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Wiki Tesla, TSLA & the Investment World: the Perpetual Investors' Roundtable

FrankSG

Active Member
Jun 27, 2019
1,615
21,504
Singapore
If the index funds don't want to expose the imbalance, they will simply not post buy orders for all the shares they need. They will batch them and only post the next buy order after the previous one has filled. It looks like you are thinking that the index funds MUST trade only at the end of the day on Friday. But trading between Fridays close and Mondays open doesn't guarantee them the inclusion price anymore than buying shares on Thursday or Monday. You still need a willing seller and that seller can go wherever they want to get the price they want. And I don't see how trading in a dark pool in the middle of the night gets them that as liquidity during those hours tends to be very low. The trades still need to be reported before Monday's open.

Market-on-Close (MOC) Orders - IBKR

MOC.jpg


Unless they are going to use limit orders, they have to place them by 15:55, and can not take them back after.
 

Lycanthrope

S3XY old dude
Supporting Member
Nov 15, 2013
9,881
76,878
At home
Meh, I'm positioned for the next three weeks, other than a 31 Dec $900 call I bought as a lottery ticket (before the IV crush, so in the red right now).

After dwelling on all the possibilities, I decided I didn't want the stress of waiting to the close tomorrow, then seeing what I could get out of it. Wouldn't surprise me at all that the closing cross will satisfy the demand - you can be sure there are many well-financed players in this game who are looking for profit from this event and they've had a long time to prepare for it. I suspect most retail will be left holding the baby.

So I'm guessing a flat day today and the SP dropping a little post-inclusion as retail speculators cash-out.

But like everyone else around here, I have no idea, I'm just bringing five years of watching this stock to bear - most of the time, the big sharks win this game.
 

chrsk

Member
Nov 22, 2019
240
916
Norway
Meh, I'm positioned for the next three weeks, other than a 31 Dec $900 call I bought as a lottery ticket (before the IV crush, so in the red right now).

After dwelling on all the possibilities, I decided I didn't want the stress of waiting to the close tomorrow, then seeing what I could get out of it. Wouldn't surprise me at all that the closing cross will satisfy the demand - you can be sure there are many well-financed players in this game who are looking for profit from this event and they've had a long time to prepare for it. I suspect most retail will be left holding the baby.

So I'm guessing a flat day today and the SP dropping a little post-inclusion as retail speculators cash-out.

But like everyone else around here, I have no idea, I'm just bringing five years of watching this stock to bear - most of the time, the big sharks win this game.

Until yesterday I would agree with you. After the price action when the volume came back yesterday I'm not that sure anymore. As soon as someone tried to buy a significant pot of shares the price increased.
 

StealthP3D

Well-Known Member
Dec 12, 2018
9,777
78,222
Maple Falls, WA
Market-on-Close (MOC) Orders - IBKR

View attachment 618762

Unless they are going to use limit orders, they have to place them by 15:55, and can not take them back after.

I understand that. But the idea was they would be trading in the middle of the night because they didn't want their orders reported until the next morning. That is unlikely to get them the closing price. So, if they are willing to do that, they should be willing to trade at other times too.

In other words, it's not the time proximity to the close that matters, it's how close the price is to the closing price. But, yeah, if they don't have shares by Friday's close they will probably be willing to buy them at night or early morning or whenever they can get them as long as there is liquidity to be had. But I really don't see how the fact that the trades don't need to be reported until the morning will help them because anyone participating in an alternative exchange will be able to see the orders and they will all get reported to everyone else before NASDAQ opens anyway.
 
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mrdoubleb

Supporting Member
Supporting Member
Jul 2, 2013
2,603
14,423
Budapest, Hungary
The main impression I get from Rich is that the market basically leaves these things up to other market participants, and is simply hoping that enough front-running has happened. I personally feel strongly that it hasn't, and I believe Fact Checking talked on Twitter about the fact that Hedge Funds only have so much money available for plays like this. This inclusion is truly of unprecedented size. I wonder if front runners that wanted to play the TSLA inclusion put all the money they wanted to dedicate to this play into TSLA in the first 2-3 weeks after inclusion, and whether the pool of HF money might just simply not be enough to provide adequate liquidity for an inclusion of TSLA's size.

Based on my prediction model, I really think that at this level a lot of large TSLA shareholders have to be willing to dump a Cybertruck-load of shares in order to satisfy demand from indexers. I continue to believe there's more likely than not significant upside from $650. If not this week, then during the next week or two. I could be wrong, but we'll find out very soon.
What I find awfully interesting is that this is all happening just 2 weeks from Q4 deliveries report. With a couple of trading days already falling out due the Xmas.

Now I know, with this SP level almost everything is priced in and also this whole thing pales in comparison to the price pressure of 15-30% of the Tesla float headed to different funds (as per Rob's thesys).

However this is not just any old deliveries report. This is Q4, which is also full year 2020, in a year when every other automaker will have double digit losses while Tesla grows ~30% and the company is bound to hit the psychological threshold of half a million cars.

(I will need to sell some shares as I plan to upgrade our household from zero to 2 EVs in Q1 but I really wouldn't want to sell until January so I can postpone paying taxes to '22. So I am watching eagerly and really hope this rally extends into early January with S&P inclusion running into Q4 sales numbers.)
 

hobbes

Active Member
Feb 11, 2013
2,712
14,645
Germany
https://www.etf.com/sections/features-and-news/sp-500-etfs-brace-tesla-trade?nopaging=1

S&P 500 ETFs Brace For Tesla Trade
ETF.com Dec. 9 interview with Rich Lee, with whom Rob Mauer vlogged tonight. Many of the same questions and replies.

"But to your point, why wouldn't Tesla stock just run another, say, 25-50% given that everybody has to buy it? That's where having a robust and dynamic market comes into play, because there are market participants, whether it be proprietary traders, hedge funds or prop shops whose job is to look for these announced index changes and trade them ahead of time, and hopefully accumulate a position in advance of the index and be suppliers of liquidity.

The sell side is a liquidity partner in this endeavor. If we look at an index fund that cannot deviate, and it cannot trade early, if you don't have the sell side there prepositioning or accumulating position, you may have that scenario where the stock just runs uncontrollably to the upside. You want a robust ecosystem."

Most helpful, thanks for posting!
 
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mongo

Well-Known Member
May 3, 2017
13,326
40,782
Michigan
@Artful Dodger , @TheTalkingMule was trying to draw your attention to a $10 or 1.5% typo. It has nothing to do with EDGAR since your spreadsheet has the correct data. Stock price was never $66x.xx yesterday.
Screenshot_20201218-060722_Firefox.jpg


Close: $665.90 / VWAP: 102.11%

Close was $655.90, no?

EDGAR data source doesn't retroactively update their downloadable 'per-minute' data. There's also usually a few thousand share discrepancy between their total shares traded number and the final number reported in NASDAQ History.

It all averages out though, it's the trend we're trying to capture. And that trend is UP! :D

Cheers!
 

Johan

Ex got M3 in the divorce, waiting for EU Model Y!
Feb 9, 2012
7,496
9,788
Drammen, Norway
So today is when the 100 million sellers show up right? To sell their shares at the same price they were yesterday? Or is there something I'm not understanding here?

Very early pre-market action (practically zero volume) would suggest that currently there are more willing buyers than willing sellers...
 
Last edited:

vikings123

Supporting Member
Supporting Member
May 27, 2019
1,131
8,497
MN
So today is when the 100 million sellers show up right? To sell their shares at the same price they were yesterday? Or is there something I'm not understanding here?

Very early pre-market action (practically zero volume) would suggest that currently there are more willing buyers than willing sellers...

Yep the markets are efficient. At around 4 PM today we will for sure get matching shares from buyers and sellers for 120 million shares. It’s clear to me. It should be a straight forward transaction, nothing to see here.

/s
 

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