Added the last two days data points. Remember this was a random start date and different dates would show different results but the general trend is similar. Anyone remember what the after hours pop was after Q1?
I remember it went to $68+ in AH on May 8 Q1. I was watching it religiously at the time because we had a lot on the line. My wife was in tears (of relief) watching the AH ticker go up.
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Be careful though because only $13,000 of gifts are tax free per year. Anything more than that and you start eating into your lifetime exclusion amount of $5million (IIRC) or you pay taxes on the gift
It's actually $14,000 a year now. Also, actually you can do a joint gift (if you're married) from you and your spouse to another person, so up to $28,000 tax-free. Just need to report it on Form 709 if doing a joint gift.
My wife and I ended up gifting the Sept13 calls to another couple, so we gave up to $28k to the other husband and up to $28k to the other wife. So, ends up being up to $56k from one couple to another.
Update: Ok, so I'll tell more of the story cause it's kind of cool. Not to brag, but to share how $6800 can possibly change the financial outlook of a family's life. So, on May 9th (day after Q1 earnings), I went on an option shopping spree and bought mostly LEAPs and some Dec13/Jan14 calls. Then, I did a quick final purchase of some Sep13 80 strike calls just for fun. Paid $6800 for 10 contracts ($6.8/share).
Anyway, to make a long story short, a few months pass and I'm thinking I could exercise those calls (but all my cash is already in TSLA stock/leaps/options and I would have to use margin), or sell and pay short-term capital gains tax (which wouldn't be cheap). So, I started to think about gifting them and how that might impact another person or family's life. So, I did some research and discovered if I gifted my Sept13 calls, then I wouldn't have to pay any tax, AND the receiving party can then exercise those calls (if they have cash to do so) and hold TSLA stock. If they keep the stock for at least a year, then they pay long-tem capital gains tax off of the gain (cost basis is value of gift when they received it).
Then, I started to think... if someone exercises 10 contracts that's 1000 shares. And if they hold until GenIII is in full production, TSLA could be $500/share and that their shares would be worth $500k. And the problem with most people getting 1000 shares right now is that it's always a difficult time to buy TSLA for someone who isn't a believer in the stock because it can always go down and it can seem over-valued to some people. So, it's hard to buy market price for those who aren't familiar with Tesla. But by me gifting option calls, I'm subsidizing their purchase so that they're getting stock for a huge discount. And I'm even more motivated to subsidize because I don't need to pay short-term capital gains taxes on the gains from my calls.
Anyway, when the stock was about $130, I started to make plans and then started the transfer process. I wanted to make sure my wife and I could transfer all 10 contracts to the other couple before the stock hit $136 or else my 10 Sep13 80 strike calls would be worth $56k and could go over the gift tax limit. It ended up transferring successfully when the stock was $135.
Now the couple we gifted it now can exercise the calls and get 1000 shares of TSLA stock for $80/share. They said they'll do so and keep it at least a few years. If they hold to GenIII full production, that would be awesome and their stock could be worth $500k... not a trivial amount. It could really help that family out. (side note: if TSLA ever gets to $1100 and they still hold the 1000 shares, they could become Teslanaires.
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All for just $6800 on May 9th.
If you have some deep ITM calls that are expiring in the next few months and you'll be needing to pay lots of income tax, you might want to consider gifting some to those it might have a big impact on. And you might suggest they exercise and hold for at least a few years too. If anyone does this, let me know (via private message) cause I'd love to hear the story.
