Welcome to Tesla Motors Club
Discuss Tesla's Model S, Model 3, Model X, Model Y, Cybertruck, Roadster and More.
Register

Short Squeeze Strategies

This site may earn commission on affiliate links.
I'm not a firm believer in a "VW-type short squeeze" since it has been preached on TMC since as long as I can remember.

That said, if it would happen and the stock spikes, here is my strategy:

I have a sell order for about 7% of my shares at:
$1000
$1500
$2000
$2500
$3000
$3500
$4000

The reasoning is this:
- if a spike only reaches $900 or so, I'm not considering it a short squeeze and don't expect a sudden drop. If it were to happen: meh, you can't plan for everything;
- if $1000 per share is reached in the short term, I want to unload some shares gradually just in case we spike down so I can buy more with the profits.
- if we spike further, I'm taking money off the table gradually at rates of $500 per share. These are values that I won't feel mad at myself for having sold. (I won't feel mad to have NOT sold, because I do believe we will reach $4000 at some point, even though that could be ten years away.)
- if we spike beyond $4000 I will have half my shares left and I can maybe (IF I spot the spike in time) sell some more. Most likely I wouldn't be able to react fast enough, but then again, I'd already have profited greatly from the spike.

Do I think a spike is likely? No. Is my mind at ease for if the short squeeze should come? Yes.

What I'm fretting over way more is when we will move to $1000 gradually. I'd like to go all out in JUN'22 LEAPS with a $1015 strike price but if Wall street keeps TSLA range bound between let's say $400 and $700 until then I'd be screwed. Or if there is a big recession, etcetera.

FOMO is a real thing which I'm conciously battling. The counterpoint is peace of mind (à la "I'm already happy with the gains I've got").

Not advice. Good luck to all.

@jeewee3000
Have you adjusted the GTC sell orders based upon today’s post earnings action of stock price up almost $70/share after hours?
 
I am still holding about half of the call options I bought over the last 3 weeks anticipating a short squeeze. When I have sold some (for amazing profits), I have been buying about half as many back even more OTM. I know eventually some of these ones will be worth zero but the train seems relentless and they keep going into 10-50 baggers.

On Friday last week for example, I bought 20 weekly $750 call options expiring this week for $1.05 each. I sold them off today for a total profit of $70,000. This is from a <1 trading day investment of just over $2,000! Completely crazy stuff.

I am going to use that $70,000 profit (minus taxes) from this one trade to completely pay for the Model Y I ordered a few weeks ago. So basically I am getting an optioned-out Model Y for $2,000!
 
I am still holding about half of the call options I bought over the last 3 weeks anticipating a short squeeze. When I have sold some (for amazing profits), I have been buying about half as many back even more OTM. I know eventually some of these ones will be worth zero but the train seems relentless and they keep going into 10-50 baggers.

On Friday last week for example, I bought 20 weekly $750 call options expiring this week for $1.05 each. I sold them off today for a total profit of $70,000. This is from a <1 trading day investment of just over $2,000! Completely crazy stuff.

I am going to use that $70,000 profit (minus taxes) from this one trade to completely pay for the Model Y I ordered a few weeks ago. So basically I am getting an optioned-out Model Y for $2,000!
@pz1975
Or use 1/2 to buy shares and 1/2 to buy car.
50 shares times somewhere between $6,000/share and $15,000/share
Is somewhere between
$300,000 and $750,000
In the next 5-10 years..........
 
@pz1975
Or use 1/2 to buy shares and 1/2 to buy car.
50 shares times somewhere between $6,000/share and $15,000/share
Is somewhere between
$300,000 and $750,000
In the next 5-10 years..........
I have a bunch more OTM calls expiring in Feb and March that I am holding for now with massive gains. This was just a funny last-minute trade I did Friday that ended up basically getting me a (almost) free Model Y in 1 day of trading!
 
  • Love
Reactions: winfield100
Just an update on my strategy (posted above): I ended up buying about 300 total OTM call contracts expiring between Feb-March. I have sold about 30% of them by value and the profits will completely pay for a Model Y, a Cybertruck and a house for the charity my wife is starting in Africa.

The remaining OTM "short squeeze" calls I still have have a total purchase price of $7,300 and are currently worth >$1,000,000. I haven't touched my shares or LEAPs, which constitute the majority of my position. This is absolutely bonkers. I was anticipating this short squeeze for 6.5 years now and it feels surreal now that is finally arrived. And it doesn't even look over yet.

Congrats to all and thanks for the amazing community over the good and bad times. I would not be in this position so deep without this forum.
 
Just an update on my strategy (posted above): I ended up buying about 300 total OTM call contracts expiring between Feb-March. I have sold about 30% of them by value and the profits will completely pay for a Model Y, a Cybertruck and a house for the charity my wife is starting in Africa.

The remaining OTM "short squeeze" calls I still have have a total purchase price of $7,300 and are currently worth >$1,000,000. I haven't touched my shares or LEAPs, which constitute the majority of my position. This is absolutely bonkers. I was anticipating this short squeeze for 6.5 years now and it feels surreal now that is finally arrived. And it doesn't even look over yet.

Congrats to all and thanks for the amazing community over the good and bad times. I would not be in this position so deep without this forum.
Hopefully all in a TFSA :D
 
TLDR don't sell at $900 and buy back at $700?

I agree that the stock could go to $1,000 or $2,000, but that's 5+ years off in my mind.

$1,000 today sounds like a bit much, given how recently we were at $300, but at the same time, when the Model 3 was a success I was expecting $500-$700 back then. The uncertainty around the Model 3 was reasonable, what came next (past 2 years) was not.

So maybe its just restoring the gains that they unjustly removed from the stock.
 
Just an update on my strategy (posted above): I ended up buying about 300 total OTM call contracts expiring between Feb-March. I have sold about 30% of them by value and the profits will completely pay for a Model Y, a Cybertruck and a house for the charity my wife is starting in Africa.

The remaining OTM "short squeeze" calls I still have have a total purchase price of $7,300 and are currently worth >$1,000,000. I haven't touched my shares or LEAPs, which constitute the majority of my position. This is absolutely bonkers. I was anticipating this short squeeze for 6.5 years now and it feels surreal now that is finally arrived. And it doesn't even look over yet.

Congrats to all and thanks for the amazing community over the good and bad times. I would not be in this position so deep without this forum.

That’s crazy. Well played. After a few years of squeeze talk, i mostly stopped playing the earnings and short term calls. Although going into this earnings felt different, like we turned a corner, still did not have your foresight to by 300 short term calls. Unreal. Congrats!
 
  • Like
Reactions: saniflash
I agree.

These strategies are only meant for an unexpected spike due to an unlikely combination of circumstances:
- shorts covering with too little shares available;
- algos reacting to SP rising fast, triggering an exponential rise in seconds/minutes.

The spike would in my mind only last for a few seconds/minutes, nothing more. Something like: $650, $700, $800, $1000, $1200, $900, $750, $600 all within the course of a few seconds/minutes.

As I posted above, I don't believe this will happen. But if it were, why not be prepared?

Of course I'm always upping my "good till cancelled" selling prices to about double the current SP. If we gradually rise like we have in the last months, I'm not selling anything.

How did the week work out for you?
 
How did the week work out for you?
Fairly ok.

I did not sell any shares and even cancelled my $1000/share sell order but I did deleverage at $892 by taking profits on a JAN2022 640c (2500% profit) and using those profits for 2/3 to buy more shares and keep 1/3 in cash.

Then on Thursday I put that 1/3 of cash back into LEAPS (JUN2022 1200c) when the stock hit $702.

So whilst the stock has dropped from the $900's to the $700's, I did not lose as much money as I would have done and - if we' could get back to $900 soon - I'll have more gains than I would have had.

However all the above trades were made with the trading part of my portfolio and should not be considered "smart". I just got lucky.

I'm still holding, so what we've seen this week is IMO not a true short squeeze. Price action was very squeezy on Tuesday, but not enough to pull the plug on shares. I'm waiting for a spike above $2000, THEN I'd sell some shares in a heartbeat. But not all, of course, too much room to run in the next decade(s).