kevin99
Member
The price action today is a lot slower. I would think the sell off pressure has subsided.
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oops, not so fast. Back to $173 something.
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oops, not so fast. Back to $173 something.
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Short-Term TSLA Price Movements - 2013
- Thread starter Robert.Boston
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Norbert
TSLA will win
It's also still the safest on the road.
Even in terms of fires, at least as far as we know, no one has died in a Model S yet (although that day will have to come), fire or not.
And unless there are fires we don't know about, the number of Tesla cars having a fire is *at least* 5x lower than the average of ICE cars.
I just got my options account funded with some money I can afford to play with and am looking to make my first trade and was hoping to receive some suggestions from more experienced traders. I am bullish on TSLA and think we will see a further upward trend towards QE3. What would you guys recommend Nov13 or Dec13? Deep OTM like 210 or closer to ITM? I know it's difficult to give someone else investment advice but I would appreciate it.
kevin99
Member
I see two questions on this, one from Aznt. So I will share my rational.
If I were to play Q3 now, Nov13 is sufficient.
As for strike price, I tent to buy more ITM rather than far out OTM. I do pay more on the premium, but I drastically improve my chance of making a profit rather than just a empty hope of "if TSLA goes to $220, I will have 10x return", those hopes tend to vaporize and the money on the calls goes to zero. I usually am on the other side of the trade for this kind of OTM call.
And a standard disclaimer: Invest at your own risk. This is my own rational and does not represent universal truth.
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The veterans in this playground will surely point you in the correct direction, but here's the way I look at it.
Firstly, I'm assuming you mean calls and that you expect the stock to go up to 200 sometime before Feb 2014.
Secondly, I'll assume you want to do Nov because Oct is "too soon / expiration too close" and Dec is "too long" to keep the money tied up.
Thirdly, I'll assume you asked this question before market open and the stock is at $173.31/sh.
This leaves a range of calls to consider but let's simplify to 3: Nov 170, Nov 185, Nov 200.
Nov 170: You'd be splitting your investment between time value and share value. This is like buying a mixture of calls and some stock, from my perspective. I generally prefer "pure timevalue investment" when buying calls/puts, and thus I typically won't give these much thought.
Nov 185: $12 above the market and cost $2-$4 (rough estimate, don't have yesterday's numbers handy)
Nov 200: $27 above the market and cost $1-$2 (rough estimate, don't have yesterday's numbers handy)
So your decision is: Do I want to watch the stock closely and be ready to make a move very quickly? If yes, then the higher risk of the 200s has a higher opportunity for reward. If no, then the lower risk of the 185s is more appealing. Note that (using the numbers above) you can buy twice as many Nov 200s as Nov 185s so movement in the 200s is felt (loss or profit) far more quickly.
Alright, thanks Kevin that made sense. So Nov13 185 it is and a OctWk2 185 just for fun, in case we have a quick recovery next week. My first trade, very exciting
By the way. Would a Nov13 185 be considered ITM?Speaking for the OTM call buyer, exercising the option is never an expectation or involved in my calculation. It's all about maximum return for buy-then-sell (or sell-then-buy) of the call option, not the underlying stock.
Ended up doing a blend. Bought some common shares and then a purely speculative play with Nov 200 C's (again). I am not doing weekly's my risk tolerance isn't that great lol. I actually expect Tesla to break the 200 mark by the Q3 earnings call because that's when we'll have a REALLY good estimation of how the year will end.
Currently, no. When the stock is above $185/sh anytime between now and expiration it will be "in the money". Basically it's as simple as (a) the option is not expired and (b) the stock price (currently 175) is above the strike price of the option (185) [175 is not >= 185, so not currently "in the money"].
This is for calls. For puts the terminology is somewhat more complicated than I'm willing to describe this early in the morning.
Gtoffo
Member
I agree....but then again sometimes those bets do pay off....I never do it but I guess for a small portion of your portfolio it makes sense.
Today I got back into the game. I bought a Bull call spread for nov15 at the 175-200 strikes. I'm not at all certain that Tesla has found stable ground but the wait was killing me. I think the stock will skyrocket or collapse when Elon/Tesla respond to the fire and I'm betting the odds of going up are (slightly) higher.
Would have just bought the calls if I could in the hopes of building the spread for zero risk but I'm pretty much maxed out with my margin so I unfortunately couldn't afford it.
kevin99
Member
Gtoffo
Member
I have a feeling in my gut that tells me Tesla will release a statement at about 3PM/4PM EST (lunch time for you cali guys). It's been 3 days and that's a good amount of time for the team to fully assess. 1. Collection 2. Analysis 3. Proofreading Today: Release.
Counterbets:
1. If there's no release before Monday, Elon will be tweeting on Monday or Tuesday.
2. At least 25% of the feedback on said tweet will include words like "ill-advised" and "aggressive" and "surprised his handlers didn't muzzle him somewhat".
kevin99
Member
One has to trace back usually when he tweet about Tesla? The man got to has his own schedule, sleep at 3am and wake up at 10am? I've seen him tweet at 2am? but never at 8am?
I'd love to see that happens. However I also remind myself my trades can't be based on these hopes.
Nevertheless, it is a speculative bet in such unusual unusual situation.
Gtoffo
Member
Quick fact: when the Broder NYT article was released (2/8) it took Elon three days to respond on twitter (2/10) and another day to release his blog post with the logs (2/11).
In that case Tesla had all the evidence at hand and only needed to elaborate the response. In this case the causes will need to be investigated thoroughly. My bet is that Elon will tweet some preliminary results as soon as he is confident the causes have been established (especially if it turns out that there isn't anything inherently wrong with the car) and then we will see a complete response by Tesla.
In that case Tesla had all the evidence at hand and only needed to elaborate the response. In this case the causes will need to be investigated thoroughly. My bet is that Elon will tweet some preliminary results as soon as he is confident the causes have been established (especially if it turns out that there isn't anything inherently wrong with the car) and then we will see a complete response by Tesla.
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