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Short-Term TSLA Price Movements - 2013
- Thread starter Robert.Boston
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You'd make a billion dollars (literally) if you bought 100,000 Aug13 285 contracts at $0.01 (total $100k expenditure) and the stock went to $385 by expiry. You'd be the second Tesla-b-aire (first one being Elon).
Ok, I said I'll stop. I don't think this is being productive.
I appreciate reading everyone's perspective and insight here, and usually don't have too much to contribute. I did have a few random thoughts today, though, which I thought I'd share. Not sure if this is the best thread for it, but since ultimately it relates to price movement, figure I'd drop it here. Glean from this what you can (if anything).
1) TESLA STORE -- I stopped by the Tesla Store in Century City (CA) today chatting up one of the managers there. Don't take his word as gospel, but here's what he said:
a) He was pretty emphatic that the financing model was *not* a lease. I know this has been discussed ad nauseum here and elsewhere and I'm not saying his word trumps what may appear in Tesla's filings, I'm just telling you he was pretty insistent about "correcting" another customer who called it a lease.
b) I asked him if he's been up to Fremont, and he said he's wanted to go, but he's been to busy here (with work).
c) I casually asked him about the stock. He said he's a shareholder and definitely is hyper-aware that the stock has been shooting up. I asked him if he was optimistic about earnings, and he said he didn't know what to think, other than he sells a lot of cars (specifically in the store).
d) He said no cars in Europe until September. He said there may be 1 or 2 there, but September is when they will start producing for Europe (I know -- which is it -- producing for Europe in Sept, or SELLING cars in Europe in Sept?). So he said if I want a car on the quicker side of things (1 - 2 months), better to order now before they start focusing on Europe (that obviously could be sales talk to incentivize me to buy the car asap).
e) I mentioned that my condo doesn't have a charger in the parking area and he was very quick to cite SB209, a California law that forbids a condo association from banning chargers (actually, he made it sound like the condo association would have to provide the charger, but when I looked up the law, it seems as if they simply can't prevent ME from putting one in -- as long as I have liability insurance). He also gave me the name of a company that will do the install.
f) I asked him about the store in China (referring to Beijing), but he seemed to confuse the store in Taiwan with China. But he said it's very small (presumably referring to the Taiwan one).
2) CHINA -- speaking of China, I have a *tiny* insight on the market/culture there. Someone earlier mentioned he was from China, talking about "face"/status, and I found what he said to be consistent with my experiences. Also, it's interesting to note that when people talk about American (or foreign) cars in China, typically (as I understand it) the cars produced there are done as a joint venture between Ford/GM/BMW/etc and China. I think this gets the manufacturer around the import taxes (which I'm told would double the price of the car) and makes their cars more affordable to the masses. So, for example, I saw lots of BMWs on the road with Chinese lettering on the corner of the trunk (where the model # would be located). While still BMWs, status symbols and nice cars, those BMW's were actually co-produced by BMW and China in China. While still expensive relative to other cars, this BMW evidently didn't have the onerous import taxes imposed (or at least had less of them). But what I would ALSO see, were BMW's that did NOT have the Chinese lettering, but instead had the regular (English?) model number. These were REALLY imported, VERY expensive, not made in China and were TRULY status symbols, even above a Chinese-labeled one. So there were almost two levels. Presumably someone could import an American Ford or GM or whatever (vs buying a co-pro one in China), but I didn't notice any of those. Maybe because who would buy an imported Ford for the same price you could get a co-pro BMW. This is all as I understand it, but recognize my understanding could be off.
So how does this relate to Tesla?... Well, if Tesla is not planning to produce the cars as a JV with China in China, then my understanding is that will practically double the price of what we would pay here. i.e. They will really only be affordable to the super-rich in China. Or... perhaps Tesla is planning to JV with China, as other manufacturers have. Or... perhaps there are some electric car incentives in China that would mitigate the excessive import tax.
3) SCTY/TESLA -- I haven't seen this discussed, but I'm wondering why Tesla and SCTY would report on the same day. Is there anything to read into that (results-wise)?... I'm assuming Elon is not on the SCTY call, but if the Q2 results of the two companies went in opposite directions, couldn't the news of one overtake the other?... And given that people focus on the negative, wouldn't a disappointing Quarter for SCTV take some of the shine and attention off of a great Q for Tesla (or vice-versa). I guess what I'm getting at, is I'm reaching for this to be some hopeful hint that both results are very positive. But just wishful thinking, probably.
1) TESLA STORE -- I stopped by the Tesla Store in Century City (CA) today chatting up one of the managers there. Don't take his word as gospel, but here's what he said:
a) He was pretty emphatic that the financing model was *not* a lease. I know this has been discussed ad nauseum here and elsewhere and I'm not saying his word trumps what may appear in Tesla's filings, I'm just telling you he was pretty insistent about "correcting" another customer who called it a lease.
b) I asked him if he's been up to Fremont, and he said he's wanted to go, but he's been to busy here (with work).
c) I casually asked him about the stock. He said he's a shareholder and definitely is hyper-aware that the stock has been shooting up. I asked him if he was optimistic about earnings, and he said he didn't know what to think, other than he sells a lot of cars (specifically in the store).
d) He said no cars in Europe until September. He said there may be 1 or 2 there, but September is when they will start producing for Europe (I know -- which is it -- producing for Europe in Sept, or SELLING cars in Europe in Sept?). So he said if I want a car on the quicker side of things (1 - 2 months), better to order now before they start focusing on Europe (that obviously could be sales talk to incentivize me to buy the car asap).
e) I mentioned that my condo doesn't have a charger in the parking area and he was very quick to cite SB209, a California law that forbids a condo association from banning chargers (actually, he made it sound like the condo association would have to provide the charger, but when I looked up the law, it seems as if they simply can't prevent ME from putting one in -- as long as I have liability insurance). He also gave me the name of a company that will do the install.
f) I asked him about the store in China (referring to Beijing), but he seemed to confuse the store in Taiwan with China. But he said it's very small (presumably referring to the Taiwan one).
2) CHINA -- speaking of China, I have a *tiny* insight on the market/culture there. Someone earlier mentioned he was from China, talking about "face"/status, and I found what he said to be consistent with my experiences. Also, it's interesting to note that when people talk about American (or foreign) cars in China, typically (as I understand it) the cars produced there are done as a joint venture between Ford/GM/BMW/etc and China. I think this gets the manufacturer around the import taxes (which I'm told would double the price of the car) and makes their cars more affordable to the masses. So, for example, I saw lots of BMWs on the road with Chinese lettering on the corner of the trunk (where the model # would be located). While still BMWs, status symbols and nice cars, those BMW's were actually co-produced by BMW and China in China. While still expensive relative to other cars, this BMW evidently didn't have the onerous import taxes imposed (or at least had less of them). But what I would ALSO see, were BMW's that did NOT have the Chinese lettering, but instead had the regular (English?) model number. These were REALLY imported, VERY expensive, not made in China and were TRULY status symbols, even above a Chinese-labeled one. So there were almost two levels. Presumably someone could import an American Ford or GM or whatever (vs buying a co-pro one in China), but I didn't notice any of those. Maybe because who would buy an imported Ford for the same price you could get a co-pro BMW. This is all as I understand it, but recognize my understanding could be off.
So how does this relate to Tesla?... Well, if Tesla is not planning to produce the cars as a JV with China in China, then my understanding is that will practically double the price of what we would pay here. i.e. They will really only be affordable to the super-rich in China. Or... perhaps Tesla is planning to JV with China, as other manufacturers have. Or... perhaps there are some electric car incentives in China that would mitigate the excessive import tax.
3) SCTY/TESLA -- I haven't seen this discussed, but I'm wondering why Tesla and SCTY would report on the same day. Is there anything to read into that (results-wise)?... I'm assuming Elon is not on the SCTY call, but if the Q2 results of the two companies went in opposite directions, couldn't the news of one overtake the other?... And given that people focus on the negative, wouldn't a disappointing Quarter for SCTV take some of the shine and attention off of a great Q for Tesla (or vice-versa). I guess what I'm getting at, is I'm reaching for this to be some hopeful hint that both results are very positive. But just wishful thinking, probably.
Wise for the employee to not say much about the stock. Could get him and the company in a heap o' trouble if he'd done otherwise.
100,000 options contracts on anything at my broker would cost me $200,000 or more, not something I am willing to do.
I do not purchase out of the money products ever. I want some inherent value. I only buy options on something I want to own long term, not flip.
The high emotions of instant options wealth can just as well lead to major depression and margin calls. You are lucky, not good. Learn risk control for the other side of this. Everyone makes money in a bull market, don't be one of the ones that misses the end of the road.
I do not purchase out of the money products ever. I want some inherent value. I only buy options on something I want to own long term, not flip.
The high emotions of instant options wealth can just as well lead to major depression and margin calls. You are lucky, not good. Learn risk control for the other side of this. Everyone makes money in a bull market, don't be one of the ones that misses the end of the road.
deonb
Active Member
I'm not sure inherent value means less risk when a stock is as volatile as Tesla.
Let's say you buy $130 calls. It has some inherent value alright, and it will cost you $15.90. Or you can buy twice as many $145 calls. No inherent value, and the two will cost you $15.20.
I can guarantee that on any bad, mediocre or even mild positive news tomorrow, the fact that you have a $130 ITM is useless. It will gap down over it, and your $130 will be lost the same way as a $145 would be lost. But if there is a > 10% gap up, you'll net more on the 2x 145's than on the 1x 130.
Ahh, ok, I see - you meant deep in the money.
Fair enough, shall we take $100? Price of that is $42.15. Buy 1 of them or buy 4x 150's for half the price ($21).
It Tesla gaps down by 15% you would lose $21 on both, but with the 150's your losses are capped at $21, where you stand to lose $42 on the $100's if it drops further.
If Tesla gaps up by 15% they would be worth the same, and over that the 150's are 4 times better.
Unless you think that the ER is going to come out in such a way that it will instantly devolatilize TSLA, your exposure and risk is more with ITM than OTM, for less reward.
I know of no broker that will let you buy options on margin.
The majority of people in the world can go into a Casino, lose money and not go into major depression or debt. Some can't - they should probably stay away from options as well. However, option trading has a much more precisely and clearly defined risk profile than going to a Casino. You just need to understand the risk.
Can you outperform the S&P500 over 10 years by doing general option trading? Most likely not. But it's a lot more fun than buying SHW and watching it dry.
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Jonathan Hewitt
Active Member
I learned this the hard way with SPWR. I bought short term ITM calls right before the earnings report. $25 calls while it was just under $28. I thought it would retain a lot more value if the stock dropped than OTM. Well, they're basically worthless right now. Also, if the stock had gone up they wouldn't have netted me nearly as much return as OTM calls. For short term calls go big or go home, and only go big in a small way so that you're not upset when you lose it all!
Lesson learned.- - - Updated - - -
Nicely played (I had to look up SHW
me too! lol, stock jokes, I love it.
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It felt like Christmas when I woke up today. The only problem is I don't know if I've been good this year. I really hope Santa doesn't bring coal! So dirty...
Zzzz...
Member
Elon actually said that there would be Tesla factory in China eventually, aiming to produce cars from local components. So there is a plan. Unfortunately I could not find an interview, it was posted on YouTube.
In a separate speech Elon said that current Model S do not use parts imported from China, reason for that is because they are expansive, they cost 10% to 20% more. Which make perfect sense, Chinese auto industry is not competitive on international scale yet.
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Weak longs are going to get shaken out. This is bait for the shorts. Healthy pullback.
Yes, indeed. This appears to be another set of hedge fund short selling attacks often seen during the first ninety minutes of trading. We usually see them on Tuesdays, but those today are on greater volume. They trigger cascades through tight stop loss limits set by weak longs. The initiators of the attacks can leisurely cover at a profit throughout the day or perhaps another day.
The weak longs are short term traders, many of them day traders. As more and more affluent people become Model S owners, I suspect many of them also become strong long term shareholders due to great satisfaction with the product. They buy from the short sellers and the weak longs. They are not usually on margin, and despite owning thousands of shares of TSLA, it is not likely a majority of their assets. They are confident the company will be a success and can ignore price swings.
As the base of strong buy & hold shareholders grows, short selling attacks will become less and less successful. For a while pundits and analysts will continue to be puzzled by a share price seemingly not justified by current fundamentals. It will be supported by rock solid shareholders believing in the potential of the company eventually bearing bountiful fruit. If they are not selling, then any dips would be brief and the ultimate gains unlimited.
CyberDutchie
Active Member
Curt, do you think today's attack has anything to do with earning release after the close?
Citizen-T
Active Member
If you mean, "is it a commentary on what the market things is going to happen?" I'd say, "no". The stock has run up a lot in a very short period of time, it is just a good target for this kind of strategy. If you look around the market you see a general risk-off trade happening because of Fed tapering fears. You'll also see that TSLA is holding up quite well given it is definitely a risk-on stock. Its peers are getting obliterated. Look at the solar stocks for instance.
Curt, Dave T, Sleepy, Citizen...I have been waiting for another buying opportunity. Predictions on stabilization point today? Would it be wiser (I know these are opinions and not facts...I will not hold anyone to their predictions) to wait for aftermarket or Thursday for a better buying opportunity?
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