I still see tons of stories talking about Tesla's "demand cliff" in 2019. That makes zero sense to me. Opening up the European market and possibly China should dwarf any sort of demand slump in the US, even if US demand does slump.
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Tesla, TSLA & the Investment World: the Perpetual Investors' Roundtable
- Thread starter AudubonB
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And I think a plausible argument can be made that Tesla is doing something like this based on the number of Model 3s currently waiting to be shipped somewhere by boat right now. The company has shown a keen awareness of inventory management up to now; I think it's safe to assume that trend will continue. And the great thing is, we will likely know if it does!
JustAaronnoraA
Member
Yes - I believe someone is protecting the $350 price barrier: there's a large number of $350 CALL options sitting there:
Code:PUT $300: 2,267 ## , CALL $300: 890 # PUT $302: 567 # , CALL $302: 139 PUT $305: 3,559 #### , CALL $305: 713 # PUT $307: 450 , CALL $307: 135 PUT $310: 1,976 ## , CALL $310: 519 # PUT $312: 570 # , CALL $312: 335 PUT $315: 1,537 ## , CALL $315: 635 # PUT $317: 602 # , CALL $317: 303 PUT $320: 3,316 ### , CALL $320: 1,142 # PUT $322: 1,300 # , CALL $322: 420 PUT $325: 1,796 ## , CALL $325: 1,752 ## PUT $327: 1,446 # , CALL $327: 598 # PUT $330: 6,097 ###### , CALL $330: 2,876 ### PUT $332: 892 # , CALL $332: 813 # PUT $335: 1,589 ## , CALL $335: 2,301 ## PUT $337: 518 # , CALL $337: 1,549 ## PUT $340: 1,709 ## , CALL $340: 3,258 ### PUT $342: 370 , CALL $342: 1,047 # PUT $345: 843 # , CALL $345: 1,621 ## PUT $347: 238 , CALL $347: 847 # PUT $350: 537 # , CALL $350: 4,143 #### PUT $352: 78 , CALL $352: 982 # PUT $355: 185 , CALL $355: 1,868 ## PUT $357: 90 , CALL $357: 829 # PUT $360: 97 , CALL $360: 1,886 ## PUT $362: 57 , CALL $362: 349 PUT $365: 96 , CALL $365: 831 # PUT $367: 18 , CALL $367: 386 PUT $370: 132 , CALL $370: 1,025 # PUT $372: 4 , CALL $372: 732 # PUT $375: 22 , CALL $375: 700 # PUT $377: 3 , CALL $377: 222 PUT $380: 7 , CALL $380: 1,039 # PUT $382: 0 , CALL $382: 75 PUT $385: 15 , CALL $385: 262
There's 700,000 shares-equivalent call options between $350 and $360. If a market maker has written those call options but doesn't have 700,000 TSLA shares in inventory to cover the delta risk, then they might have found it cheaper to sell 100-200k TSLA shares short at around $247 to protect the closing price (which determines call option payouts).
They might also have excess TSLA inventory and are now trimming that and protecting $350 at the same time.
Pure speculation.
We'll know whether that big sale which reduced the price by about $4 within a couple of ticks was a short seller or a stock owner in 1-2 months when the FINRA short seller transaction data comes out. (By that time the information will have lost much of its value - which is the point of those excessive delays in transaction level data disclosures ...)
In ~20 minutes we'll also know whether there's a bigger fish around who wants a closing price beyond $350:
350 puts + 75k share dump caused that
Possible. Although if so then expect a huge freakout about the InsideEVs Jan/Feb deliveries estimate for the US
"The tax credit went away and NOBODY WANTS A TESLA ANY MORE!!!" Also, uneven shipping creates localized inventory / deliveries problem. Hope they seriously improve their infrastructure for handling such huge "waves".
dgodfrey
Member
Fact Checking
Well-Known Member
$350 strike puts open interest is still the same 517 contracts as it was a couple of hours ago.
Do you mean that someone with $350+ put contracts did the 75k share dump, to make sure the PUT contracts expire in the money?
I have no idea how the markets will interpret nor do I care. We generally only invest long. But Tesla is a finicky stock and it seems the short term price is more affected by headlines than anything else. Look at last quarter 2018. Headlines saying they missed expectations. Really. Whose. In what universe. I just think that if there are 20K cars in transit it will get spun. Won't affect long term growth but if your a day trader it might be an opportunity.
I am in no way a market guru. Middle class mid 50's guy that doesn't owe anything to anybody and retiring at 60 in 4 years...with a model 3 in about a year.
It's very easy to get distracted when shorts constantly post negative things about Tesla.
Take a look of these major factors:
1. The progress of General AI self-driving - if this comes out as planned, even if it's not perfect yet, the impact to the market cap should be significant. Quarterly sales going up or down is nothing compared to this factor. The market cap should triple when this comes out.
2. Opening the 100% owned Gigafactory in China is a major achievement. This can drop Model 3's overall cost in China by ~$30k (production cost down, tariff gone, tax down, incentives up). Not only the demand will go up dramatically, Tesla will have room to get healthy margin. Then they will start to build the next gigafactory in China.
3. Joining the S&P 500 index. At this point it's clear we are highly likely to join the index in months. If shorts want to push the stock down hard, they have the risk to get into deeper trouble. I wouldn't hesitate to add shares if they push.
Take a look of these major factors:
1. The progress of General AI self-driving - if this comes out as planned, even if it's not perfect yet, the impact to the market cap should be significant. Quarterly sales going up or down is nothing compared to this factor. The market cap should triple when this comes out.
2. Opening the 100% owned Gigafactory in China is a major achievement. This can drop Model 3's overall cost in China by ~$30k (production cost down, tariff gone, tax down, incentives up). Not only the demand will go up dramatically, Tesla will have room to get healthy margin. Then they will start to build the next gigafactory in China.
3. Joining the S&P 500 index. At this point it's clear we are highly likely to join the index in months. If shorts want to push the stock down hard, they have the risk to get into deeper trouble. I wouldn't hesitate to add shares if they push.
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Fact Checking
Well-Known Member
That's probably right - especially if the 'increase' in finished goods inventory causes Tesla to miss free cash flow expectations. The market seems to have trouble multiplying the average ASP of with the number of vehicles in transit, and combine it with the 98%+ delivery acceptance rate.
Possible. Although if so then expect a huge freakout about the InsideEVs Jan/Feb deliveries estimate for the US
Also, uneven shipping creates localized inventory / deliveries problem. Hope they seriously improve their infrastructure for handling such huge "waves".
Exactly. My point is there might be some good opportunities coming soon. We know how deliveries work, but many less informed players and short term swing traders (And apparently professional stock analysts) don't. This will create opportunities for those who are able to correctly discount these short term fluctuations and have dry powder ready.
I look forward, after the new AP follow / remote control features come out, to all of the reaction videos. Just think of how easy it would be to prank people by, say, walking down the street with your Tesla on a dog leash, as though you were walking it
I'm a FSD pessimist. But that said, the act of pushing the bounds on this earns Tesla a "tech perception premium", where the public perceives the company as leading edge and it encourages sales, even to people who have no interest in FSD. Exact same thing that happened to Toyota when they came out with the Prius - it made Toyota seem "leading edge", and this boosted sales even of non-Prius vehicles.
Just think about how that "Promobot" company got away with their fake "Self-driving Tesla hit our robot" video. The capabilities they described for the Tesla don't exist. They described a passenger getting into a Tesla, hitting a button on the screen, and the car suddenly starts driving itself down the road. To anyone who knows anything about what AP is today, that's nonsense; it's far from that point. But to the general public, they were fully ready to believe that Teslas can do that. Because Tesla has a tech perception premium.
This ratio has flipped today -- .88 put/call ratio. Also, there was significant volume on Jan 2020 $310 puts today. I'm assuming this is a hedge against shares? If so, would be a bullish trade.
JustAaronnoraA
Member
We have had a nice six day run. However the run up has been on below average and declining volume. Often a sign that a pullback is near.Why, is that green I see on my screen?
If we close green that'll be six days in a row. Such a long streak only happens rarely, less than once per year on average. Jun. 2018, Mar. 2016, Apr. 2015, June 2013, etc.
Fact Checking
Well-Known Member
Indeed, 1,250 PUT contracts were traded, 2020 Jan 17 expiry, $310 strike price.
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Reciprocity
Active Member
As beautiful as Bonnie is, whats relevant here is that she is a long time Tesla support with contacts within the company that can on occasion, make sure the right people see the right information.
JustAaronnoraA
Member
Yes - I believe someone is protecting the $350 price barrier: there's a large number of $350 CALL options sitting there:
Code:PUT $300: 2,267 ## , CALL $300: 890 # PUT $302: 567 # , CALL $302: 139 PUT $305: 3,559 #### , CALL $305: 713 # PUT $307: 450 , CALL $307: 135 PUT $310: 1,976 ## , CALL $310: 519 # PUT $312: 570 # , CALL $312: 335 PUT $315: 1,537 ## , CALL $315: 635 # PUT $317: 602 # , CALL $317: 303 PUT $320: 3,316 ### , CALL $320: 1,142 # PUT $322: 1,300 # , CALL $322: 420 PUT $325: 1,796 ## , CALL $325: 1,752 ## PUT $327: 1,446 # , CALL $327: 598 # PUT $330: 6,097 ###### , CALL $330: 2,876 ### PUT $332: 892 # , CALL $332: 813 # PUT $335: 1,589 ## , CALL $335: 2,301 ## PUT $337: 518 # , CALL $337: 1,549 ## PUT $340: 1,709 ## , CALL $340: 3,258 ### PUT $342: 370 , CALL $342: 1,047 # PUT $345: 843 # , CALL $345: 1,621 ## PUT $347: 238 , CALL $347: 847 # PUT $350: 537 # , CALL $350: 4,143 #### PUT $352: 78 , CALL $352: 982 # PUT $355: 185 , CALL $355: 1,868 ## PUT $357: 90 , CALL $357: 829 # PUT $360: 97 , CALL $360: 1,886 ## PUT $362: 57 , CALL $362: 349 PUT $365: 96 , CALL $365: 831 # PUT $367: 18 , CALL $367: 386 PUT $370: 132 , CALL $370: 1,025 # PUT $372: 4 , CALL $372: 732 # PUT $375: 22 , CALL $375: 700 # PUT $377: 3 , CALL $377: 222 PUT $380: 7 , CALL $380: 1,039 # PUT $382: 0 , CALL $382: 75 PUT $385: 15 , CALL $385: 262
There's 700,000 shares-equivalent call options between $350 and $360. If a market maker has written those call options but doesn't have 700,000 TSLA shares in inventory to cover the delta risk, then they might have found it cheaper to sell 100-200k TSLA shares short at around $247 to protect the closing price (which determines call option payouts).
They might also have excess TSLA inventory and are now trimming that and protecting $350 at the same time.
Pure speculation.
We'll know whether that big sale which reduced the price by about $4 within a couple of ticks was a short seller or a stock owner in 1-2 months when the FINRA short seller transaction data comes out. (By that time the information will have lost much of its value - which is the point of those excessive delays in transaction level data disclosures ...)
In 1 hour 20 minutes we'll also know whether there's a bigger fish around who wants a closing price beyond $350:
Thanks FC, super-interesting these little analyses you do for us, thanks to these I begin to understand things much better.
Looks like Max Payne won't be visiting today, can't see it dropping to 330 from here...
Jeff Bezos text messages to Sanchez , given the consequences imply
He is unstable?
He is unstable?
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