652]

Excellent write up.

Also, I'd like to add that @Max Plaid 's notion of "We've seen in the past TSLA go on these bull runs based on nothing" is a bit misguided. Ultimately, there's one and only one reason why stocks go up, and that's because we have more buyers than sellers.

There are a lot of reasons for having more buyers than sellers, and beating earning and having a normal CEO are just 2 of those reasons. Said another way, focusing solely on the fundamentals to predict short term price movement is like peeking at the outside through a keyhole. For 2023, the recipe for the 2 crazy 100% runs was the same.

1. People shorted it too much at 100 and then again at 152. Notice how multiple personalities on Youtube including Rob Mauer was speaking of defeat. All my friends were selling 120 & 130 CCs. Tears were shed after the bounce no matter how hard I tried to talk them out of it. <- we just had 4 long months of pessimism
2. Money flowed back into the market, lifting TSLA with it <- money is flowing out but it will be back in in about 3 weeks
3. Some shorts saw no reason to stay short, covered and lifted it a bit further <- this just happened this last week
4. A bit of positive news get thrown into the mix and lifted it up even further <- this might or might not be coming. No way to tell
5. Along the way, new shorts entered because they thought it was BS
6. At some point the seemingly BS news just kept popping up every other day, and now every short felt the heat
7. The technicals flipped so strong that long traders entered
8. P&D / ER coming up and shorts started asking the question "what if it beats?" and then they ran for the door
9. Huge squeeze

So, thinking "it's running based on nothing" is a big part of the reason why it runs, cuz too many think that and bet against it, only to become fuel for the rocket. So there's a real reason for the run. You just won't see it if you're too focused on what you think is wrong with the company and Elon.

Longer term, if you're right that the company deserves a 90 SP, then the market will eventually vindicate you, but along the way, it will test you. It will break you down mentally and physically if you insist on going against the trend. It's easy to think I'll just stay short and sooner or later these stupid bulls will pay, but what if it squeezes to 300, 350? You will feel like a different person then. The worst thing is you might be right that TSLA deserves 100 right now, but then the BS bull run takes too long to end and it gets to a quarter where business starts picking up and then it seems like it will never come down again.

As for me, I try to use the chart to predict the future although people say don't do it, it's futile. They say only trade the short timeframes, don't try to play god. I don't intend to play god but only use probability and a confluence of indicators to guide my action and hope it's the right one. Ultimately, if you think in your heart of heart that TSLA will be huge 10 years from now, like I do even though I dont look at the fundamentals while trading, you shouldn't be too bearish. If your living situation permits it, it's much better to always lean bullish and see these troughs as short term setbacks. Looking at NVDA, I sweat at the possibility of FSD taking off and leaving those who are short behind so far to the point of potential bankruptcy. You can be right 9/10 times shorting, but that last one where it runs like it did in 2020 can kill you.

Well said, I totally agree. Statements like “We've seen in the past TSLA go on these bull runs based on nothing,” is simply not correct. But I think here Max is venting his frustrations more than anything else. I say the same sorts of things when I'm angry, frustrated and exasperated. Just because we can’t fully explain the answer (or don't have an answer) doesn’t mean there isn’t one. You did a fine job pulling out the major points of 2023's bull run, but we could go even further and deeper if we wanted to. And this applies to everything. In the real world, Mother Nature/The Universe rarely provides us with a smoking gun and a bullet; in complex chaotic natural systems all we have are millions of bullet shells scattered around the globe, dropped haphazardly over the years—good luck piecing that puzzle together, ha. The Butterfly Effect is a great introduction to Chaos Theory, but that's just a first step into appreciating complexity.

The simplistic linear-reductive “science” pushed in school, the media, movies, overheard at the local bar and everywhere else is quite toxic and sets people up for failure throughout life. But it is a useful tool for duping people and keeping the masses compliant. Chaos theory is where it’s at—and when dealing with markets the question to ask yourself is, “Can you find the fleeting bits of periodic behavior in the maelstrom?” That's where the money's at. It also helps one appreciate the risks embedded in everything.

 

[joh01652]

TBH I thought that for once I was being analytical rather than emotional. As a long time TSLA perma-bull, it's only recently that I've begun to be bearish, and it took a lot of negatives for that to happen

Almost every previous P&D/earnings, I've been unwaveringly bullish, bet accordingly, and got hammered when the stock did the opposite, and now the same thing happened again, except this time I positioned way in advance for the stock to crash, which it did, and earnings warranted a further drop

So maybe a good feeling for the state of the company, but indeed wrong-footed by the markets

I feel like we’re sort of walking the same path. I’m also a long-time Tesla bull who maybe got a bit too emotionally invested, and now my blind enthusiasm has corrected some.

But Tesla and “the markets” are two entirely different beasts I have to constantly remind myself. Tesla is just a company. Elon is just a guy. The markets are for playing games of risk and wealth transfer, where lots of super smart, hard-working, hungry wolves are waiting for me to be stupid, emotional, greedy and to stumble. I trade for the fun challenge of it. My feelings for a company or CEO should have no overlap when I'm in the money arena.

Easier said than done, I know.

 

[Max Plaid]

I feel like we’re sort of walking the same path. I’m also a long-time Tesla bull who maybe got a bit too emotionally invested, and now my blind enthusiasm has corrected some.

But Tesla and “the markets” are two entirely different beasts I have to constantly remind myself. Tesla is just a company. Elon is just a guy. The markets are for playing games of risk and wealth transfer, where lots of super smart, hard-working, hungry wolves are waiting for me to be stupid, emotional, greedy and to stumble. I trade for the fun challenge of it. My feelings for a company or CEO should have no overlap when I'm in the money arena.

Easier said than done, I know.

Indeed and thank you for your thoughtful posts the last days (@dl003 too)

Indeed I'm often trading the company and not the stock. Sometime I think one or the other is in play, sometimes both. Differentiating is key

Most of all, as we discussed many times here in the past, spotting the trend and then identifying the moment of reversal is key

For this, earnings was a curious one as I still believe Tesla as a company warranted the fall in the SP and more on top, but for sure the options positioning was perhaps too juicy for a reversal not to happen, but needed a very positive shareholder deck and good earnings call to achieve that IMO - if we had Elon the Paranoid Android on the call then things might have played out differently

Anyway, after updating my Excel, realised loss for last week was only $115k, felt a lot worse, but not a big deal

 

[Jim Holder]

Found on X:

 

[Tachyon]

Indeed and thank you for your thoughtful posts the last days (@dl003 too)

Indeed I'm often trading the company and not the stock. Sometime I think one or the other is in play, sometimes both. Differentiating is key

Most of all, as we discussed many times here in the past, spotting the trend and then identifying the moment of reversal is key

For this, earnings was a curious one as I still believe Tesla as a company warranted the fall in the SP and more on top, but for sure the options positioning was perhaps too juicy for a reversal not to happen, but needed a very positive shareholder deck and good earnings call to achieve that IMO - if we had Elon the Paranoid Android on the call then things might have played out differently

Anyway, after updating my Excel, realised loss for last week was only $115k, felt a lot worse, but not a big deal

Infact the 10% fall post earnings past few ERs was also largely contributed by Elon and his rambling paranoid android musings . One time he showed up with “ bigger than Aramco Apple
Combined “ call pump , he sold right after .
This time he came prepared , wish we get this Elon for every earnings call .

 

[dl003]

Well said, I totally agree. Statements like “We've seen in the past TSLA go on these bull runs based on nothing,” is simply not correct. But I think here Max is venting his frustrations more than anything else. I say the same sorts of things when I'm angry, frustrated and exasperated. Just because we can’t fully explain the answer (or don't have an answer) doesn’t mean there isn’t one. You did a fine job pulling out the major points of 2023's bull run, but we could go even further and deeper if we wanted to. And this applies to everything. In the real world, Mother Nature/The Universe rarely provides us with a smoking gun and a bullet; in complex chaotic natural systems all we have are millions of bullet shells scattered around the globe, dropped haphazardly over the years—good luck piecing that puzzle together, ha. The Butterfly Effect is a great introduction to Chaos Theory, but that's just a first step into appreciating complexity.

The simplistic linear-reductive “science” pushed in school, the media, movies, overheard at the local bar and everywhere else is quite toxic and sets people up for failure throughout life. But it is a useful tool for duping people and keeping the masses compliant. Chaos theory is where it’s at—and when dealing with markets the question to ask yourself is, “Can you find the fleeting bits of periodic behavior in the maelstrom?” That's where the money's at. It also helps one appreciate the risks embedded in everything.

Now I wonder if I shouldnt do a retro series of posts on every major top and bottom in 2023. Could be a good exercise.

 

[Max Plaid]

Infact the 10% fall post earnings past few ERs was also largely contributed by Elon and his rambling paranoid android musings . One time he showed up with “ bigger than Aramco Apple
Combined “ call pump , he sold right after .
This time he came prepared , wish we get this Elon for every earnings call .

This was May 2023 Shareholders Meeting Elon we saw again (which then was followed by a rally to just below 300...)

You'd think someone on the BoD would perhaps have a quiet word with him just before each call, or is that too much to ask?

 

[Max Plaid]

Now I wonder if I shouldnt do a retro series of posts on every major top and bottom in 2023. Could be a good exercise.

Every top and bottom for the rest of 2024 would be more useful

 

[tivoboy]

@tivoboy are you still bearish or do you plan to go long or what do you need to see before you go long?

Bullish company medium to longer term, bearish stock short to medium term. I’ve sold June monthly calls $175 for $11.. if they get down by 50% this week, I’ll buy back and wait to resell same for July.

 

[BornToFly]

Picking up my CT on Wednesday. So is a friend who placed his order a lot later than me. They are really increasing deliveries now. I'm hoping for a slight SP pullback to get my lost shares back, but I don't see 140 again before the next leg up....

 

[EVNow]

This was May 2023 Shareholders Meeting Elon we saw again (which then was followed by a rally to just below 300...)

You'd think someone on the BoD would perhaps have a quiet word with him just before each call, or is that too much to ask?

Depending on the mood, that someone on the BoD might be on their way out shortly after …

I think he only listens to his brother at this point.

 

[EVNow]

One time he showed up with “ bigger than Aramco Apple
Combined “ call pump , he sold right after .
This time he came prepared , wish we get this Elon for every earnings call .

Hmmm … is he planning to sell soon ?

 

[Jim Holder]

I’ve sold June monthly calls $175 for $11.. if they get down by 50% this week, I’ll buy back and wait to resell same for July.

Perhaps a bit close with a possible Elon Comp Vote approval pop/run at the annual shareholders meeting (June 13)?

 

[Jim Holder]

Cary: $177 is pivot area this week. A close above today portends bullish continuation into June-July to $187 and a close above that can see $206+, consider closing shorts.

Holding below $177 keeps $165-$157 in play. Below $157 keeps $151 and $133 in play.

https://twitter.com/x/status/1784613607441142193

PS I’ll be away this Monday and Tuesday, returning Wednesday.

 

[StarFoxisDown!]

Hmmm … is he planning to sell soon ?

lol man people are so scarred from the past 2 years that watching them get even more jaded when TSLA goes on a multi year rally will be hilarious.

Not saying this applies to you. Just an observation on the overall sentiment on TSLA and Elon from retail investors. It’s like any positive news nowadays or positivity from Elon is treated like there’s some underlying motive.

 

[EVNow]

Not saying this applies to you. Just an observation on the overall sentiment on TSLA and Elon from retail investors. It’s like any positive news nowadays or positivity from Elon is treated like there’s some underlying motive.

Its suspicious when an obviously bad ER pumps up SP by 15%. People would be claiming vast worldwide conspiracy if the opposite happened

 

[Max Plaid]

lol man people are so scarred from the past 2 years that watching them get even more jaded when TSLA goes on a multi year rally will be hilarious.

Not saying this applies to you. Just an observation on the overall sentiment on TSLA and Elon from retail investors. It’s like any positive news nowadays or positivity from Elon is treated like there’s some underlying motive.

It's when Kimbal dumps a load that you need to get worried

I do think TSLA will have a mad rally at some point, maybe a few more iterations of FSD so it becomes good enough that it enters the public conscious, also an OEM licensing FSD would like send the stock crazy, if one OEM comes on board the others will think about to too, same as happened with NACS

Shame it didn't crash to $90 after earnings, I was going to load 10k TSLA , meh

 

[tivoboy]

Picking up my CT on Wednesday. So is a friend who placed his order a lot later than me. They are really increasing deliveries now. I'm hoping for a slight SP pullback to get my lost shares back, but I don't see 140 again before the next leg up....

They won’t tell us this, but I think there have been a lot of cancellations and/or lots of buyers who do not want the very HIGH $$ founder series, Beast or the pricing of the current model. We’ll probably only know if/when they make the lower priced simpler models available - which would most likely mean the peak demand for the current offerings has tipped down.

 

[tivoboy]

Perhaps a bit close with a possible Elon Comp Vote approval pop/run at the annual shareholders meeting (June 13)?

that’s a little bit why I’m not going to hold for my usually 80-90% return on options.. I’ll take it off a 50% win, and re-load once I’ve divined what the “vote” would imply/initiate.. frankly, I don’t really think the vote up or down would do much longer than a short term pop/drop