Wiki Selling TSLA Options - Be the House

[Yoona]

c'mon wheel letsgooooooooo, gimme 3300 CC per contract

 

[dc_h]

Is anyone buying puts for the next couple of weeks? 140 puts for June 21 are .27 and I'm surprised no one is buying calamity insurance. Apparently the market does not think the stock is going to tank when the vote is released. I see a potential scenario where the stock could crater followed by a run up to 200. I can also see TSLA closing at 177.50 for the next two weeks.

 

[Jim Holder]

It's likely a $2275 call option bought before the last split, probably around 2 years ago when TSLA was trading over $300. The original purchase price could have been double or triple what they're worth now.

Would be interesting to see when that purchase/OI spike showed up. Also may not be a terrible bet today @0.01 cent if one had several grand to throw at it, but I don’t know enough to know the value of trying it.

Also consider cost of each contract (0.45 with Schwab...).

 

[Max Plaid]

Pfff, I could get out of the NVDA -p1150's (-p115) I sold on Friday for 70% profits right now, except:

 

[tivoboy]

Pfff, I could get out of the NVDA -p1150's (-p115) I sold on Friday for 70% profits right now, except:

View attachment 1055215

Maybe they have to remove it from the account first to use the scissors to but them into ten pieces?

 

[EnzoXYZ]

I think the interview was cut short before she could say “oh, well of course before the 600B of value destruction”

If NVDA's gross margin goes from 75% to 45% would you bet on the share price not moving because Jensen didn't tweet or buy a social media company?

 

[BornToFly]

I sold 50X -180P for Friday for $7 (was limit order that hit). These are shares I'm trying to get back. With all the premiums I've received, it would be the equivalent now of having sold them at 185 and buying them back at 180. So not too bad, and it brings my break even point to 185 if the stock goes up after Thursday. I originally wanted $5 for the 175P, but it wasn't getting there, and I had a dentist appointment so I couldn't watch the SP.

 

[mickle]

I'm just not seeing why results of the voting will make much difference in the stock price. Seems like the issue won't really be resolved either way. If Elon wins, possible it isn't valid. If he loses, they still have appeals or a new package.

More important will be what is said regarding the company, FSD status, robotaxi service (maybe an operational date?), the new lower cost cars, an optimus update, etc.

Just sold a few $165 puts, wouldn't mind more shares at that price if I couldn't roll them down.

 

[Jim Holder]

I'm just not seeing why results of the voting will make much difference in the stock price. Seems like the issue won't really be resolved either way. If Elon wins, possible it isn't valid. If he loses, they still have appeals or a new package.

Agree. It’s likely the emotional ppl that will “sell everything” if it fails, anticipating a massive crash. And then whales taking advantage of the fear to pile on and buy back lower.

 

[tivoboy]

Tesla’s Investor Vote on Elon Musk’s Pay Package Is About More Than His Money​

June 10, 2024 at 7:00 AM EDT

Dana Hull and Jef Feeley, Bloomberg News

(Bloomberg) -- Even if Tesla Inc. shareholders vote later this week to ratify Chief Executive Officer Elon Musk’s $56 billion pay package, it’s unlikely to reverse a judge’s decision to nullify the 2018 compensation deal.

That’s because the June 13 vote has more symbolic weight than legal power. Shareholder approval may help Tesla with an appeal or a rehearing in a new case, but it cannot overturn Chancery Court Judge Kathaleen St. Jude McCormick’s January ruling, some legal scholars say.

“People think this is like a direct democracy — that if they vote yes to re-ratify Elon’s pay plan that it will fix what Chancellor McCormick did,” said Christina Sautter, a law professor at Southern Methodist University in Dallas. “But this is unprecedented.”

Tesla called the vote as part of an unusual legal strategy. It’s seeking a redo to correct flaws in the process when shareholders approved Musk’s pay six years ago. In her ruling, McCormick pointed to director conflicts of interest and the company’s failure to properly disclose terms of his executive compensation plan.

The carmaker is banking on the Delaware Supreme Court, which will hear any appeal of McCormick’s ruling, taking a favorable view of investors re-ratifying the deal. However, Tesla alluded in its proxy to the fact that it can’t guarantee a successful outcome.

We “cannot predict with certainty how a vote to ratify Musk’s compensation would be treated under Delaware law in these novel circumstances,” the company wrote.

Win or lose, Musk and Tesla cannot file an appeal until McCormick decides the legal fees in the case and issues a final judgment.

The more clear-cut and immediate impact of the vote on Musk’s pay is that it could strengthen or weaken the billionaire’s influence on the company. As of June 7, Tesla’s shares have fallen 29% this year amid growing competition for electric vehicles and slowing sales, and the vote is widely seen as a referendum on his leadership.

Glass Lewis & Co. and Institutional Shareholder Services, two prominent proxy advisers, recommended that shareholders reject the pay package. ISS called it “outsized from the start” and said it has failed to meet some of the board’s stated objectives.

Musk’s Focus

The award is seen as a way to maintain Musk’s focus on Tesla. Since 2018, he has sold Tesla shares to purchase X, formerly known as Twitter, and started xAI, so he now oversees six companies. He’s threatened to create more AI products outside of the carmaker if he can’t build his equity position in Tesla back up to 25%, from about 13% now.

“What we recognized in 2018 and continue to recognize today is that one thing Elon most certainly does not have is unlimited time,” Board Chair Robyn Denholm wrote in a letter to shareholders last week. “Nor does he face any shortage of ideas and other places he can make an incredible difference in the world. We want those ideas, that energy and that time to be at Tesla, for the benefit of you, our owners. But that requires reciprocal respect.”

Denholm has been courting large institutional investors in the days before the vote. Tesla has also dangled an exclusive factory tour with Musk as a potential prize for shareholders who can prove they’ve cast a ballot.

Zohar Goshen, a Columbia Law School professor who specializes in corporate law issues, said launching a redo of the approval process for Musk’s pay is a proper way to rectify the flaws McCormick identified while still keeping the billionaire tied to Tesla.

“The court’s finding that Tesla failed to properly approve the compensation package in 2018 doesn’t mean that Musk isn’t entitled to any compensation for the last six years of service,” Goshen wrote in an op-ed on Bloomberg Law.

In 2018, 73% of Tesla shareholders who cast votes approved of Musk’s compensation plan. A “Vote Tesla” website the company created argues that shareholder democracy is at stake, saying: “We don’t believe one judge’s opinion should be able to overturn the decisions of millions of our stockholders.”

Moving States

Besides Musk’s compensation, shareholders will also vote on Tesla’s proposal to move its state of jurisdiction to Texas from Delaware. Tesla is already headquartered in Austin, and the company is arguing that it’s time to “make our business home our legal home.”

Charles Elson, a retired University of Delaware professor who founded the school’s Weinberg Center for Corporate Governance, said that Texas courts may take a more favorable view on Musk’s compensation plan, but this vote is unlikely to sway Delaware judges.

“I don’t agree at all with Tesla’s position that all the problems with the process of setting Mr. Musk’s pay can be wiped out with some kind of redo,” said Elson, who has filed a friend-of-the court brief in Musk’s pay case. “The only way the new vote matters is if Tesla directors decide to start the process over in a new state.”

©2024 Bloomberg L.P.

I read some of these over the weekend… and yes, it is more that this vote is much more symbolic than anything close to say reversing the chancellory’s courts ruling. And, if people think that is what is going to happen vis a vis an appeal, that’s not how appeal courts work. The POSSIBLE affirmation by shareholders isn’t going to go into an appellate courts ruling.

 

[MikeC]

Charles Elson, a retired University of Delaware professor who founded the school’s Weinberg Center for Corporate Governance, said that Texas courts may take a more favorable view on Musk’s compensation plan, but this vote is unlikely to sway Delaware judges.

“I don’t agree at all with Tesla’s position that all the problems with the process of setting Mr. Musk’s pay can be wiped out with some kind of redo,” said Elson, who has filed a friend-of-the court brief in Musk’s pay case. “The only way the new vote matters is if Tesla directors decide to start the process over in a new state.”

I guess I still just can't understand why the second vote would not be a valid shareholder decision. They addressed the courts' concern about disclosure - the court should be happy that they corrected what the court claims was their concern. It's not overturning the prior vote, it's a brand new legitimate vote.

To say it will only be valid if Tesla moves to a new state is to admit that the issue was not with disclosure as the court claimed. The only conclusion that can be made is that the Delaware judge is dead set against giving it to him under any circumstances.

 

[Max Plaid]

Maybe they have to remove it from the account first to use the scissors to but them into ten pieces?

Belgian technology...

OK, was getting bored, STO 100x -p170 @$2.7 -> underwritten by 100x Jul +p150, 100x Jan 25 +p150

I think Musk's vote will pass, so risk of the stock tanking on that is low IMO, CPI will be as forecast or slightly warm, FOMC will be nothing, don't think anyone is expecting a rate-cut now after recent data

If we did get a dump then I would roll these down until the 200x +p150 went to a good value, then sell those off and flip to CSP

 

[Jim Holder]

https://twitter.com/x/status/1800228129686122617

 

[Max Plaid]

That's a top-quality walk-down by the short-sellers today on bugger-all volume...

 

[elasalle]

Is anyone buying puts for the next couple of weeks? 140 puts for June 21 are .27 and I'm surprised no one is buying calamity insurance. Apparently the market does not think the stock is going to tank when the vote is released. I see a potential scenario where the stock could crater followed by a run up to 200. I can also see TSLA closing at 177.50 for the next two weeks.

i'm going the other way ..
bought a few lotto calls for $180 for this Fri ~ 2.53

Hedge made a month ago by selling CC's against my shares ... if big drop, I will close the CCs near the bottom ...

 

[GatorMeat]

If NVDA's gross margin goes from 75% to 45% would you bet on the share price not moving because Jensen didn't tweet or buy a social media company?

NVDA's margin won't go down from 75% to 45% precisely because Jensen would never dump half his NVDA to overpay for a social media company nor would he act like a wannabe political influencer nor would he divide his attention on other companies, nor would he tell customers to GFY

 

[Jim Holder]

My chart shows bullish structure going into Monday so Im in half size -c and full size -p.

They sure pulled one on us. With TSLA looks can be deceiving. Although it seems 173-172 might hold (but looks can be deceiving again lol).

 

[dc_h]

NVDA's margin won't go down from 75% to 45% precisely because Jensen would never dump half his NVDA to overpay for a social media company nor would he act like a wannabe political influencer nor would he divide his attention on other companies, nor would he tell customers to GFY

Where's the retweet button?

 

[dl003]

They sure pulled one on us. With TSLA looks can be deceiving. Although it seems 173-172 might hold (but looks can be deceiving again lol).

Did they, though? 178.6 was reached.

 

[Jim Holder]

Did they, though? 178.6 was reached.

Chart showing bullish structure sounded like it'd give us more than that + all those full-size -p you had (half size -c and full size -p)
Are you expecting more downside from here?