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

[lafrisbee]

I never had the courage to ask this due to fear of sounding dumb, but here it goes: what does it mean to say the MMs are pushing the stock (in either direction)? Thanks in advance.

There is an opinion that financial entities profit by writing(selling) calls and puts. They set the rules of the game for the most part. And they have the resources to determine how much they will make if they charge this or that much for each contract. And in a fair game the stock price would float in relation to demand based on the perception by the public of the stock/company.
However market makers have the finacial resources to play various games to sell or buy large amounts of the stock, thereby influencing the stock price to be where it causes the MAXPAIN to the investors who bought the contracts.
Some believe it is poppycock. I used to. But then I started following TSLA very closely. And massive irrational movement of the stock price could not be explained...except when you looked at the MM's benefitting from the Stock price in relation to the MAXPAIN Price.
Now I've seen enough to know the MM's are a dark force. They even set their own snares for amateur retail buyers... they will send the price down by selling stock, and those that doubt TSLA is worth its current price will buy puts. And they will send it high by buying stock at a rapid pace, and those that love TSLA will buy Calls.
But MM's make MOST of the rules... except every so often something happens that they do not have enough power to keep the stock where they want it at close on Friday (when all the options are scored). Only on those days do the retail options buyers get rewarded...if they guessed the right way.
The other nasty thing MM's are known to do is naked shorting..another topic, best left for one of the more knowedgeable
So if you see the stock swinging through the week for no real reason it is the MM's either laying traps, or bringing the stock to the maxpain price.

 

[Tslynk67]

I never had the courage to ask this due to fear of sounding dumb, but here it goes: what does it mean to say the MMs are pushing the stock (in either direction)? Thanks in advance.

To add to the other replies you received...

MM's sell options, puts and calls - you can see a snapshot at the close of the previous day's trading here, open interest being the number of positions held, volume being the number of trades in that session: Stock Option Max Pain

It's in the interest of the MM's for the closing price on a given Friday to be at that point (of maximum pain) where the sum of the puts and calls causes them the lowest losses

It's within their power to manipulate the stock towards this price and on low volume days they will do this. Now of course it costs them money to manipulate, but they make up for this by, for example, inducing stop-losses by shorting and then re-buying before everyone else has caught their breath

They also sometimes play about to harvest more calls - for instance they'll let the stock run up close to psychological price-points with high open interest, like $700 this week, to encourage more traders to buy calls at tat strike, then they'll run it down a bit, like yesterday, and harvest some put sales in the $660's

Towards the end of the week, a lot of traders will realise their calls will finish OTM, so they start selling their positions at a loss back to the MM's, thus guaranteeing a profit and reducing risk

Not to mention delta-hedging too, which is a consequence of the heavy options trading in $TSLA and often leads to some of the outside price movement we see, this is where there is a lot of open-interest at a strike and the stock moves towards it more rapidly than the MM's expected, and thus they feel the need to buy shares to cover the calls, which leads to more price-rises, etc., a bit like a short-squeeze. We get the converse too, when a popular strike price looks like it has no chance of being ITM, the MM's will unwind their hedges, which can lead to an outside drop in the SP

It should also be noted that macro or big news (positive or negative) can invalidate any efforts of manipulation on any given day

And it can also be the case that some MM's will be defending price X, another trying t get that price at close, I think this is the most likely reason we sometimes see epic battles on Friday close a few cents either side of a certain price - which can be very entertaining indeed, especially when you've got some skin int he game yourself

I'm sure I over-simplify things, but that's how my feeble brain sees it

IMO, buying weeklies is a suckers game, sometimes it pays big, mostly you will lose. Selling options is where it's at!

Edit: what @lafrisbee said...

 

[MTL_HABS1909]

A car that isnt in production isnt having production issues. Can have the Model S/X Refresh specific call and not show the Plaid+

They may be having issues with 4680 dude....

Edit: Also speaking as someone who works in manufacturing, there is such a thing as developmental production. Just saying.

 

[buttershrimp]

View attachment 643590
Someone doesn't want TSLA to close above 700 on Friday. Look at the NASDAQ and compare its trading to TSLA. You will see TSLA has an exaggerated Mandatory Morning Dip at 10:20am. Look at the very clear capping pre-market just below 700 and the clear capping at 695 during market hours. When TSLA dares stick its head above 695 it's "WHACK-that-mole!"

I consider this a bullish sign that someone is giving buyers today a discount.

How many people does it take to play whack a mole to try to suppress SP below 700 on this volume? I always wonder how they can possibly coordinate among other large players. Is it 2 or 3 large hedge funds sharing their positions with other hedge funds that allows them to coordinate or is it kind of obvious where the price point is they might try to exert pressure based on algos?

 

[StarFoxisDown!]

ar lord just how many orders are they getting for the Plaid + S ?????

I've heard through other channels that demand for Plaid and Plaid + have been through the roof since

To add to the other replies you received...

MM's sell options, puts and calls - you can see a snapshot at the close of the previous day's trading here, open interest being the number of positions held, volume being the number of trades in that session: Stock Option Max Pain

It's in the interest of the MM's for the closing price on a given Friday to be at that point (of maximum pain) where the sum of the puts and calls causes them the lowest losses

It's within their power to manipulate the stock towards this price and on low volume days they will do this. Now of course it costs them money to manipulate, but they make up for this by, for example, inducing stop-losses by shorting and then re-buying before everyone else has caught their breath

They also sometimes play about to harvest more calls - for instance they'll let the stock run up close to psychological price-points with high open interest, like $700 this week, to encourage more traders to buy calls at tat strike, then they'll run it down a bit, like yesterday, and harvest some put sales in the $660's

Towards the end of the week, a lot of traders will realise their calls will finish OTM, so they start selling their positions at a loss back to the MM's, thus guaranteeing a profit and reducing risk

Not to mention delta-hedging too, which is a consequence of the heavy options trading in $TSLA and often leads to some of the outside price movement we see, this is where there is a lot of open-interest at a strike and the stock moves towards it more rapidly than the MM's expected, and thus they feel the need to buy shares to cover the calls, which leads to more price-rises, etc., a bit like a short-squeeze. We get the converse too, when a popular strike price looks like it has no chance of being ITM, the MM's will unwind their hedges, which can lead to an outside drop in the SP

It should also be noted that macro or big news (positive or negative) can invalidate any efforts of manipulation on any given day

And it can also be the case that some MM's will be defending price X, another trying t get that price at close, I think this is the most likely reason we sometimes see epic battles on Friday close a few cents either side of a certain price - which can be very entertaining indeed, especially when you've got some skin int he game yourself

I'm sure I over-simplify things, but that's how my feeble brain sees it

IMO, buying weeklies is a suckers game, sometimes it pays big, mostly you will lose. Selling options is where it's at!

Which is why at the beginning of every week I"m rooting for any sort of big news to come out on after hours Thursday or pre market on Friday just to mess with the MM's.

 

[elasalle]

They may be having issues with 4680 dude....

https://twitter.com/x/status/1370088049250611210

So the word on the street is that Tesla is having a difficult time making the dry electrode for the 4680 cells. Keep in mind, dry electrode coating was one of the key breakthroughs Tesla touted on Battery Day that would allow 4680 to achieve the impressive specs presented.

 

[StarFoxisDown!]

https://twitter.com/x/status/1370088049250611210

So the word on the street is that Tesla is having a difficult time making the dry electrode for the 4680 cells. Keep in mind, dry electrode coating was one of the key breakthroughs Tesla touted on Battery Day that would allow 4680 to achieve the impressive specs presented.

So while this could always been true....it goes in the face of what Elon and the Tesla team said on the earnings Q4 where the dry electrode process had been de-risked and that they were ahead of schedule

Edit: Yeah now that I read through that person's entire tweet thread, I'm calling BS. All of the information that's presented is outdated information and direct contradiction to what the Tesla team said only a month ago and does absolutely nothing to confirm or add weight to their "rumor" they're saying they heard. In fact, this person has apparently been skeptical of Tesla's 4680 Cell's pretty much since Tesla had Battery Day.

 

[buttershrimp]

https://twitter.com/x/status/1370088049250611210

So the word on the street is that Tesla is having a difficult time making the dry electrode for the 4680 cells. Keep in mind, dry electrode coating was one of the key breakthroughs Tesla touted on Battery Day that would allow 4680 to achieve the impressive specs presented.

dry powder electrode?

 

[Norwalk79]

Dear Tesla comrades: I forgot several important factors that affect Tesla's recovery and advance:

1) Remember that Tesla has the most enemies who want to kill Tesla for good before it fully develop all of its advantages. This is similar to Russia wants to kill its opposition leader for good. Here is a limited list of its enemies:
This time is the beginning of the end of 100 yr old oil industries/nations/ICE cars manufacturers and the start of the new fields of Clean and renewable Energy/Storage, Electric Vehicles, FSD subscription and Robotaxis/delivery.

Tesla is the most advanced Leader in all of the above fields and will become the next Amazon, Apple and Google, has the most enemy, therefore, Tesla shorts, VW and oil companies/industry/nations have started to give one final push to kill before Tesla crush competition with its lowest price highest value $25K model 2 by the end this year 2021 together with Berlin Giga already has 8 Giga Press for model 3 and Y + ready to make new 4680 battery with $1B incentive, 2,500 Semi trucks in Texas, FSD and insurance started by 2nd Quarter of this year. The Solar Energy Storage of Tesla Power Walls and MegaWatts will advance along the way since Texas lost power 4 days in freezing temp, rolling shutdown in California and NorthEastern states losing power during heavy snow periods.

2) All other funds are jealous of the rocket Tesla flying too high making their investment look bad compared to Cathie Wood's funds

3) All Tesla shorts hate Elon & Tesla because they lost $40B in 2020 alone in shorting Tesla. They will never quit trying until they die. Trust me on this.

So, please tell everybody to invest in Tesla, the most glorious story in 2021 besides the GameStop fairy tale

That's all I can think of for now.
Good luck to all. Cheers

 

[ZeApelido]

https://twitter.com/x/status/1370088049250611210

So the word on the street is that Tesla is having a difficult time making the dry electrode for the 4680 cells. Keep in mind, dry electrode coating was one of the key breakthroughs Tesla touted on Battery Day that would allow 4680 to achieve the impressive specs presented.

Didn't Musk say on Q4 call they had figured out dry electrode issues?

 

[capster]

I don't invest capital that I'm not planning on leaving invested for years. That said, if I make a mistake, if the picture changes, I will sell instantly, capital gains taxes be damned. Traders will trade and a few will beat me. Most will not.

Ah, but will you stay in Washington State, if the state capital gains goes from 0% to 7%?

 

[MTL_HABS1909]

So while this could always been true....it goes in the face of what Elon and the Tesla team said on the earnings Q4 where the dry electrode process had been de-risked and that they were ahead of schedule

Edit: Yeah now that I read through that person's entire tweet thread, I'm calling BS. All of the information that's presented is outdated information and direct contradiction to what the Tesla team said only a month ago and does absolutely nothing to confirm or add weight to their "rumor" they're saying they heard. In fact, this person has apparently been skeptical of Tesla's 4680 Cell's pretty much since Tesla had Battery Day.

Manufacturing at scale is very difficult. While they may have thought it was de-risked, any number of issues could have arisen since then. People who don’t work in manufacturing will never understand just how hard it is. That’s why Elon keeps reiterating this.

 

[Papafox]

How many people does it take to play whack a mole to try to suppress SP below 700 on this volume? I always wonder how they can possibly coordinate among other large players. Is it 2 or 3 large hedge funds sharing their positions with other hedge funds that allows them to coordinate or is it kind of obvious where the price point is they might try to exert pressure based on algos?

Chamath Palihapitia has said that some hedge funds were leveraged over 10X and one may have actually achieved over a trillion dollars of trading power. Wrap your mind around that. It only takes one big player like that to cap, but it's also possible for hedge funds to find mutual benefit to certain actions.

 

[RobStark]

The autonomy is the real competition killer here. Who on earth is going to want an old school car with no autonomy beyond adaptive cruise, lane keeping, and emergency collision avoidance when an equivalent Tesla can fully self drive and has a state of the art big screen entertainment package built in for similar money?

About the same number of people as those wanting a none smart phone!

No one will want a non- autonomous car. For the same price to an otherwise equivalent vehicle.

If an autonomous car is an extra $10k Plus or $200 Plus per month plenty of people will pick the non-autonomous vehicle.

Until level 5 autonomy becomes ubiquitous (per Elon) 10 years after Tesla achieves it and drives down the price with many players competing for the Level 5 autonomy market.

 

[traxila]

Didn't Musk say on Q4 call they had figured out dry electrode issues?

I mean someone actually TWEETED the opposite, so you can't question the source.

Let's get real now, there is a tweet out there about the word on the street.

 

[Tyler34]

Ah, but will you stay in Washington State, if the state capital gains goes from 0% to 7%?

Only on above 250k gains....so like 6.99999% overall for TSLA investors

 

[RobStark]

I agree. Either the government will prop them up directly or give them certain economic advantages relative to Tesla.

Germany/EU just needs to ban fully autonomous ride hailing services until VW/MB/BMW can offer them. Even if that is 10 years.

 

[StarFoxisDown!]

Manufacturing at scale is very difficult. While they may have thought it was de-risked, any number of issues could have arisen since then. People who don’t work in manufacturing will never understand just how hard it is. That’s why Elon keeps reiterating this.

I'm not saying it's easy........I'm going directly off of what Tesla said on the earnings call about the progress of the 4680 Cells and specifically the dry electrode process.

https://twitter.com/x/status/1370093054481158144

Someone actually replied to that tweet already with direct quotes from the Q4 earnings call. When the Tesla team is saying "Meanwhile, we've developed enough engineering confidence with our 4680 design and the production process and equipment to kick off manufacturing equipment and facility construction to support our 100 gigawatt hour 2022 goal"........then inclined to believe them over some random person on Twitter saying there's a rumor and then using very outdated quotes to back up their rumor.

 

[Cobos]

Didn't Musk say on Q4 call they had figured out dry electrode issues?

Yes he did. He could be lying of course, or some random guy on Twitter/WS could be talking out his behind. I know whom I put my faith in.

 

[WattsHappening]

View attachment 643590
Someone doesn't want TSLA to close above 700 on Friday. Look at the NASDAQ and compare its trading to TSLA. You will see TSLA has an exaggerated Mandatory Morning Dip at 10:20am. Look at the very clear capping pre-market just below 700 and the clear capping at 695 during market hours. When TSLA dares stick its head above 695 it's "WHACK-that-mole!"

I consider this a bullish sign that someone is giving buyers today a discount.

I find this so fascinating! Thanks Papafox.