Short-Term TSLA Price Movements - 2016

[SBenson]

Guidance of Q2 deliveries at about 25,000 is wishful thinking and highly unrealistic. Correct me if I'm wrong, but in Tesla's latest Q4FY15 filings/report on Feb. 10, 2016, the shareholders' letter on pg. 4 stated that Q1(FY16) is expected to be about 16,000. For Q2 to be at 25,000 would indicate of flat line production rate from Q2-Q4 of FY16: 16K+25K+25K+25K=91K, which would exceed their top end guidance of 80,000-90,000 cars delivered. Such scenario is not plausible and doesn't properly illustrate a ramping up on production. For an example, a linear ramp up of production such as 16K+20K+24K+28K=88K, which would get them close to their guided high end of deliveries.

My speculation might be as good as yours on this one.

Here are a few thoughts that went into my 25K Q2 comment.

- Musk mentioned in several occasions that X will have an exponential ramp. Pretty sure he even said it will only take a quarter for a full ramp, or something along the lines of half the time it took to ramp S. To add, in the European visit someone asked about the X ramp and he said something like - "we should be doing 1000/week by end of... well, sometime in Q2". To me it appeared that a Q1 exit run rate of 1K/week of X was a distinct possibility and Musk was trying to hedge himself.

- Someone recently posted in this thread saying that in a recent factory visit the person spotted almost 1:1 ratio of S vs X being produced.

- I was talking about production more so than deliveries. They need to stuff the pipeline two folds this year (one for S, which was partly emptied last quarter and maybe even this quarter and the other for X). So there can be significant gap between deliveries and production. If they manage it very tightly, the gap can be reduced and the pipeline filling can be spread out over a longer time frame. But given the prospect of ABL, maybe there is no need for it in management's view... In a nut shell, how large the gap will be and for how long is very much up in the air.

A very linear projection the way you laid out was never guided by Musk or anyone at Tesla. That just doesn't look right to me based on everything I have observed so far.

 

[Ulmo]

Angry at myself for the casino attitude I had that let me watch my winnings tumble from $35K to $0K, and remembering back to two days ago when I wanted to exit near the top but concerned that it would put my account in "DT Call" status (which I later read basically means they are displeased until you do it 4 more times), I popped that DT Call cherry today. I was very conservative, so only made $3K, which if I had a crystal ball I could have slammed in $21K (erasing my casino attitude yesterday), but I'm basically satisfied I punched myself to be more disciplined and less timid.

Actually, it's a bit upsetting. I was using today's first big gamble of win or lose ~$2K as a litmus test of whether I'd be in the stock market at all for the next 4-5 years. I was about to go back to my life as an hourly employee, buy land, solar panels, and tax payment, as soon as I lost $2K, but instead I'm considering staying in this damned trading game because I failed the stupid litmus test and earned $1,600 on that last mea culpa. Damnit! I can't seem to get anything right. Up only $5K in 3 weeks. That's the same as my hourly employee income if I decided to work instead.

Sigh. If I hadn't played around with AAPL like an idiot, I might have taken a different path, but who knows.

You know what? This is a futures game. The fact I'm discussing the past means either that's a sign to me I'm not for this game, or I need to change my attitude about everything in life. I can rest easy knowing time will tell

I knew I should have taken my unique knowledge more seriously and turned down that job offer when I should have been studying how all this market stuff works. I would have been a lot less ignorant the last week, and might have walked away with at least some of my unique knowledge winnings. (Ftr, that unique knowledge was reading this forum and knowing Model X deliveries were back on track 10 days before the stocks factored that back in.)

Edit: during yesterday's fall, I decided it would fall to around 220, because that's where it was before it fell in the winter valley, and seemed to match similar expectations to right now (Model X was announced and expectations were shipping product which is what we have right now). (Why I held in at 228 after I made that prediction I can't fathom.) It ended around 221, and is around there again right now ... I think the day traders are comfortable around 223 today. Up but not by as much. Last night I learned from this forum that the terrorist attack affected all stocks and helped push TSLA down; had I known that before, I would have had the proper amount of skittishness, I'm pretty sure. There's no other way I could have learned that, though, because what a small foreign terrorist attack has to do with electric cars I can't fathom.

I'm currently not in market, and will tempt it here and there the next few weeks around the announcement, hopefully not crashing. Upside looks great but I have nowhere near the confidence and fundamental knowledge I had during the X ramp up, and there's even more potential for downside.

 

[SBenson]

I cannot think of a time when a product announcement did not cause a short or long term drop afterwards. The question is, is this time different? Several of us are on record saying that this has the makings of the exception.

1) Previous announcements (except the S) have been for the "optional" model X or just features for the cars (autopilot, dual). This is arguably the MAIN product of Elon's master plan, therefore everything hinges on it. If it is disappointing the stock will tank. If it is good to great a risk is removed. Those other announcements were good for consumers, but nothing really for shareholders.

2) This announcement comes with what amounts to a free capital raise. The Bears were salivating at cash problems 1-2 quarters ago. Well, each 100k reservations is $100M of free loan money, more or less. (Yes, TM can use the money however they want. There is no magic lockbox before someone brings that up).

3) This announcement comes with a ton of free publicity and public engagement. There are literally 100's of millions of people who are either interested in the model S/X but cannot afford them or deliberately ignore this "luxury" automaker because there is no point forming an opinion about a $100k vehicle. With a $35k car millions of new people will flip the switch that says "someday I want a Tesla". If 1% of them buy a share of stock...

Edit: 4) Also, Q1 deliveries come out right away, so there is less of a "news desert" after this.

5) Tin foil hat theory is that Elon plans to deliberately burn the shorts to raise the stock price to do a capital raise. Now is an attractive time to pull such a thing by deliberately bunching up some good news items. The other candidate time would be mid Aug for Q2 results.


It is a massive game of chicken. Very high short interest raises the stakes. If the stock pushes up on the next trading day there is a very high chance of new longs coming in, shorts panicking etc. But the opposite narrative is possible: If the stock trades lower new longs will bail and people might conclude it is in fact a sell-the-news event.

I am very long here.

Just as a fun exercise I looked at early iPhone unveiling events. None of them (from version 1 to 3GS) produced a stock run up in the next few days.

I think we have been hyping ourselves up too much for the event. I am really not expecting a big run up in the stock post-event. Tesla is by all means is one of the most popular stocks in the market. Its not like some folks will discover a company which they never heard of before. Just a gut feeling that the stock will drop post-event. If it does, I will consider stepping up my game even more to capture a Q2/Q3 ER squeeze.

 

[austinEV]

on topic



Thank you, austinEV, I agree it's a massive game of chicken.
I am long here for all the reasons you have given.

And furthermore, looking to next week, if the price floats up anywhere near the ATH before reveal, I will stay long.

And my reason is:

SP likely won't get near ATH (even with good macro) unless Musk nudges it up with news/leaks.
If Musk nudges it up, it signals to me that he wants to be high before reveal to catapult it even higher after.
If no more newsy stuff comes from Musk between now and reveal, it signals to me that Musk is happy to let SP do its own thing around the reveal, and that the post Reveal Capital Raise (which I had expected) is off for now.​

Another perspective is that we have not, not, not had a run up prior to this announcement that would deserve a sell the news. We have tracked the indices with a high beta, today shaping up to be a small exception maybe. Still the market won't care what I think is "deserved" but there is no irrational run up. We are right at the 200day which has been the median for the last few years.

Your reason is a good insight. *IF* your primary reason to be long was the theory that they might be deliberately crafting a higher stock price, you could indeed try to read those tea leaves. BUT I don't foresee any news/nudging until March 31. He could do a "one more thing..." at the reveal (100kWh is my oft-repeated guess) or just mention that (take your pick) 1) Q1 deliveries were at or above guidance 2) Model X is running at 800/900/1000 per week 3) all 90kWh vehicles have been 100 for a while (they couldn't say that earlier without osbourning X sales, so they had to wait for X's to be coming out in volume. Thus they shipped 100's as 90's for continuity of supply, just as they did with A/P hardware) 3) good financial results for Q1

In short I think any confluence of announcements couldn't happen earlier than March 31, so there are no tea leaves to read yet. But it is an interesting thing to consider.

 

[Fallenone]

Slightly off-topic, but pls help. Define Foxconnolisation or foxconnolization. Both terms were googlewhacked and pointed right back to this forum - single search result, I honestly didn't think that was possible any more...

As others have pointed out, Foxcon is a contracted manufacture for other companies. It helps Apple to reach high volume production and high margin on the iPhones. So I guess Foxconnolisaztion for Tesla means finding someone and outsource the non-essential manufacture work so the production volume can scale up greatly at a cheap price.

 

[lango]

I think the push upwards for Model 3 will be dependent on reservation numbers. The actual reveal event I think has a high chance of being a "sell the news" event. The reservation numbers will come in later?

 

[chickensevil]

Thank you all for the kind words. I only hope my money is in a better place. I have no one to blame for my poor decisions but myself. My timing was terrible, I got caught up in the frenzy, I leveraged at the wrong time, held through the last couple days and based on pre market action, I panicked and sold at the wrong time. A perfect storm of bad decisions that taught me a significant six figure lesson. Hopefully, my next set of decisions will be better. I'm very happy the stock is rebounding for everyone else.

I wish I had a "sad face" like button that wouldn't be a dislike in a negative way, cause I feel for you. My two cents going forward is to take things a little slower as you seem to be really new to the options game. When I started I was playing with only 2k, this way it was such an insignificant number if it dissipated away into the ether I wouldn't care. As you build confidence in your trades you can leverage higher amounts and feel more comfortable with what you are doing.

You may not need to drop down to such a small number, but I would strongly recommend a number that is going to be less painful to lose as you learn these difficult but important lessons. Every trade you make, on some level you need to be willing to lose the entire value of that trade. If it is not a trade value that you are confident enough in that you would accept a total loss, then you should lower the amount to something more comfortable. For me, that was an account value of 2k with each trade being no more than 1k on the table (most were much smaller than that in the 100-300 range). I am way beyond that now, but it was a number I was willing to take to Vegas and put it all on black and roll the dice.

 

[MikeC]

I cannot think of a time when a product announcement did not cause a short or long term drop afterward.

The share price steadily increased for 3 months after the PowerWall/PowerPack reveal a year ago. Maybe theres no post-reveal drop for all-new products as opposed to upgrades (D event) or launches (Model X)?

 

[Renaud]

Seems like we started the day following Nasdaq, but then we continue upward when it loses a bit of ground.
Or maybe it is oil, only down 1% vs 3% early today.
Anyway, price action today is great, 200SMA would be a nice bonus.

(The Lincoln Navigator prototype makes me think of a cheap Chinese copy mixing Range Rover, Tesla MX and Toyota Land Cruiser...)

 

[hoang51]

My speculation might be as good as yours on this one.
Here are a few thoughts that went into my 25K Q2 comment.
...
A very linear projection the way you laid out was never guided by Musk or anyone at Tesla. That just doesn't look right to me based on everything I have observed so far.

The reason I gave an example of a 16K+25K+25K+25K=91K linear projection (I was referring to deliveries, my mistake on missing your production remark) is to illustrate that a projected 25K delivery in Q2 is not plausible. In the said Tesla Motor's shareholder letter of Q4FY15, it's stated that there will be about 80K-90K deliveries for FY16. Granted that you're referring to production and not deliveries, I find that there cannot be that much surplus between production and deliveries. For example, arbitrary numbers here, if Q1 delivers is guided to be about 16K and you're presuming of 25K production for Q2, that's a 9K difference between a quarter for it to be unreasonable showing of ramping up production. Extrapolating your ramp up calculations to Q3 and Q4 would result too large of a value that is greater than Tesla's estimates of delivery for the full 2016 year. Here's where I'm basing another portion of my information off of, http://files.shareholder.com/downlo...3C-4892824F058D/Q4_15_Tesla_Update_Letter.pdf on pg. 2:

During Q4, we reduced Model S production costs, started volume Model X production and still produced a record 14,037 new Tesla vehicles. In January 2016, we limited Model X production for a period of time to maintain our quality production standards. We are already seeing improvement from these efforts and we are now significantly increasing our Model X production throughout the balance of the quarter. We anticipate approaching a Model X production rate of 1,000 vehicles a week in Q2.
​

So going from about 14K produced in Q4Y15 as stated by Tesla to 25K produced in Q2Y16 estimated by you in a span of 3 months has a high probability of being unrealistic. That 9K production difference raises a red flag.

 

[chickensevil]

concerned that it would put my account in "DT Call" status (which I later read basically means they are displeased until you do it 4 more times), I popped that DT Call cherry today.

So my understanding of this, and someone else feel free to correct me if I am wrong. You can sell something, they give the funds to you, and then you can trade on those funds even though they haven't "cleared" yet and you are good here at this point. If you turn around and sell those unsettled funds one more time, then it counts as a "free ride" (or whatever term the SEC uses for it) and you get your account flagged. Options have a 1 day settling period (as opposed to 3 days for stocks) and so as long as you hold that last trade through till settlement, then you are fine. If you break this, and sell early, and do it apparently 5 times (and I think that 5 times is over like a 1 year period or some such), then you get flagged. (See my last paragraph on what they do when you do this... whoops!)

Unless, you are talking about actual "day trades", where you buy something and then sell it within the same day. From what I understand here, this typically only applies to margin accounts (so if you are a cash account then this doesn't matter and you can do whatever you want) and even at that, it only impacts you if your cash amount is lower than a certain amount set by the brokerage. This amount for OptionsHouse (my broker) is 25k. So as long as you are either a cash account, or a margin account with over 25k cash in it, then you can day trade all you want and there is no limit (as long as you don't break the SEC rules above on trading on unsettled funds). If you find yourself in this tiny window for impact by this (margin account with less than 25k account value), then you are generally limited to 5 trades a day/week/whatever as a "Day Trade". You will need to find out with your broker what this is. If you violate this, they flag your account and can either force you to deposit enough cash to bring your account up to 25k (or whatever limit they have imposed). Or they reserve the right to dump you back to a cash account and strip away your margin power. Note, I have conducted 1 such trade today, and as I am in a cash account, my "Day Trade" number still reflects 0. Because it doesn't apply to me.

So I am not sure which situation you found yourself in, but hopefully that clears up the two things a little bit. Note that I pissed my broker off because of trading on unsettled funds and now when I make a sale they won't release the cash to me to touch until it has settled. I could call and ask them to lift the status on me, but honestly with how volatile the options are I don't want to put myself accidentally in a situation where I need to dump something and can't because of the funds not being settled.

 

[Ulmo]

I think the push upwards for Model 3 will be dependent on reservation numbers. The actual reveal event I think has a high chance of being a "sell the news" event. The reservation numbers will come in later?

I might play with exactly that idea, going high risk, to do this:

1. Go in 100% of my cash price into TSLA right after the downturn after the announcement.
2. Wait for a month to make sure that it doesn't plummet, tanking my stock.
3. After confirmation that it won't just completely reset to 155 within a few weeks, use the margin in my brokerage account to withdraw cash at my expected federal income tax for 2016 (since I have a $232K capital gain and a little income with no deductions at all beyond standard deduction) -- about $81K, or 37% of my brokerage account.
4. Install solar panels costing $81K (including as much solar panels and storage as I can get), to cover my federal tax bill.
4. Stay long in TSLA, riding every single up and down, all the way out to February - March, 2017.
5. Try to work employment as much as possible, at a net income of around $1,200 per week that I do work -- I can usually pull in a gross of $50K-$70K a year, so a net of around $25K-$35K after taxes.
5. SELL ENOUGH TO PAY MY CALIFORNIA TAX BILL WHEN I'M UP OR EVEN. Hopefully when I'm up. I might sell right on April 5th to turn it into "long term capital gains" for a lower federal tax rate.
6. Pay my California tax for this year right then.

This is a way to get in trouble with two places at once, right? The California tax man AND the brokerage. It's super high risk. Will the brokerage even let me do this? I could always try to take out a loan on my solar panels if I have to cover a margin loss. The upside is that I could end the year with minimized taxes AND money to invest in my future. The downside is I could end up with less money than I started, if it loses more than about a third of its value. The solar ITC makes a big deal -- I could lose up to rough-off-the-top-of-my-head 20% and still come out ahead due to the ITC 30%, if I don't get jabbed filling in the blanks.

This would mean letting this play out for a WHOLE YEAR, during which time I could not cash out and buy property to build a home on. It would also mean squeezing relatives for space to put solar panels, a tall order since right now I'm being quoted a maximum of $30K-$50K for the biggest solar system that will fit on nearby relatives' homes. California gets lots of sun, but Oregon in the trees? Not so much ... I'll have to ask my brother a bit. Alternative is getting a cheap desert lot to put up my solar panels and just selling low cost electricity to PG&E, but actually, unless my family benefits from the energy directly, selling it at cost to PG&E is a losing game. But, I could have the panels WORKING for me at least, and then when I do buy property, physically reinstall them myself in the new property (hopefully not ticking off the ITC paperwork). That seems like a pretty safe bet from a lot of perspectives, since I would own the land, but it would require some seriously cheap desert land next to PG&E, and that's actually very very very hard to do.

So my question here is: do brokerage accounts let me draw down 40% cash out of a margin account and wire it to my bank? That would cause serious questions, and for good reason. The way I see it is I'm spending it on assets AND tax credits.

I'm being incentivized to create clean energy against my own will. Actually, it's with my agreement mostly, but the timing is tying my hands.

 

[Ulmo]

So my understanding of this,

ChickensEvil,

Thank you. Your description helps me a lot. It is incrementally more information than I had before right now, but it also helps confirm a lot of the stuff I've been learning (the hard way) over the last 3 to 9 days.

As it happens, I have $220K in a margin account at OptionsHouse myself, so your description is especially pertinent.

 

[SBenson]

Not sure if this was covered earlier.

BenzingaPro on Twitter

Tesla Tells Benzinga 'We Have Let Customers Know That Some Price Changes Will Take Effect In Early April' $TSLA, re: Model S

I'm getting more and more convinced that a Model S refresh will be part of Model 3 unveil event.

 

[Jonathan Hewitt]

So my understanding of this, and someone else feel free to correct me if I am wrong. You can sell something, they give the funds to you, and then you can trade on those funds even though they haven't "cleared" yet and you are good here at this point. If you turn around and sell those unsettled funds one more time, then it counts as a "free ride" (or whatever term the SEC uses for it) and you get your account flagged. Options have a 1 day settling period (as opposed to 3 days for stocks) and so as long as you hold that last trade through till settlement, then you are fine. If you break this, and sell early, and do it apparently 5 times (and I think that 5 times is over like a 1 year period or some such), then you get flagged. (See my last paragraph on what they do when you do this... whoops!)

I don't think this answers any questions but if you have margin account you can be flagged as a "pattern day trader." Either way, there's certain benefits and restrictions people might want to be aware of when you have "pattern day trader" status.

 

[Julian Cox]

I cannot think of a time when a product announcement did not cause a short or long term drop afterwards. The question is, is this time different? Several of us are on record saying that this has the makings of the exception.

1) Previous announcements (except the S) have been for the "optional" model X or just features for the cars (autopilot, dual). This is arguably the MAIN product of Elon's master plan, therefore everything hinges on it. If it is disappointing the stock will tank. If it is good to great a risk is removed. Those other announcements were good for consumers, but nothing really for shareholders.

2) This announcement comes with what amounts to a free capital raise. The Bears were salivating at cash problems 1-2 quarters ago. Well, each 100k reservations is $100M of free loan money, more or less. (Yes, TM can use the money however they want. There is no magic lockbox before someone brings that up).

3) This announcement comes with a ton of free publicity and public engagement. There are literally 100's of millions of people who are either interested in the model S/X but cannot afford them or deliberately ignore this "luxury" automaker because there is no point forming an opinion about a $100k vehicle. With a $35k car millions of new people will flip the switch that says "someday I want a Tesla". If 1% of them buy a share of stock...

Edit: 4) Also, Q1 deliveries come out right away, so there is less of a "news desert" after this.

5) Tin foil hat theory is that Elon plans to deliberately burn the shorts to raise the stock price to do a capital raise. Now is an attractive time to pull such a thing by deliberately bunching up some good news items. The other candidate time would be mid Aug for Q2 results.


It is a massive game of chicken. Very high short interest raises the stakes. If the stock pushes up on the next trading day there is a very high chance of new longs coming in, shorts panicking etc. But the opposite narrative is possible: If the stock trades lower new longs will bail and people might conclude it is in fact a sell-the-news event.

I am very long here.

Really brilliant comment.

I think the elephant in the room here is that people think they know what the news is and are assuming a sell on the news but on average I think people really don't know what the news is and that assumption is going to get punished. This isn't a case of hype about a known or well-guessed outcome - like AWD or the Model X - and as a matter of fact TSLA did go up on the Feb 2012 news of the 2012 Model X unveil and Model S reservations spiked to go with it - and the unveiling of the PowerWall and PowerPack seeded the main 2015 rally that peaked at $279.xx with another top at $282.xx The Tesla Energy announcement contained no shocking news that it was storage batteries - it contained shocking news about the elegance of the solution but most importantly the competitiveness of Tesla's pricing was unexpected.

Cars are such emotive things that have been subjected to $billions upon $billions of incessant public brainwashing - such that it is for example common knowledge and received wisdom that you can't have a car that looks like a Ferrari or a Maserati without paying Maserati or Ferrari prices for it - but there is no such inherent cost-penalty linked to pretty shapes to bend metal into unless you have to design a mid-sized car around an ugly lump of an engine block in the front assuming you still want seats in the back or when your main design objective is to stop the cheap models in your lineup appealing to wealthy buyers that would pay more if it wasn't so damned ugly. Look at the BMW i3 and the GM Bolt. Did they need to look like that? Yes they did - or else they would attack sales of better looking ICE vehicles instead of confining all possible interest to a tiny niche of hardened tree-huggers. Tesla does not have either of those problems - neither the engine block (and ugly radiator grills or exhaust ports) to work around in the design nor the desire to protect sales of more expensive ICE vehicles. Tesla actively wants to compete with ICE vehicle sales to the max and there is nothing and no incentive to stop them. Most likely the Model 3 is nominally $50K - $100K more beautiful than anything on the road at its price point because there is every advantage for Tesla in doing that and no downside - elegance and aerodynamics tend to go hand in hand and if you're going to bend metal anyway you might as well bend it pretty. That is just item number one on the list of unimaginable shock and awe.

Anyone that says that a $35K car can't look like a Maserati is only saying that because it has never happened before - i.e. the very definition of an expert trap. Seriously, auto industry experts will howl and declare that Tesla is inexperienced and stupid to threaten the cannibalization of its $100K cars with such a beautiful machine but in the eyes of the mainstream consumer - here is a $100K car for $35K. A total no-brainer compared to a $35K ICE machine while Tesla's $100K machines take on a whole new mantle of brand prestige by association for those that can afford it.

Next up, performance you can't buy for the money anywhere else. Unmatched running costs without settling for a tiny-engined econobox or a slow as a snail hybrid. Interior space, cabin technology, OTA network integration, autonomy options, safety and handling, no dealers, no emissions, no pay at the pump....

I have absolutely no idea how Toyota hopes to maintain customer loyalty to its Prius division (already 11% down in 2015) that and half of its Lexus division two weeks from now and Toyota and Lexus and all of the shorts that swear by them have absolutely no clue what is about to hit them. As for Toyota's hydrogen FCV push and shunning of EV technology, that I expect will hurt the entire Toyota brand and descend rapidly into a business-school textbook example of corporate mismanagement for the ages.

I would maintain that the way to play this is to buy any pre-annoucment dip and go long and strong through this particular event.

Disclaimer. This is my private opinion that is only as good as the reasons given for it and the reasons given are subject to error and omission unknown to me as well as omissions known to me and excluded for brevity any of which could prove material and render my opinion materially wrong. Not investment advice.

 

[austinEV]

Not sure if this was covered earlier.

BenzingaPro on Twitter

Tesla Tells Benzinga 'We Have Let Customers Know That Some Price Changes Will Take Effect In Early April' $TSLA, re: Model S

I'm getting more and more convinced that a Model S refresh will be part of Model 3 unveil event.

To me it is a given that a model S refresh will have to come at some point between march 31 and production of the model 3. There just won't be enough product differentiation between the expected 3 features and the existing S features. 100kWh, new front, hopefully interior improvements, etc. When they do announce it, they will have to be super ready to switch over since sales of the existing S' will take a big hit as people switch orders. It makes sense to do it at the start of a quarter too, so they have time to switch production without fouling deliveries too much.

I wonder of wk057 forced their hand...

 

[drinkerofkoolaid]

I firmly disagree. There was very little volume on Tuesday. Volume picked up today. I wouldn't be surprised if the stock opens down tomorrow and falls a bit further before seeing a massive revsrsal hammer around 11am. Two days does not make a trend! Also, a coordinated short attack is usually a sign the shorts are desperate. For what it's worth I was guessing the stock would re-trace to ~ $225 today. (See my posts from yesterday).

A sharp V cup and handle usually sees a sharp reversal at the prior top before picking a direction.

I don't usually pay myself on the back, but this was too perfectly timed. ^^"

 

[Yonki]

Selling at market.. big mistake /sigh I've gotta step my game up. Fingers crossed for better decision making next week. I dont think I'll reenter until then. Gotta get my head back in the game.

That sucks. You know this now, but it's best to practice with pretend options before you do them for real. I don't know if you already knew about the Newbie Options thread, but it's educational.

Though I agree that the best advice (particularly for TSLA) is to just buy and hold. I trade options occasionally but have made much more money with stock.

I always think of stocks as gambling where:
- the house doesn't have an advantage, and
- you usually get a second (or third, etc.) chance if you make a bad call.

Options are like moving back toward gambling. There are some things you can do to try to recover from a bad call, but often the clock runs out while the stocks moving in the wrong direction...

Better luck next time!

 

[chickensevil]

ChickensEvil,

Thank you. Your description helps me a lot. It is incrementally more information than I had before right now, but it also helps confirm a lot of the stuff I've been learning (the hard way) over the last 3 to 9 days.

As it happens, I have $220K in a margin account at OptionsHouse myself, so your description is especially pertinent.

Actually sorry, Take back what I said, There are limits and restrictions. I would watch this video and it should help you with managing this:

This still only applies to your margin buying power and never impacts your cash amounts. If you are buying and trading with cash then it wouldn't matter. If you keep day trading they limit how much margin you have to actually play with until it falls off the restricted status or you exceed the 90 day window. Again it looks like the issue still stems from you buying something, selling something, buying something again and then selling it... and those amounts exceeding your total margin amount in a single day.