This is indeed a once-in-a-lifetime event. So that's what I did this morning (but only in roth ira). Although I've always wondered, "if everyone's thinking the same thing, then who's left holding the bag?"
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Tesla, TSLA & the Investment World: the Perpetual Investors' Roundtable
- Thread starter AudubonB
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This is indeed a once-in-a-lifetime event. So that's what I did this morning (but only in roth ira). Although I've always wondered, "if everyone's thinking the same thing, then who's left holding the bag?"
Model S M.D.
Ludicrous Radiologist
100% true. I’ve been investing since 2015, when the stock basically did nothing for 5 years yet I still believed strongly in the company and poured more money in. I have Dave Lee’s holy grail of investing: high income and high risk tolerance, . Cheers everyone, haven’t been on TMC in years, what a fantastic ride so far. HODL-ing until 2030!!
If I'm reading the options price quote correctly, I believe you are both off. The quote for a 12/24 c600 is not 100 and not 1 either, but closer to $10 (actually $14+). Which means the OP would receive a premium of about $1,400, not $10,000, but also not just $100. So if the shares got called away, the OP would receive a net of ~$61,400.
To follow up, I wouldn't agree the OP's play is a bearish position. If the OP has a bunch of shares, selling one option for some income on OTM calls is a way of generating some income, with the worst case scenario being that 100 shares get called away at a price much higher than currently trading. And think of what that means to the rest of his holdings. I've used this strategy to generate good income back when the IV was high before battery day. Staggered covered calls where I would have been thrilled to have one option get exercised on me as that would have meant my Tesla portfolio had to have greatly increased.
Having said that, I would not write covered calls today for all the reasons already discussed here. Too much 'risk' of a squeeze and FOMO that drives up the price in the short term. But if the SP increases to $600 prior to 12/21 and the IV increases, I will definitely consider writing CCs for some 'free, very low risk' income.
Having said that, I would not write covered calls today for all the reasons already discussed here. Too much 'risk' of a squeeze and FOMO that drives up the price in the short term. But if the SP increases to $600 prior to 12/21 and the IV increases, I will definitely consider writing CCs for some 'free, very low risk' income.
Hiro Mizuno just thanked @DaveT on Twitter!
Good to see TMC members being followed by Tesla highest circle...
Also Dave has done an amazing job with his channel on Youtube, so kudos to him.
Good to see TMC members being followed by Tesla highest circle...
Also Dave has done an amazing job with his channel on Youtube, so kudos to him.
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Yep, cool, that's your level of comfort. I'm more conservative in that way which is what I noted. Nothing wrong with either approach! Just note that a stop loss is no guarantee that you are going to get out in time. Stock can open 70% down next day, yes the probability is not high but it is there.
Deep in the money LEAPS aren't really complicated at all, they're just leverage with delta of almost 1 (that means option price moves almost 1:1 with the underlying stock) and the time premium should be somewhat in line with interest rates on margin.
Didn't know what the price was (assumed it was $1 from mis-reading op's post), but doesn't change the fact that the trade caps the upside.
So going by your reading, I guess the op had put in a limit order to sell those 600c options at $100/shr. Based on the fact that Dec 24th 390 calls are ~$100/shr, TSLA would be about $605 when those calls reach that $100/shr price. So yeah, it's a bearish position.
I'm not saying the op's a bear. Just pointing out that the trade might not be op's intent (in this exceptional time period).
481 US in Germany and Bon Soir mon ami @Lycanthrope ... keep 'em in shape until the morning shift!
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Runarbt
Active Member
I'd say - go DITM instead. You never know what happens with market.
I sold shares and bought $200 sept21 calls. Increased my exposure 50%. Little to no time-value, and barely no risk imho.
This is my fav bunch of kids so far. I have been cold-heartedly culling them, sold some when we hit post-split almost 500 last time we got there, and sold 1 yesterday. Will hold out to see what happens with S&P scenario, but expiration is getting close so might be wise to just ring the register.
Kinda crazy to think that before split this would be about $200K for just one contract... that was worth under $5K more than a year ago.
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If option premiums are super high and you think that the stock will/might move up but not THAT far up.. is this bearish? Yes and no, the stock can go up a lot from here before that call is in the money on that strike. You can just as well call it a "limited bullish" position and be more correct, they're not selling the underlying! (that happens to makes money even if the "limited bullish" expectation doesn't work out). Bearish position would be to just sell the underlying immediately since you expect the stock to go down.
FWIW, I am positioned for taking advantage of extreme shenanigans if they happen but I didn't put much money into that because it is via those far out of the money calls, but otherwise I'm laying low. Nobody knows what is going to happen, personally I think one of the viable scenarios is that there are enough agents in the market that are acting now to effectively balance/smooth out the situation by arbitraging the transition in various ways. On the other hand funds that will have to buy in are totally a sitting duck so maybe there are market forces that will effectively conspire to take advantage of those funds... which also means that if there's a big pop, it will be temporary. So for myself I simply have decided how much am I prepared to sell at what price levels plus a bit of a gamble with fairly short term calls. As this thing unfolds I know exactly what to do, which very well might end up being "nothing".
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Pezpunk
Active Member
Lotta people getting extra greedy instead of simply taking what the stock is giving them. Acting more like drunk gamblers than investors. :/
I started to invest in 2015 and it's been frankly really easy for me to stay long, just I added over time.
The intrinsic value increased every quarter so it was clear that I made money although it was not yet visible in the SP. That happened later.
Frankly said if you assess and evaluate the right metric for me at least TSLA has been the easiest stock to analyze and conclude
What we experience right now is moe a technical rally due to S&P inclusion and not a fundamental one.
I still enjoy the show very much
Peeps, and specifically @FrankSG - since the Berkshire / TSLA hypothesis came from you. (and good work on that!), I was wondering if you've spent time on the implication which has been irritating me since this came up?
- assume Berkshire really did buy 25MM TSLA shares and then managed to hide it
Did Buffet, because of who he is etc, influence the S&P committee to delay their inclusion note (once it became clear that TSLA met the requirements for inclusion) until he was done with his accumulation to make sure he gets in for a Buffet-style good price?
And if he did, did the S&P committee give him a heads up on their note on the TSLA inclusion before publication.
Maybe I just don't understand the true benefit to Berkshire of hiding their entry into TSLA coupled with the delay and strange timing of the S&P note. Too much coincidence for my taste.
- assume Berkshire really did buy 25MM TSLA shares and then managed to hide it
Did Buffet, because of who he is etc, influence the S&P committee to delay their inclusion note (once it became clear that TSLA met the requirements for inclusion) until he was done with his accumulation to make sure he gets in for a Buffet-style good price?
And if he did, did the S&P committee give him a heads up on their note on the TSLA inclusion before publication.
Maybe I just don't understand the true benefit to Berkshire of hiding their entry into TSLA coupled with the delay and strange timing of the S&P note. Too much coincidence for my taste.
I doubt those are related. That'd be some serious conspiracy stuff.
I think it'd mostly just be Buffet's name. He's supposed to be this legendary investor that many look up to. It'd just be some good publicity for TSLA, and another huge vote of confidence by somebody big in the investing world. It'd help further change the overall market's perspective on Tesla. There are still loads of people who think TSLA is overvalued, and Buffet's Berkshire investing could make them re-evaluate their opinion.
I personally don't think it'd have massive implications for the stock or anything, and I don't have any vested interest in it being true besides it being cool that I was the one to first speak of the possibility. I'm mostly just curious whom bought all the shares that were sold by institutional investors during Q3. If it's not Berkshire Hathaway, my guess is that it's likely that some company bought a large, but not 5%+, stake in Tesla, similar to Tencent a couple of years ago. Companies like Tencent don't have to file 13Fs, because they are not investment managers. We only found out about Tencent's investment because it surpassed 5%, and had to be declared by 13G/D.
Although other evidence for the naked short theory is weak imo, the sale of most of these shares likely happened between the split announcement and the split. Given this very specific timing, I wonder if perhaps, instead of a large entity acquiring a new long position, the shares were bought by naked shorts to cover positions.
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StealthP3D
Well-Known Member
Well, it's more bearish than the person paying you cold hard cash for them!
There are two sides to every trade. That's why it's called a trade. So, yeah, that's the bearish side of the trade. And it just so happens you are making the trade with someone who is super bullish!
The discussion on selling covered calls being bearish, well I'm looking to sell calls as I need some money. I'd rather sell calls where the premiums cover my needs at a strike I don't mind selling, as opposed to selling core shares at a lower price.
Makes sense, no?
Makes sense, no?
I recommend this documentary:
I think a lot of what happened when photography went from film to digital will be very similar to when automotive goes from fossil fuel to electric. The writing was on the wall for Kodak just as much as it is on the wall for GM(who made the original EV) and the rest, but all their products into the new market have been flops. Just like Kodak.
I think a lot of what happened when photography went from film to digital will be very similar to when automotive goes from fossil fuel to electric. The writing was on the wall for Kodak just as much as it is on the wall for GM(who made the original EV) and the rest, but all their products into the new market have been flops. Just like Kodak.
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