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

[Artful Dodger]

They report to overlords that want the S&P to go up and enrich their clients. And much as they hate it, TSLA is now part of that enrichment.

Sure, there are still the shorts . . . but they are looking more and more isolated every day.

Nothing has changed. TSLA was down 2.875x verses the NASDAQ-100 during the slide from 14:15 until 14:50.

That 2.875x is more than TSLA's beta from the deepest depths of the March dive.

Algo's and hedgies are still treating opportunities to short Tesla exactly the same.

 

[ggr]

I've been wondering why the volume is so low. But just now I realized that 20 (trading) days ago the stock price was about $630, today (AH) it is $760, which is a 20% difference, so the volume expressed in dollars is higher now than then. Not very profound, but hey... it took me a while.

 

[TheTalkingMule]

I can't really pretend to understand the market and how it's responding to current events, but...

The TSLA I know and love should end the week at $749, given the gigantic pile of $750 calls that's been mentioned here. Do "they" still have the power to make it close at a convenient number like that? Or is it a Brave New World post-inclusion where that kind of end-of-week drop and Monday jump doesn't happen any more?

Fair enough chance of $749.98 depending on how the next two days go. I could see fairly low volume market-wide and we all know what MM's can do in that environment. I guess we'll see just how stable this new more limited float makes TSLA.

 

[EVortex]

My 0.02, but I wonder if we have entered a new dynamic in regards to TSLA share price. The people that were previously vested to suppress the stock no longer (mostly) have that desire. They report to overlords that want the S&P to go up and enrich their clients. And much as they hate it, TSLA is now part of that enrichment.

Sure, there are still the shorts . . . but they are looking more and more isolated every day.

I have been wondering the same thing. Never saw it coming, but seems to fit.

 

[adiggs]

Fair enough chance of $749.98 depending on how the next two days go. I could see fairly low volume market-wide and we all know what MM's can do in that environment. I guess we'll see just how stable this new more limited float makes TSLA.

It's this more limited float that is the wild card in my mind. One interpretation I have for the last couple of weeks is that the inclusion event got the index funds the shares that they needed, but left a supply / demand imbalance in the market. Specifically a big cut in the supply of shares.

So my current interpretation is that the market is seeking out that new share price that brings the supply and demand for shares back into balance. When this inclusion thing started, I had thought we'd drop back down and settle into the 500s or 600s (up from the 400s starting point, but down from the inclusion peak).

Now, I'm not so sure. Heck - I'm sure that I don't know. If supply is still too limited, then the price will need to keep going up to find more sellers and make more supply available. Is that $750? Is that $900? I dunno.

 

[MP3Mike]

Now, I'm not so sure. Heck - I'm sure that I don't know. If supply is still too limited, then the price will need to keep going up to find more sellers and make more supply available. Is that $750? Is that $900? I dunno.

And as that happens S&P500 benchmarked funds may buy more TSLA making the float/supply more limited; forcing the price up even more to keep ample supply available. It may be a while before we know what the "steady" price is. (And if it is up or down from here. But at this point I suspect that it is still up from here.)

 

[Curt Renz]

For the third consecutive day, ARK did not shave any of its large TSLA holdings despite another all-time closing high.

 

[jw934]

Fair enough chance of $749.98 depending on how the next two days go. I could see fairly low volume market-wide and we all know what MM's can do in that environment. I guess we'll see just how stable this new more limited float makes TSLA.

Don't forget the close last week (12/31) was at $705.69 to exercise the $700 and the $705 calls for cheap (relative to current price). If they follow the same strategy the close this Friday should be just over $755 to exercise both the 25,842 open $750 calls as well as the 2,788 open $755 call contracts before the share price zooms higher next week.

 

[adiggs]

Don't forget the close last week (12/31) was at $705.69 to exercise the $700 and the $705 calls for cheap (relative to current price). If they follow the same strategy the close this Friday should be just over $755 to exercise both the 25,842 open $750 calls as well as the 2,788 open $755 call contracts before the share price zooms higher next week.

Typically, market makers are option sellers more than they are option buyers. So assignment on those 750 strike calls is more likely to be sucking shares out of the market makers hands, than enabling them to accumulate more.


Of course, there are more big actors in the market than the market makers, and those other big actors may indeed be using assignment as a mechanism for scooping up shares.

 

[MP3Mike]

Tweet from Baron Funds:

In a December 9, 2020 interview with Business Insider, Baron Capital CEO Ron Baron talks about the evolution of his investment process, lessons and mistakes of his career, and the biggest opportunities he sees in the market today.

Business-Insider-Article-Reprint-Ron-Baron-Profile-12.09.20

Ron Baron earned a $4.2 billion windfall just from investing in Tesla. The legendary investor told us why he still expects a 30-fold return from Elon Musk.

Note: The 30x refers to his investment in SpaceX.

 

[Artful Dodger]

After-action Report: Wed, Jan 06, 2021: (Full Day's Trading)

Headline: "TSLA Soars; TSLAQ Sores"

Traded: $34,092,727,510.11 ($34.09B)
Volume: 44,720,804
VWAP: $762.35

Close: $755.98 / VWAP: 99.16%
TSLA closed BELOW today's Avg SP
TSLA MaxPain (7:00 A.M.): $700.00 (+$5 from Tue)

TSLA S&P 500 Weight: 1.774506% (Jan 05)
Mkt Cap: TSLA / FB $716.594B / $749.983B = 95.55%
Note: Yahoo Finance yet to update TSLA Mkt Cap re shares issued Dec 11th (SEC Filing)
​

CEO Comp. Status: (est'd Mkt Cap including Dec 11th shares)

TSLA 30-day Closing Avg Market Cap: $635.24B
TSLA 6-mth Closing Avg Market Cap: $420.30B

Mkt Cap req'd for 7th tranche ($400B) likely achieved on Tue, Dec 29, 2020
Nota Bene: Operational milestones are req'd for this tranche.
​

'Short' Report:

FINRA Volume / Total NASDAQ Vol = 51.2% (50th Percentile rank FINRA Reporting)
FINRA Short / Total Volume = 59.4% (56th Percentile rank Shorting)
FINRA Short Exempt ratio was 1.03% of Short Volume (50th Percentile Rank Exempt)​

QOTD*: Ben Carson (Mar 2016) "How bad can it get?"

Comment: "Pre-deleted to save MODS the bother"

View all Lodger's After-Action Reports

Cheers!

*Quote of the Decade

 

[Dancing Lemur]

Don't forget the close last week (12/31) was at $705.69 to exercise the $700 and the $705 calls for cheap (relative to current price). If they follow the same strategy the close this Friday should be just over $755 to exercise both the 25,842 open $750 calls as well as the 2,788 open $755 call contracts before the share price zooms higher next week.

Whether this was a cabal executing a strategy or the market pricing normal action, this happened last week as you say. As I remember, there were some 30K OI at 700 on Thursday morning (I paid special attention, as I was short 700 calls). So there seemed to be a good reason to peg 700, but it unfolded as you say.

Those insidious forces can pivot any time they like and make money on both sides. But those forces are also competing against each other, so they may have different aims.

In any case, your point is taken — we like to talk about max pain and walls of calls, but not the times they’re breached. Last week, was that because TSLA is trading differently now, or because of the unique nature of the EOY derivatives? There may be too much momentum to hold 750 this week regardless, but it’s something interesting to watch from here on (at least, for me, who sells weekly calls).

 

[capster]

My 0.02, but I wonder if we have entered a new dynamic in regards to TSLA share price. The people that were previously vested to suppress the stock no longer (mostly) have that desire. They report to overlords that want the S&P to go up and enrich their clients. And much as they hate it, TSLA is now part of that enrichment.

Sure, there are still the shorts . . . but they are looking more and more isolated every day.

Maybe the investment banks are mosying away from their former BFF’s from the oil patches. One can hope.

 

[OrthoSurg]

After reading Gary Black tweet, I was expecting a 20-30% correction after S&P500 inclusion and then a more steady gradual increase.

Conclusion: Gary Black is not always right

 

[jw934]

Whether this was a cabal executing a strategy or the market pricing normal action, this happened last week as you say. As I remember, there were some 30K OI at 700 on Thursday morning (I paid special attention, as I was short 700 calls). So there seemed to be a good reason to peg 700, but it unfolded as you say.

Those insidious forces can pivot any time they like and make money on both sides. But those forces are also competing against each other, so they may have different aims.

In any case, your point is taken — we like to talk about max pain and walls of calls, but not the times they’re breached. Last week, was that because TSLA is trading differently now, or because of the unique nature of the EOY derivatives? There may be too much momentum to hold 750 this week regardless, but it’s something interesting to watch from here on (at least, for me, who sells weekly calls).

I am thinking the cheapest way to buy large number of shares on 12/31 at $700 and $705 without causing a price spike might be if, say, there was a sudden price drop near the final trading hours causing traders with long calls and the brokerage sells off calls positions in accounts that did not have enough cash to exercise, say between 2:10PM until 3:30PM, then someone decides to open a large position in 700/705 calls for pennies at 3:30PM when the SP fell to under $700. If that were to happen, then either MM hedging and/or share purchases could cause SP to go up to, say slightly above $705, in the last 30 minute.

Disclaimer: I have no idea how the option market works in detail.

It will be interesting to know how the volume and open position change in the final minutes this Friday afternoon for those expiring $750 calls.

 

[mickificki]

After reading Gary Black tweet, I was expecting a 20-30% correction after S&P500 inclusion and then a more steady gradual increase.

Conclusion: Gary Black is not always right

Infidel!

 

[TheTalkingMule]

Maybe the investment banks are mosying away from their former BFF’s from the oil patches. One can hope.

The banks left US oil & gas in fall of 2019, you could feel it. Everyone recognized they're 20% in the hole lifetime and this fairytale was never gonna pay out.

 

[Discoducky]

After reading Gary Black tweet, I was expecting a 20-30% correction after S&P500 inclusion and then a more steady gradual increase.

Conclusion: Gary Black is not always right

Since there was no correction, then there were not enough, or no sellers at that price. Also, the way it seems the graphs are looking (lots of symmetric jagging) it would seem things are being manipulated to offer buying opportunities in small chunks. But since the stock continues to climb, not enough sellers and less float.

What if we still have lots of forced (benchmarked) buying that needs to occur as well as re-indexing/rebalancing come the end of the cycle?

I know we don't own a large percentage of shares overall, but since Elon isn't selling, Barron's isn't selling and many other large holders aren't selling, I wonder what is going to happen come earnings? ​

 

[amolina]

Troy claims that shanghai is not at 8k/week production according to the industrial securities report
https://twitter.com/TroyTeslike/status/1347005298297491458

 

[TheTalkingMule]

Don't forget the close last week (12/31) was at $705.69 to exercise the $700 and the $705 calls for cheap (relative to current price). If they follow the same strategy the close this Friday should be just over $755 to exercise both the 25,842 open $750 calls as well as the 2,788 open $755 call contracts before the share price zooms higher next week.

Certainly feels very tight. No real reason for normal people to be accumulating, so this is short covering and benchmarked funds. Probably a LOT of purchasing waiting for any dip. Should be a very strong foundation for stimulus or YE earnings/guidance liftoff.