Short-Term TSLA Price Movements - 2013

[blakegallagher]

About 10 minutes left in the market. What is everyone doing? I've bought small # of calls, but didn't have the cojones to go all in yet.

I am all in again after selling some before market close yesterday.... Why is the market about to close early? Columbo day?

 

[spacekadet]

I am all in again after selling some before market close yesterday.... Why is the market about to close early? Columbo day?

It always closes at 4pm EST.

 

[Mario Kadastik]

Maybe you've got your clock wrong blakegallagher But the market closes most days at 4 PM

I'm contemplating if I should take a minor loss in the weekly calls to reduce position or not. I was hoping it'd cross into green at least for a moment to halve my position. I'll probably close some before the bell chimes.

 

[blakegallagher]

lol my mistake ... got a new chromebook (thanks tsla) and the clock on it is a few hours behind ...

 

[Mario Kadastik]

Well didn't manage to halve my position, the trade didn't go through when I sent it seconds before close :/ oh well, let's hope the deal is signed and Tesla pops tomorrow. Though I hate hoping in investing...

 

[ckessel]

I'm pretty much set until earnings. My calls are for Nov 16th already bought a few weeks ago (and stock +Jan 2015 LEAPS for longer term). The only thing that might get me to change at this point is if TSLA stays down going into earnings week, I might buy a bunch of weekly lottery tickets that are OTM by $10-15 and see what happens. The next day Q1 and Q2 pops were big. While Q3 is expecting more out of Tesla, Tesla looks like it may still give a big surprise, particularly if they raise the official guidance for 2014 significantly.

Regardless though, I won't be gambling more than whatever profit I've got between then and now so the worst case is minimized.

 

[Steve NH]

Ok, I need a little help buying the right option here while its in the red for the day.

What would you guys go for? Right now I have a Nov 16 $190.

Not going for big bucks, just trying to educate myself.

My belief, which I think is in line with most other here, is that Q3 earnings will be significantly above estimates. I want to capitalize off that.

Few things to note:
Premium Decay is greatest the last 4 weeks. (Regardless of the stock movement - you will lose premium every day)
For that reason buying 45 days out or more (90 is good) you will see less premium decay over the next 3-4 weeks (almost not noticeable)
So even if you will only keep the option 3 weeks - if you buy Nov option you will lose almost all the premium, where as if you buy Jan calls - you lose very little premium over the next 3 weeks
On your 190 calls - since it is currently Out Of The Money - everything you paid is 100% premium. Between now and Nov 16 - that will all decay to 0
If you hold to expiration - the stock will have to close over about 202.00 for you to break even

Right now - If I expect to hold the option 1 week or more - I am buying Dec and Jan options.. Daytradeing I do buy Nov options (with day trading - premium decay not an issue)

I almost always buy Delta 70 or higher options - Keeping in mind Delta can tell you how much your option will increase as stock price increases.
a Delta 70 really means for every $ 1.00 the stock goes up - the option will go u $ .70 (premium decay still working against you tho)

Daytrading I may buy delta 90 or 100 to capture the full stock movement

I am sure others have different opinions/strategies

 

[Cameron]

Currently all in on Nov calls and some Oct 19th & 25th calls. Once this govt deal goes through, we have about 3 weeks till Q3 and no foreseeable speed bumps on the way there!

 

[Johann Koeber]

You know, I've been eyeing the time zone fit for a while now. Europe seems to be a perfect fit. In US west coast, the big moves have already happened before I wake up.

Any recommendation on a country where I can just relax, rent a room and trade with lots of cafes that has internet connection?

I suggest Germany. Good infrastructure, fast internet, excellent coffee.

PM me when you're ready.

 

[Jeepinjake]

Few things to note:
Premium Decay is greatest the last 4 weeks. (Regardless of the stock movement - you will lose premium every day)
For that reason buying 45 days out or more (90 is good) you will see less premium decay over the next 3-4 weeks (almost not noticeable)
So even if you will only keep the option 3 weeks - if you buy Nov option you will lose almost all the premium, where as if you buy Jan calls - you lose very little premium over the next 3 weeks
On your 190 calls - since it is currently Out Of The Money - everything you paid is 100% premium. Between now and Nov 16 - that will all decay to 0
If you hold to expiration - the stock will have to close over about 202.00 for you to break even

Right now - If I expect to hold the option 1 week or more - I am buying Dec and Jan options.. Daytradeing I do buy Nov options (with day trading - premium decay not an issue)

I almost always buy Delta 70 or higher options - Keeping in mind Delta can tell you how much your option will increase as stock price increases.
a Delta 70 really means for every $ 1.00 the stock goes up - the option will go u $ .70 (premium decay still working against you tho)

Daytrading I may buy delta 90 or 100 to capture the full stock movement

I am sure others have different opinions/strategies

Really helpful explanation! With this in mind, I think I'm more interested in options with a longer term (as I'm less concerned with day to day action, and more concerned with month to month/quarter to quarter action)

Does decay tend to happen on an even curve, or does decay accelerate the closer to expiration (during those last 4 weeks)? I know there is a thread for newbie options trading, so I won't clutter up this discussion anymore with my questions.

Thanks!

 

[Mario Kadastik]

It accelerates the closer one gets to expiration

 

[Steve NH]

Roughly
1 month out - 100 % decay in 1 month

2 months out.. 25% is lost the first month.. 75 % lost the second month

3 months out 15 % is lost the first month 20 % lost the second month 65 % lost the last month.

Simple way to tell how much "Premium' is in the option price.

If option is In The Money Option Price - (Current Price-Strike Price)
Example Nov 180 Option currently selling for $ 17.30 (ish) Current stock price 182.50 (ish)
17.30- (182.5-180) or 17.30-2.50 or $ 14.80
That is the Premium that will be lost between now and expiration - The stock will have to increase by that much just to break even.

If the Option is currently Out of the Money - then the whole cost of the option is premium...

But look at the Nov 140 calls yes much more expensive (not really) at $ 45.00 ish but...
45.00- (182.5-140) 45.00 - $42.5 $ 2.50 in Premium

 

[CyberDutchie]

Once this govt deal goes through, we have about 3 weeks till Q3 and no foreseeable speed bumps on the way there!

Well, what if more idiot analysts come out of the blue and start screaming bubble and downgrade? God, I hate these people!

 

[arashlzy]

+ news

Time for Elon to tweet something positive...maybe he is going to start his cross country trip?

 

[ckessel]

Well, what if more idiot analysts come out of the blue and start screaming bubble and downgrade? God, I hate these people!

TSLA has always been fighting that headwind, so I'm not particularly worried it'll have more than a blip impact.

 

[austinEV]

Time for Elon to tweet something positive...maybe he is going to start his cross country trip?

I think the point of the cross country trip is to use installed superchargers all along the route, so we are missing about 15 SC installations.

 

[arashlzy]

Why are we down a point in after hrs?

 

[Jhall118]

Why are we down a point in after hrs?

I have a theory....

Of the 29,618 shares traded so far, a slightly higher number were sold than bought?

 

[brianstorms]

SEC document update. Looks like Straubel bought some shares. A tiny hint of good news to come?

 

[fjm9898]

i dont think 75 shares would be something that he would purchase to make a move. Seems like a small amount for an a major player, maybe he likes round percentages of ownership and need a few more shares haha.