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I finally figured out why your charts bug me. You always show the percentages relative to the opening price of TSLA, but this completely ignores any gap up or down overnight... which was about 5% last night.
Reuters - this morning: Ford’s new CEO tackles warranty costs in bid to boost profit
What is barely mentioned is that the long established automakers must pay their franchised dealerships to make warranty repairs. I once had my car recalled to have an 80-cent part replaced in two minutes. I asked the service writer how much the dealership would charge General Motors. He answered, "About $200."
Tesla circumvents this by owning its sales and service centers. And unlike its competitors, it makes many of its own parts.
I wasn't saying not to "lever up" with options - I was trying to point out the fallacy of using the excuse that it's one of the only ways to "generate cash". That is a mental mind twist that has no place in investing.
Let's hope the momentum keeps going but we know from history the Frankfurt market has little or no effect on what happens here later in the morning. High-volume pre-market trading starts at (I think) -90 mins. This is when we first get our first real clue of what the open might be like.Well, it's already over $570 US in Germany, that's kinda what I'm basing it on. Definitely didn't expect it so soon, but in this universe anything can happen... and probably will.
By holding a non-dividend bearing stock long-term, there is NO opportunity to realize cash in the short-term. You would have to sell some.
There is always a time and a place for withdrawing cash from your investment portfolio. But you are fooling yourself if you think it's somehow better to take profits from options trades than from other investments. It's all just cash gains (although tax considerations could play into it).
Let me ask you this: When you hold options that expire worthless do you immediately calculate the loss and make a cash deposit to reimburse your brokerage account? The real question here is not by which method the gains were made but whether you really want to withdraw money from your investment account. Don't get me wrong, I've been withdrawing all the money we live on plus large purchases and real estate acquisitions for over 25 years without ever adding to it (and yet it continues to grow) but it doesn't matter whether the withdrawals come from interest, options trades or stock. It's just cash. The net effect, and the largest consideration, is it reduces our investible capital and the compound returns we get with that capital.
Before you say, "wait a minute, I'm talking about making income by writing covered calls", I'll point out that you are still risking the growth of your capital. There is a cost to everything, nothing is "free" in this world. And if you don't need that cash, then you don't need to risk the growth of your capital. It's easier to spend less than it is to fool yourself that you have devised a way to cash that doesn't risk your overall returns.
Thanks! Saved me the trouble of looking. I just bumped my limit order on a few shares to sell to $650. I didn't think it would run up this much this fast. I'll keep a close watch and adjust again should it get there fast.Tesla trading at the equivalent of $572.56 early in the session at Berlin (TLO)
If you disagree with that then you probably don't understand how it works.
I thought the peak will be before the last day of index buying. I am expecting the FOMO on the sell side, those who bought to sell at a profit, perhaps some long term holders who want to take "some" cash out.
Mind sharing your thoughts on why peak likely won't be well before last day?
I think the buying pressure will significantly outpace any selling from retail and other big funds. Just based on the volumes we are seeing I think the supply is just not there to fully satisfy the 125 million shares that need to be bought by index funds and addition shares needed by benchmark funds.
I just don’t see us going to the 400 level even after the inclusion. This is not a VW type of squeeze. If anything the 15-20% of float(more actually) that will now be bought by index/benchmark funds which should decrease supply. I can see the shorts completely ignoring this dynamic and dig another hole but regardless I do think we establish a new base, maybe 600 or 700 but not lower than that.
I’m going to wait until the very last day of index buying to sell any covered calls and that too only if IV > 100.
Something I've wondered, don't the S&P500 Indexers lend out shares to shorts? I could see it as a way to get income when fees must be kept low to be competitive. Genuinely don't know, and I'd prefer if indexed shares are locked away.
I'm going to start posting periodic "keep it rational people" comments before we get too crazy.
It's super likely that further appreciation is coming, but that doesn't mean traders and MM's won't let the SP run up a bit then sell calls and short the stock before inclusion. These people don't care about Tesla as much as we think, most of them don't care at all. They simply want to make money.
This ultra-transparent opportunity based on what amounts to mandatory buying in a very well defined window is open for ALL MARKET PARTICIPANTS to leverage. These guys will take those 32 days to maximize their profits in whatever manner works. Logically that means there will be some pretty big swings both up and down.
None of us should be surprised to be sitting right at $520(or lower) on December 16th when the theoretical buying window opens. No one is selling.....but who exactly is going to be buying at $570 next week? We could be ripe yet again for manipulation with the goal of taking weekly call buyer's premiums. My guess is more like $650 on Dec 16th, but you get the point.
This might actually work. I found a free GIF app to put together the last four IO charts.
Looks like Puts are more numerous than Calls at the $500 strike as of close yesterday. There are not many Puts selling above that tho which is odd? All we get is a few $520s? Definitely seems like a push down is coming. We shall see tomorrow. Maybe with the jump today THEY are going to throw in the towel. Looks like $550 was going to be a line in the sand. THEY might not get their way this week.
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Well, an impressive pre-market walk down to start proceedings - was $575 in Frankfurt earlier...
I still don't get why THEY wouldn't just delta-hedge every call bought from this moment. Hell, the two big players, Citadel and the other one I can remember, have gazillions of shares already. Let it side, guys!