Social Chat - Short Term TSLA Movements

[mershaw2001]

Completely disagree brian. If you want to sell an at the money put for the next 14 months as tesla goes up, you have to walk the strike price of those puts up. The difference is that you have to make 1 correct call now with the LEAP put, or you have to make 14 correct calls and not have a crash during that time. Let's say the price rises 10 dollars each month for the next 7 months, like it did this year from about april to december. You sell the 160, then you sell the 170, then you sell the 180 etc until you're at the 230 on month seven. Then on month 8 it is down 40 dollars, just like tesla did now. Because you sold the 230 put for only 3 dollars, and you just lost 40 dollars that month, you've lost all the money you've made plus more.
Each situation has its perks, neither is truly better.

 

[brianman]

Completely disagree brian.
Each situation has its perks, neither is truly better.

Your first sentence and your last sentence disagree. I agree with your last sentence.

I wasn't suggesting there wasn't merit in the long PUTs. My point was that they can often be beat, and the flexibility can sometimes open up dramatic opportunities. But yes, if you see the current price as a local low that you think might represent a long-term low then locking in the long PUT can be simple and easy -- kind of like locking in a fixed interest rate on your mortgage.

 

[mershaw2001]

Your first sentence and your last sentence disagree. I agree with your last sentence.

I wasn't suggesting there wasn't merit in the long PUTs. My point was that they can often be beat, and the flexibility can sometimes open up dramatic opportunities. But yes, if you see the current price as a local low that you think might represent a long-term low then locking in the long PUT can be simple and easy -- kind of like locking in a fixed interest rate on your mortgage.

Touche, man, touche. I did shoot myself in the foot with that opening sentence.

 

[InTheShadows]

Ugh, my nov 1 160 order for .80 didn't get filled at open. I should have known better and placed it at .85. Oh well, next time.

 

[Renaud]

Ugh, my nov 1 160 order for .80 didn't get filled at open. I should have known better and placed it at .85. Oh well, next time.

I thought as well that the dip at the opening was a possible good deal, and same story: order not executed.
But consedering the intraday swings, who knows what numbers we will see again today...

And I bought it, just a few of them at 1.1. Not the cheapest I could have had them, but OK, at least I see some green today!!!

 

[uselesslogin]

So (1) if you don't think that TSLA will be below $160 on any monthly expiration day between now Jan 2015 and (2) you think you can sell a monthly put for at least $3.08 sometime each month... then you're better off selling 14 separate puts instead of the single long put.

Yeah, the reason I'm not selling puts at a shorter term is because I am in an IRA and can't use margin which changes the way you look at selling options. Mostly I want the higher premium to reduce the amount of cash I need to secure it. I have a core equity position but didn't want to buy calls because of the premium and felt that I wanted a little bit less risk than buying more shares directly. On margin I might be selling multiple puts into the earnings call but until I am maxing out all the contributions to my tax-free accounts I won't be getting into that type of thing.

 

[ZenMan]

Just when you think the tide is turning, the selling into strength resumes....

 

[aznt1217]

Just when you think the tide is turning, the selling into strength resumes....

It's earnings time and Tesla has been always prone to volatility. I call what we are a "crossover period" where significant events occur that test execution. The last time Tesla was down for the month was in Feb and Dec. It's not coincidence that significant events occurred in the months that were before earnings and right when Tesla was communicating a lot more.

We're down because people want to see execution on a global scale. They want to see if Tesla can take the "heat" and have what it takes. There's pressure and arguments made that Tesla will fail on both the demand side, and if there is demand they won't be able to fulfill it. I seriously hope Musk and co. proves the market wrong again. Not even fully for monetary purposes (but that would be sweet), but just to prove the naysayers wrong out of pride.

 

[MikeC]

What's this NASDAQ options outage about?

Nice to see TSLA picking up a little at the end here.

 

[Cameron]

I must say, I am getting increasingly confident about this Tuesday. The short percentage must be close to where it was before Q1. The stock is the "weakest" it's been since the beginning of this year and I think shorts are trying to take full advantage of that. I don't see how earnings could be bad though. The #s will either be good or great, I can't see demand not being huge, supply constraints should be almost fixed, model x details should be coming , etc. My gut is telling me this is going to be epic.

 

[austinEV]

I must say, I am getting increasingly confident about this Tuesday. The short percentage must be close to where it was before Q1. The stock is the "weakest" it's been since the beginning of this year and I think shorts are trying to take full advantage of that. I don't see how earnings could be bad though. The #s will either be good or great, I can't see demand not being huge, supply constraints should be almost fixed, model x details should be coming , etc. My gut is telling me this is going to be epic.

+1. I now officially think a "meh" Q3 is priced in.

 

[gsxcorey]

I must say, I am getting increasingly confident about this Tuesday. The short percentage must be close to where it was before Q1. The stock is the "weakest" it's been since the beginning of this year and I think shorts are trying to take full advantage of that. I don't see how earnings could be bad though. The #s will either be good or great, I can't see demand not being huge, supply constraints should be almost fixed, model x details should be coming , etc. My gut is telling me this is going to be epic.

I'm starting to feel more confident as well. I sold 45 puts for 145 nov and was nervous the last few weeks, but I'm starting to feel more confident as well. If earnings creates a little pop I think the shorts may turn it into a large pop. At least that is what I'm hoping for. I have a lot riding on these options and really hope earnings goes smoothly. Also that nobody says anything stupid like the Apple guy did or Musk say ANYTHING about over valued, etc. It's time for them to watch what they say, give great guidance, and regain some of the losses.

 

[justdoit]

I must say, I am getting increasingly confident about this Tuesday. The short percentage must be close to where it was before Q1. The stock is the "weakest" it's been since the beginning of this year and I think shorts are trying to take full advantage of that. I don't see how earnings could be bad though. The #s will either be good or great, I can't see demand not being huge, supply constraints should be almost fixed, model x details should be coming , etc. My gut is telling me this is going to be epic.

It's definitely going to be epic. Question is will it be a good epic or bad epic What my biggest concern is that Tesla will be conservative about future guidance and that will hurt us. All these companies are now taking the apple approach of low ball then blowout your own expectations and the market is starting to catch on. I really hope Musk doesn't get too conservative. This is the time to show what they're made of. If they have a good quarter but get conservative then that can really hurt and cause things to plummet. I'm sure that's not what they want so I hope they take that into consideration.

In regards to shorts covering, I actually think if there is an initial small pop, most shorts won't cover b/c they'll wait for a fade (this has happened a lot recently) and if the fade doesn't happen then there will be another pop as shorts cover and then a few days later as they get margin calls. This would be best case scenario in my opinion. That we start making a consistent and strong move upwards.

 

[c041v]

In regards to shorts covering, I actually think if there is an initial small pop, most shorts won't cover b/c they'll wait for a fade (this has happened a lot recently) and if the fade doesn't happen then there will be another pop as shorts cover and then a few days later as they get margin calls. This would be best case scenario in my opinion. That we start making a consistent and strong move upwards.

Let's hope all that popping is done <Nov 16th. I've debating getting into more calls over the past few days, but I think I just need to ride into this ER with what I've got and thank my lucky stars if we see the good sort of epic.

 

[Mario Kadastik]

Well my original plays were somewhat hinging on hedges in the middle and on earnings day. I've somewhat alleviated with averaging down and moving to lower strikes when price differences have gotten smaller so I now mostly sit on Nov 170 and Dec 175s, but I'm currenlty 70% invested in Tsla options at various expirations that have taken a 40% loss so far. Solar is the rest and that has balanced out some and kept me overall ca 25% down.

my big dilemma is now on my total risk exposure and I don't see a good way to reduce risk without taking heavy losses and making break even even harder. I will probably still hedge the November ones with $185 strikes no matter what their price just to reduce risk and to still be able to make it into the green and hope for profit on the Dec, Mar, Jan options...

 

[Larken]

Have you guys seen this 22 minute interview from Germany? He talks about a lot of interesting things including weekly production numbers. He even mentioned that the orderflow increased after the fire incident. This is awesome, haven't heard that before.

http://www.zdf.de/ZDFmediathek/beitrag/video/2015574/Tesla-Chef-Elon-Musk-im-Interview

 

[justdoit]

Have you guys seen this 22 minute interview from Germany? He talks about a lot of interesting things including weekly production numbers. He even mentioned that the orderflow increased after the fire incident. This is awesome, haven't heard that before.

http://www.zdf.de/ZDFmediathek/beitrag/video/2015574/Tesla-Chef-Elon-Musk-im-Interview

It really got me worried when he says that they're not likely to get acquired at their current stock price and laughed. Seems like he really thinks the stock price is over valued and a joke and doesn't mind things staying at this level for a while. Or that he doesn't want it to go up much more too fast b/c it's probably not too health for the company? Not sure. He also seemed very reserved and played things down a lot.

 

[anticitizen13.7]

It really got me worried when he says that they're not likely to get acquired at their current stock price and laughed. Seems like he really thinks the stock price is over valued and a joke and doesn't mind things staying at this level for a while. Or that he doesn't want it to go up much more too fast b/c it's probably not too health for the company? Not sure. He also seemed very reserved and played things down a lot.

Personally I would prefer it if Tesla's leadership team, including Elon, not comment on the stock price, because the press just misuses these statements in order to make click-bait headlines.

My response to any question on the stock price would be, "I don't know. It's up to the market to decide what our company is worth."

 

[kenliles]

Personally I would prefer it if Tesla's leadership team, including Elon, not comment on the stock price, because the press just misuses these statements in order to make click-bait headlines.

My response to any question on the stock price would be, "I don't know. It's up to the market to decide what our company is worth."

The press is going to do their thing anyway. I encourage Elon to stay Elon

 

[hershey101]

Has the street already taken into account the positive cash flow statement?