aznt1217
Active Member
Amen.
haha true story! I thought about all your comments when you'd tell me to sell half. I'm only two weeks away from long term designation so I shall wait haha.
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Amen.
... and they are shorting in big size too. 240,000 shares worth today, 240,000 shares worth on 3/19, and a few other blocks too. i guess the short really doesn't believe there's an eps, revenue, and gross margin beat just around the corner.
TSLA | bid / ask | 40.99 | 41.05 |
20130517_45_C | bid / ask | 0.8 | 0.9 |
20130517_45_P | bid / ask | 6.8 | 7.1 |
Anyone looking at Synthetic Longs right now?
For instance, with a Jan, 2014 expiration, one could:...
<snip>
....this seems like an easy bet. Thoughts?
Anyone looking at Synthetic Longs right now?
For instance, with a Jan, 2014 expiration, one could:
- Sell the $35 Put for about $5.60
- Buy the $40 Call for about $4.50
If Tesla is above $38.90 on Jan 18, 2014, you make penny for penny above $38.90.
If Tesla is below $38.90 but above $35 on Jan 18, 2014, you make $1.10.
If Tesla is below $35 but above $33.90 on Jan 18, 2014, you make penny for penny above $33.90.
If Tesla is below $33.90, you're buying TSLA at $33.90.
With Tesla over $40 now, this seems like an easy bet. Thoughts?
Luvb2b - didn't we just see a large downward at the last Friday exercise date?
the bad thing I can see is that you sold a $35 put, and it can be exercised at any time, like when the stock temporarily drops to $20...
I completely understand keeping things simply by doing a Syn Long at a single strike. Rather than put extra dollars in my pocket today, I split them with the lower Put strike to give me some additional downside protection rather than pocket more cash now.
You can split the strikes the other way, though. For instance:
Jan $40 Put for $8.60
Jan $35 Call for $7.40
Still pays you $1.20 per, and there's an interesting confluence if the end price is between $35 and $40 where both Put and Call are active. My way is simpler, but I think there are advantages to this split method.
When selling an option to another party, you're always trading them flexibility for their cash. As such, in the decision-making process on your end must be some answered questions like "Am I comfortable buying the stock at $33.90 at any time prior to the expiration of this put?" If you can't answer "Yes" to that question, then step away from the proposed strategy and find another. If you can answer "Yes", then you move forward.Anyway, the bad thing I can see is that you sold a $35 put, and it can be exercised at any time [until the expiration of the put], like when the stock temporarily drops to $20 due to some market scare or something? So "end up buying at $33.90" doesn't sound so great, and you can't control when it might happen.
Am I missing something?
Buy Sep 46 calls
Sell September 30 puts
Even (with stock at $40.90)
The idea is to take advantage of the ginormous skew in Tesla Motors Inc. The puts currently trade at a significantly higher volatility than the calls.
This sort of combo is called a risk-reversal.... If the stock rallies, you effectively have long gamma as your calls are in play. So you can short stock into it and attempt to earn a "dividend" on your position via flipping. If the stock goes lower … well, remember you were bullish to begin with. If you do nothing, you've effectively gotten long at the strike price of the puts.
@smorgasbord
I think this has merit, and I would be trying this out if I had access to US options (Norwegian brokers don't offer this at present, and I have not so far had the interest to open a US brokerage account).