I don't want to needlessly sell mainly because of taxes. The short term gain taxes I would pay would far outweigh any margin interest savings I would get from changing brokers. I've been financing the monthly margin I pay by selling OTM covered calls. Because of the insane Tesla volatility, selling weekly covered calls and selling naked puts can be very lucrative and more than cover the 8-9% margin interest I pay and then some.
I started this account with about $100,000. I was treading water until I discovered Tesla. I first bought 50 shares of TSLA in April 2018 after the stock dropped from Model 3 production problems. I figured any manufacturing problems could eventually be solved and the market had overreacted. The stock quickly rebounded and shot back up to around $300+ range and I was hooked. I bought some more in the $300 range and started really learning about Elon and Tesla. I bought and read the book about Elon and came away very impressed with him. Then I listened to all the earnings conference calls, product reveals, and any interview of Elon I could find on the internet and Youtube. I spent crazy amount of time reading and watching everything on Elon and Tesla. The more I researched and learned, the more I became convinced Elon was the real deal and he and Tesla was going to change the world. Then his take private tweet happened.
When I saw his take private tweet, I panicked and went full margin to buy as many TSLA shares as my TD account allowed. I think my account peaked at around $150k before the climbing back down once people started to question the funding secured story. Then I went through some painful months with Elon with him taking a puff of weed on Joe Rogan podcast and then later SEC lawsuit. That was painful time for me being on full margin but I'm sure it was even more painful for Elon. I traded around constant margin calls and survived. And when Tesla made surprise profit 3rd quarter of 2018, I become whole again and reached around $150k again in December 2018. I could've sold all my margin position in December 2018 but I got greedy and thought Tesla had finally turned the corner. I didn't want to sell something I thought could easily be 10x or more in the next 5-10 years. So I held thinking 2019 was going to be awesome with the Model Y introduction and possible S&P 500 later in 2019. Then Q1 2019 happened. And I almost went from $150k to $0.
I was still on full margin in April 2019, and I started getting margin calls almost everyday. April 2019 to June 2019 was like bad nightmare. I sold and traded my TSLA position to save my account. I didn't think Tesla would go from $376 in December 2018 to $178 in June 3, 2019. I think I ended putting in around extra $40k into the account so I wouldn't lose all my TSLA shares. On June 3, 2019, my account was worth around $45k but $40k was new money I added to save the account. Only about $5k of the original $100k remained. But even during this darkest of time, I didn't lose faith in Elon and Tesla. I had two other accounts so I bought TSLA in those accounts. I also bought TSLA for my mom and my sister's IRA accounts. I think I got them in at around $192 or so. I told them to never sell and they're real happy with me today as their IRA accounts have grown to levels they didn't even dreamed of.
I started lurking on this forum and thread around June 2019 I think. The awesome members and posters helped me navigate that difficult period of my life and helped me keep my faith in Elon and Tesla. I bounced back strongly after the surprise Q3 2019 earnings and kept my foot on the metal by continuing to margin to the max. I was so aggressive that I was sometimes getting margin calls even as TSLA stock price was going up if we had one or two down days. But I had a sense of extreme urgency. I felt like I had to acquire as many TSLA shares while the price was still affordable. And I figured the margin debt would become smaller part of the portfolio if price of TSLA increased. So I kept increasing my leverage and pretty much kept 1:1 ratio of equity and margin debt. Because TSLA is concentrated position for me, I can't get the normal 4x margin.
I'm now in better place, and I'm no longer on full margin. I own 1,300 shares of TSLA and one Jan '21 $300 call and one Jan '21 $420 call. I still have $270k of margin debt, but I feel that's pretty manageable. I sell weekly OTM covered calls to cover the margin interest I pay each month. But I don't sell covered calls if I think TSLA is about to move up. I've been caught and had to buyback sold calls at huge loss. Then I feel like I've been run over by steamroller while trying to pickup pennies in front of it.
I took out the $40k lifeline money I added back in June 2018 and gave that back to my wife. That was her money, and I'm very grateful she gave me the money in my time of need. She's been awesome throughout this whole process. When I asked her the other day what would happen if something like June 2019 happened again, and she said we started with $100k on this account so we would just be back to where we started. She said we were fine then and we would be fine again. I love my wife.
Here's picture of my account today.
You can see the low on June 3, 2019 at $44,857. That was with $40k new money added. So the real balance was like $4,857. That was crazy time and really tested my resolve. It's true, what doesn't kill you makes you stronger.
Here's all time chart of the account. You can see the account had around $100k and then the graph lines going all up and down after around July 2018. I think that was around the time of the funding secured tweet and I first went full margin. My daily volatility has been insane since.
