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Short-Term TSLA Price Movements - 2013
- Thread starter Robert.Boston
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FredTMC
Model S VIN #4925
News of Fidelity reducing its position has some drag on a TSLA today. That accounts for some of the muted rally IMO. Doesn't worry me, just explanation of why TSLAs not up more today
Well look at you...the optimist!:biggrin: I think I will be a little more cautious than you and keep some cash on the sidelines for at least another day(s). I am willing to miss out on that 2%, 'gambling' that by waiting I may make 4%. You have been scarily (a word??) correct almost every time before so your read is probably better than mine on this one.
Why? I think the opposite will happen. Some people will need to unload/reduce positions.
Johann Koeber
Happy Owner
Does that mean I will possibly receive a margin call tomorrow?
The margin requirement on these stocks, which make up about 40 % of my portfolio, will be 35 %. How much was it for TSLA before?
I am a contrarian investor. When everyone is saying to buy a stock, I will sell. When CNBC starts talking about AAPL everyday, that is a sign to sell. When every commercial on CNBC is about investing in gold, it is time to sell gold.
When brokerages finally make margin requirements stricter (when they should have done this two weeks ago), then it means that this is the bottom for those stocks.
Everybody is always too reactive instead of being proactive.
This is how I read it, but feel free to read it however you like.
I think it was 15% before like for all "normal" stocks. If you are with IB IMO (not sure, check it!) you would not get a margin call tomorrow, because IB increased the requirement for TSLA already yesterday and it took immediate effect. So today they didn't change anything to TSLA imo, but they announced, they will probably further increase.
I had a VERY SCARY awakining this morning. I had lots of this weeks OTM options on TSLA, and although TSLA went up $6 over night and my net liquidation value went up as well I got a margin call and had some forced liquidations. It took me quite some time to find out why the margin requirement increased more than my net liquidation value (never had that before).
After talking to an IB representative the cause were those far OTM short term call options that I held. The margin requirement on those was 25 times (!!) their value, and with each dollar TSLA went up the margin requirement increased. The IB guy explained to me this is because the higher TSLA goes it increases the likelyhood the OTM option goes into the money. If they would go into the money I would no way have had the amount of money to exercise them.
The problem got worse through yesterday's margin increase for TSLA, because IB calculates for 30-35% margin now instead of 15% before, so they seem to see more risk in holding short term OTM options.
I still don't really get it, because I don't see the risk for IB. They could simply charge 1 x margin requirement for the option and prevent me from exercising them (in the case they went ITM). Instead they blocked 25 times their value in margin and seemed to assume it could move ITM and I would exercise it...very strange.
I now sold most of those OTM options for almost nothing and this seems to have solved the problem.
But I got REALLY scared this morning when I saw my margin deficit increase with every $ TSLA and my net liquidation value went up. It was so counter intuitive..
Please excuse my grammar, english is not my native language.
Precisely. If you study behavioral finance, some hedge fund managers made a ton back in 2008 because a cab driver in NYC was telling them what stocks to buy and they shorted it and made a fortune.
It also makes it more expensive to short.
TSLA is talked about very extensively on CNBC lately. CNBC had an entire day of TSLA coverage with a factory visit at the end of August 2013: Elon Musk: Tired but optimistic about Tesla's future So I came to the same conclusion...added to my short.
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good point. I certainly hope you are right, since I'm quite long on TSLA.
I was forced to close quite a huge long position today, and I am wondering how many others are forced to do the same as well. So how big of an effect has that (forced liquidations through margin requirement increases)?
Mario Kadastik
Active Member
My broker told me that it does apply to me, but the list is the following:
AAOI, AIRI, ASC, AVID, AXGN, BAA, BIND, BIOA, CCCR, CCXI, CGIX, CNAT, CPTA, DVAX, ECTE, EVOK, FATE, FPRX, FSFR, GARS, HTBX, ICLD, LIQD, MNDL, MODN, MRTX, MWRX, NOR, NRCIB, NSTG, OHRP, OTEL, PED, PPSI, QLTI, RGDO, RNA, SAMG, SPCB, SPHS, SQBG, STRP, SVVC, TGD, THST, TNXP, TRX, VICL, XGTI, XTLB.
AAOI, AIRI, ASC, AVID, AXGN, BAA, BIND, BIOA, CCCR, CCXI, CGIX, CNAT, CPTA, DVAX, ECTE, EVOK, FATE, FPRX, FSFR, GARS, HTBX, ICLD, LIQD, MNDL, MODN, MRTX, MWRX, NOR, NRCIB, NSTG, OHRP, OTEL, PED, PPSI, QLTI, RGDO, RNA, SAMG, SPCB, SPHS, SQBG, STRP, SVVC, TGD, THST, TNXP, TRX, VICL, XGTI, XTLB.
That looks like an older list released from IB a few days ago. The second list was just released today and contains 39 new stocks (including familiar retail stocks like NFLX and FB):
http://ibkb.interactivebrokers.com/node/2113
Maybe other brokers linked to IB haven't processed the second list yet.
InTheShadows
Active Member
How are you feeling about your 210's? I have 200's that I'm a bit concerned about now. Especially if they push this government stuff off.
Not only the news; they had to actually sell those shares over the last few days too...
They'd have to finish fairly well ITM though to be more profitable than a lower call value though, right? If it just squeaks over to 215 or some such, you probably didn't get enough leverage off of the small premium to overcome the high target.
[moderator's note: posts about the government shutdown/budget/CR/debt-ceiling were moved to Government Shutdown/Debt Limit - Issues and Timelines for Investors ]
Great info in this video of Jurveston interviewing Musk. Live Virtual Event - Elon Musk, CEO Tesla | Alumni Association
My favorite part is when Jurveston tells about being at a Google event and Larry Page tells him, "How much Money am I worth?...If I were to be hit by a bus I should leave all my money to Elon Musk".
No doubt in my mind Tesla will have all the money they need to bring Model E to market.
Also noteworthy, Musk says it was super-obvious to him 22 years ago when he was a sophomore in college that all cars would eventually be electric.
My favorite part is when Jurveston tells about being at a Google event and Larry Page tells him, "How much Money am I worth?...If I were to be hit by a bus I should leave all my money to Elon Musk".
No doubt in my mind Tesla will have all the money they need to bring Model E to market.
Also noteworthy, Musk says it was super-obvious to him 22 years ago when he was a sophomore in college that all cars would eventually be electric.
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