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Citizen-T
Active Member
The Blue Owl
Endangerous Herbivore
TSLA is moving with the market, so it's difficult to call a TSLA-specific bottom. NASDAQ stocks are locked in a synchronized dance, tracking the underlying fear (bottom chart is the VIX):
Incredulocious
LEAF → RAV4EV → Model 3 → Model Y
Well, no... it's actually just published rumors of talks with Comcast to provide better streaming performance, possibly similar to the recent deal with NetFlix, possibly with additional requirements of equipment investments:
Apple discussing new streaming set-top box with Comcast - report
It is one of the very few tech stocks in positive territory this morning but unfortunately not making up for the additional 6.5% drop in TSLA this morning.... (sigh).
This is likely Apple building out their own CDN instead of outsourcing it.
I bought a smattering of TSLA options under 215. Didn't quite catch the 210 lows.
Also, Doug Kass on twitter:
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Yes. A good day for shorts. They will have them occasionally. I have orders in but for lower than the current price. This just does not feel like the bottom to me. I may miss out and I am OK with that. Also, may roll some LEAPS. I have no short term options but there is certainly a good deal of profit to be had this week if you just pick the right side.....but which:wink:
Norse
Active Member
Mario Kadastik
Active Member
So how do people profit from this situation who are already 100% invested in LEAPs. I'm contemplating selling a minor part of LEAPs to buy some shorter term calls or should I roll down/up... just thinking what are good strategies as probably holding Jan $400's can easily outlast the fall if it's short term, but contemplating if I can somehow enhance my position.
InTheShadows
Active Member
I would consider selling off a little long term if you are confident in your short term guessing ability. I bought some 225 weekly calls whenwe hit 216, up nicely right now...but who knows what tomorrow brings. They were the ONLY green thing in my entire portfolio today......(except Western Lithium Mining up a whopping 2 cents!)
With a large LEAPS play, I recommend keeping an underpinning of stock for just such occasions as these. i.e. I just converted half my stock today to the shorter LEAPS 'leg' (J15 $300, but higher strike works fine too). When TSLA recovers over the next weeks, I'll close those new positions and return it to stock- use this method to build the stock position (or keep the position while precipitating cash).
Assuming you don't currently have a stock position for this play, then the next best option is to take a portion of your lowest strike LEAP (because you'll be scheduling that for rollup at some point anyway) and move the expiration in to bring the leverage up. The extra risk justified by the corresponding reduction in risk of the current TSLA price. I used this method (before the above mentioned stock hold method) to build a stock position. As TSLA recovers over the next weeks/months, and it becomes time to roll those converted LEAPS (even if not yet ITM), roll them not to their original LEAP position but all the way out to where you would have rolled them to originally- this will precipitate extra return even while returning your original LEAPS holdings- use that to buy TSLA stock- repeat until you have an underlying stock position to use the preferred method.
Here's one more possible play that has worked for me in the past- this is especially good if you anticipate the timing of certain events as may be the case with Tesla. If you currently hold LEAPS in both J15 and J16 expirations (as a stock replacement objective recommends- just for this reason), then you can take a portion of the J16 and leverage up by increasing the J15 position. You can always return to J16 of course if TSLA recovers rapidly (again using the extra profit to generate stock position for next time). But if it recovers more slowly, consider that J17 options will become available later this year (Nov I think, can't remember the exact cycle Tesla is on right now)- normally your current your J15s would be long rolled up and/or out by then, but you could take the just moved J16>J15 and hold them (higher risk) until those J17s come up and use them for the J17 purchase. The risk might be justified in Tesla case because of the confluence of ModX end of this year, along with rumor of GenIII reveal in Jan (whether or not it actually will happen of course). Just throwing that one out there because it's always a bit funky when the new LEAPS come up (strikes can be limited etc)- so I've often used these pullbacks to pre-leverage into that event later this year.
Citizen-T
Active Member
I became net long when those puts expired on Friday. I was a buyer today at 219ish and again at 211ish.
Still have plenty of cash set aside for buying more TSLA should the opportunity arise.
You are thinking that number of cars in transit will be higher based on the assumption that delay is caused by the pipe (in transit time) becoming longer. Another possible, and IMO much more likely reason for the delay, could be simply that initial allocation of production for China happened later then expected. If the latter is true, the quantity of cars in transit will not change as compared to what Tesla guided for.
Here's my chart for TSLA. I was frankly shocked how bad TSLA was beaten today when it hit an expected low of 210 considering how high the short interest all ready is. I expected the low to be at 217 at worst but I'm guessing a lot of stop loss orders were triggered and a cascade occurred. On top of that, I wasn't expecting a climb back up to 220 at the close.
So what to expect from TSLA for the next few days? I honestly don't know. I was expecting a reversal when it hit the bottom of the channel on Thursday but that didn't happen. What I do know is that the gap has filled, TSLA is oversold, there have been too many selling days in the last month, a high short interest, and TSLA seems to be in a downtrend (at least in the short-term). With all these circumstances, I think a rally is in order. However, if this downtrend continues to play out a little, TSLA will have to close above 236.75 tomorrow to completely reverse course or it can stay flat for the next week or so and meet the downward resistance at 226 then go from there. I think the most likely scenario is TSLA gains a little back tomorrow then stays relatively flat around 225 for the next week allowing it to break out of this downtrend then perhaps a rally back above 230.
So what to expect from TSLA for the next few days? I honestly don't know. I was expecting a reversal when it hit the bottom of the channel on Thursday but that didn't happen. What I do know is that the gap has filled, TSLA is oversold, there have been too many selling days in the last month, a high short interest, and TSLA seems to be in a downtrend (at least in the short-term). With all these circumstances, I think a rally is in order. However, if this downtrend continues to play out a little, TSLA will have to close above 236.75 tomorrow to completely reverse course or it can stay flat for the next week or so and meet the downward resistance at 226 then go from there. I think the most likely scenario is TSLA gains a little back tomorrow then stays relatively flat around 225 for the next week allowing it to break out of this downtrend then perhaps a rally back above 230.
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