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

[kyzhk]

I’ll take this as the buy signal for deep OTM lottos.

At the China gigafactory ground breaking event, Elon was not able to resist his urge and danced.

This is bullish af. We know the numbers are gonna be good - however, theres one caveat:

The "analyst" have engineered a delivery miss headline by filling in unrealistically optimistic estimate and tsla tanked 10%.

So I am gonna play both direction, deep out of the money puts and calls. The stock can move in either direction violently and I would come out ahead regardless.

I will buy weeklies on 1/29 (or maybe even 1/22?) and every Tuesday afterwards until ER.

The puts would be considered hedge and the calls would be considerd lottery.

 

[Causalien]

This is an interesting idea, but recessions do not last an "average" amount of time. And the current situation is, if not unprecedented in world history, certainly unprecedented in US history.

From the point of view of big investors and traders and business magnates, the US is being re-evaluated through the lens used to evaluate third-world countries with unstable governments and a lack of rule of law. This is big.

There are still definitely individual stocks which will do great for their own individual reasons, like Tesla, but don't be surprised if the economy is in recession well into 2020. Signs that the government is run by lunatics who don't know what they're doing lead to money-hoarding and capital flight. More in the Macro thread.

Ya. The average is just an anchor. It's hard to predict for timing. I hope ppl always hold this in mind whent it comes to time based forecasts. How long or short the recession is will depend on how the carnage in march plays out. Worst case scenario is a full on trade war with Gina after a negotiation blow up. This one will impact tsla stock price.

For brexit, I actually believe the soft exit is worst economically. A hard brexit will allow Britain to rapidly renegotiate all treaties. There is also the Canzuk movement with Australia Canada and New Zealand eagerly waiting for free trade and full freedom of movement between the English colonies that is not being accounted for as a positive.

 

[Fact Checking]

I'm showing Max Pain for Friday at 322.50. Anyone seeing anything different?

This week (19/01/11 expiry) is one of the minor options weeks with just 38k/38k call/put options open interest.

The big one is next week (19/01/18 expiry) with 840K options contracts, which is a 84 million shares-equivalent derivatives open interest (!):

2019/Jan/11:  PUTs:    38,397 ; CALLs:    38,938
2019/Jan/18:  PUTs:   588,800 ; CALLs:   251,700
2019/Jan/25:  PUTs:    10,339 ; CALLs:     9,774
2019/Feb/01:  PUTs:     4,337 ; CALLs:     6,110
2019/Feb/08:  PUTs:     1,639 ; CALLs:     3,203
2019/Feb/15:  PUTs:    58,953 ; CALLs:    55,646
2019/Feb/22:  PUTs:       747 ; CALLs:     1,389
2019/Mar/15:  PUTs:   161,143 ; CALLs:    52,480
2019/Apr/18:  PUTs:     1,089 ; CALLs:       688
2019/May/17:  PUTs:     1,276 ; CALLs:       428
2019/Jun/21:  PUTs:    99,079 ; CALLs:    50,073
2019/Jul/19:  PUTs:       242 ; CALLs:       391
2019/Aug/16:  PUTs:    38,065 ; CALLs:    16,434
2020/Jan/17:  PUTs:   212,364 ; CALLs:    83,297
2020/Jun/19:  PUTs:     5,920 ; CALLs:     2,452
      total:  PUTs: 1,231,483 ; CALLs:   582,943

In terms of this week's options expectations, here's the histogram, rounded to $10:

 PUT $180:    471                     ,   CALL $180:      4               
 PUT $190:    124                     ,   CALL $190:      1               
 PUT $200:    939 #                   ,   CALL $200:      1               
 PUT $210:    331                     ,   CALL $210:      0               
 PUT $220:    987 #                   ,   CALL $220:      3               
 PUT $230:  1,367 #                   ,   CALL $230:      9               
 PUT $240:    849 #                   ,   CALL $240:      1               
 PUT $250:  2,062 ##                  ,   CALL $250:     19               
 PUT $260:  1,665 ##                  ,   CALL $260:     23               
 PUT $270:  1,764 ##                  ,   CALL $270:     60               
 PUT $280:  1,646 ##                  ,   CALL $280:     89               
 PUT $290:  2,118 ##                  ,   CALL $290:    287               
 PUT $300:  4,093 ####                ,   CALL $300:  1,266 #             
 PUT $310:  6,141 ######              ,   CALL $310:  1,557 ##           
 PUT $320:  5,664 ######              ,   CALL $320:  3,695 ####         
 PUT $330:  4,485 ####                ,   CALL $330:  6,159 ######       
 PUT $340:  1,941 ##                  ,   CALL $340:  5,063 #####         
 PUT $350:    978 #                   ,   CALL $350:  6,680 #######       
 PUT $360:    408                     ,   CALL $360:  4,249 ####         
 PUT $370:    286                     ,   CALL $370:  2,577 ###           
 PUT $380:     63                     ,   CALL $380:  2,793 ###           
 PUT $390:     12                     ,   CALL $390:    880 #             
 PUT $400:      2                     ,   CALL $400:    946 #             
 PUT $410:      0                     ,   CALL $410:    595 #             
 PUT $420:      0                     ,   CALL $420:  1,127 #             
 PUT $430:      0                     ,   CALL $430:    211               
 PUT $440:      0                     ,   CALL $440:    235               
 PUT $450:      0                     ,   CALL $450:    258               
 PUT $460:      0                     ,   CALL $460:     90               
 PUT $470:      1                     ,   CALL $470:     28               
 PUT $480:      0                     ,   CALL $480:     16

Highlights:

• No bankwuptcy short bets worth speaking of. (This is a new phenomenon BTW.: Tesla bankruptcy thesis doesn't exist anymore, at least among options traders who are shorting Tesla and still have money. )
  
• PUT (short) consensus is centered around $310-$320, 95%+ of the PUT options expire worthless above $340, 97% of them above $350.
• CALL (long) consensus is more spread out and centered around $330-$360, with the $350s the highest. 90% of the options expire worthless below $320, 95% below $310 and 99% below $300.

Max pain is somewhere between $320-$340 but could shift during the rest of the week as open interest increases.

Just a quick recap, next week will be absolutely, utterly crazy in terms of options open interest, it was the 2019 LEAP expiry date for ~2 years:

 PUT $010: 36,830 ###################+,   CALL $010:      0               
 PUT $020: 23,437 ###################+,   CALL $020:      3               
 PUT $030: 14,444 ##############      ,   CALL $030:      0               
 PUT $040:  8,369 ########            ,   CALL $040:     10               
 PUT $050: 87,056 ###################+,   CALL $050:     16               
 PUT $060:  9,252 #########           ,   CALL $060:      3               
 PUT $070: 12,881 #############       ,   CALL $070:      6               
 PUT $080: 17,956 ##################  ,   CALL $080:    300               
 PUT $090:  9,813 ##########          ,   CALL $090:    543 #             
 PUT $100: 61,605 ###################+,   CALL $100:  2,424 ##           
 PUT $110:  5,247 #####               ,   CALL $110:    470               
 PUT $120: 15,893 ################    ,   CALL $120:    112               
 PUT $130:  5,003 #####               ,   CALL $130:    400               
 PUT $140:  5,403 #####               ,   CALL $140:     43               
 PUT $150: 26,437 ###################+,   CALL $150:    879 #             
 PUT $160:  3,068 ###                 ,   CALL $160:    251               
 PUT $170:  5,832 ######              ,   CALL $170:    632 #             
 PUT $180:  7,888 ########            ,   CALL $180:    573 #             
 PUT $190:  2,931 ###                 ,   CALL $190:  2,351 ##           
 PUT $200: 30,879 ###################+,   CALL $200:  2,634 ###           
 PUT $210:  7,852 ########            ,   CALL $210:  1,233 #             
 PUT $220:  8,053 ########            ,   CALL $220:    876 #             
 PUT $230: 16,474 ################    ,   CALL $230:  1,730 ##           
 PUT $240: 13,512 ##############      ,   CALL $240:  1,498 #             
 PUT $250: 15,446 ###############     ,   CALL $250:  2,186 ##           
 PUT $260:  6,611 #######             ,   CALL $260:  1,890 ##           
 PUT $270: 12,133 ############        ,   CALL $270:  1,605 ##           
 PUT $280: 18,145 ##################  ,   CALL $280:  1,828 ##           
 PUT $290:  5,613 ######              ,   CALL $290:  3,598 ####         
 PUT $300: 15,978 ################    ,   CALL $300:  9,811 ##########   
 PUT $310:  5,796 ######              ,   CALL $310:  4,478 ####         
 PUT $320:  1,853 ##                  ,   CALL $320:  1,308 #             
 PUT $320:  6,316 ######              ,   CALL $320:  5,179 #####         
 PUT $330: 11,126 ###########         ,   CALL $330:  9,597 ##########   
 PUT $340:  1,757 ##                  ,   CALL $340:  2,025 ##           
 PUT $340: 18,485 ##################  ,   CALL $340:  7,738 ########     
 PUT $350:  1,038 #                   ,   CALL $350:  2,825 ###           
 PUT $350: 12,187 ############        ,   CALL $350: 16,341 ################
 PUT $360:    399                     ,   CALL $360:  1,416 #             
 PUT $360:  4,646 #####               ,   CALL $360: 10,437 ##########   
 PUT $370:  3,583 ####                ,   CALL $370:  6,580 #######       
 PUT $380:  2,474 ##                  ,   CALL $380:  8,489 ########     
 PUT $390:  1,210 #                   ,   CALL $390:  5,332 #####         
 PUT $400:  2,819 ###                 ,   CALL $400: 25,109 ###################+
 PUT $410:    516 #                   ,   CALL $410:  5,089 #####         
 PUT $420:    618 #                   ,   CALL $420:  8,085 ########     
 PUT $430:    259                     ,   CALL $430:  3,089 ###           
 PUT $440:    776 #                   ,   CALL $440:  4,725 #####         
 PUT $450:    168                     ,   CALL $450:  4,989 #####         
 PUT $460:      0                     ,   CALL $460:  2,282 ##           
 PUT $470:      1                     ,   CALL $470:  1,921 ##           
 PUT $480:     27                     ,   CALL $480:  2,403 ##           
 PUT $490:      5                     ,   CALL $490:  1,259 #             
 PUT $500:  1,983 ##                  ,   CALL $500: 12,123 ############ 
 PUT $510:      8                     ,   CALL $510:    552 #             
 PUT $520:      0                     ,   CALL $520:    991 #             
 PUT $530:      1                     ,   CALL $530:    592 #             
 PUT $540:      8                     ,   CALL $540:    470               
 PUT $550:    214                     ,   CALL $550:  3,697 ####         
 PUT $560:      0                     ,   CALL $560:  1,136 #             
 PUT $570:      0                     ,   CALL $570:    323               
 PUT $580:    125                     ,   CALL $580:  1,930 ##           
 PUT $590:      7                     ,   CALL $590:    831 #             
 PUT $600:    347                     ,   CALL $600: 24,551 ###################+
 PUT $610:      0                     ,   CALL $610:  3,602 ####         
 PUT $620:      0                     ,   CALL $620:  1,400 #             
 PUT $630:      0                     ,   CALL $630:    440               
 PUT $640:      0                     ,   CALL $640:    474               
 PUT $650:      5                     ,   CALL $650:  3,075 ###           
 PUT $660:      0                     ,   CALL $660:    552 #             
 PUT $670:      0                     ,   CALL $670:    834 #             
 PUT $680:      2                     ,   CALL $680: 14,886 ###############
 PUT $690:      0                     ,   CALL $690:    640 #

I believe the current downwards (and upwards) volatility is already an effect of the delta-hedging 'attractor' property that those clusters of deep out of the money PUT options generate: when the price gaps down significantly (like it did after the P&D report), the probability of those PUT options moving in the money increases - which generates automatic delta-hedging shorting of $TSLA.

Even if the probability of the $200-$300 puts increased only by 20% on average on the violent move to $300, it's still ~130K PUT options, which maps to 13 million $TSLA shares - so the delta hedging alone would be an additional shorting of 2.6 million shares (!), which was probably a significant force in the drop and magnified volatility.

Conversely, the CALL interest in the $300-$400 range is significant as well, so a sharp move down also generated a lot of sales of $TSLA market maker inventory - another million shares or so.

So I'd expect further volatility up to and including the 18th (next Friday), in both directions.

After that volatility should decrease significantly - up to the March 15 and the June 21 expiries which are 'volatility focus points' again. (But nowhere near the volatility effect of January 18th)

 

[Fact Checking]

Today's 8-hour flat-liner from 12pm on is the smoothest stretch I've seen since first tracking TSLA.

BTW., trading volume towards the end of the day was pretty healthy - i.e. there were both big sellers and big buyers compressing the price into a narrow range. This is usually (but not always) a sign of a strong breakout, as stop orders accumulate on both sides of the narrow range.

 

[Analyst007]

Please TSLA I need a new gucci bag for my wife.

 

[Fact Checking]

OT:

The greater respect for the individual's rights and property is precisely the reason why e.g. Germany has such a problem getting its wind turbine generated power from the North to its industries in the South.

There's a technological solution: boring a ~600 km tunnel from the north to the south and routing power through that.

It's a superior technological solution:

• it doesn't mess up the skyline and doesn't trigger NIMBY resistance from locals,
  
• if it goes deep enough it gets a public way of right and has very little environmental impact, making permits a lot cheaper and faster,
  
• doesn't kill birds,
• isn't susceptible to bad weather such as high wind, wildfire, lightning or ice accumulation,
• is militarily easier to defend (a tunnel 10-100m below the surface is a lot harder to bomb),
  
• could use a lot higher voltages than current transmission lines - reducing transmission losses.

I know of a rather boring company that has already built a test-tunnel for a cost of about $6m per kilometer.

600 km raw boring cost would be around 4 billion dollars - super, super cheap for such a transmission line. (Paging @KarenRei and @neroden.)

 

[Fact Checking]

Adjusted forecast since then of course talk about 150GWh of pack production. It's the 20,000 reported employees needed to get there that's the problem as much discussed.

Note that automation at the Gigafactory has been improved last year significantly: the Panasonic side can now fill 3 times more cells on the same production line factory footprint with roughly the same number of employees. They increased production from ~18 GWh/year to the current ~28 GWh/year (~+60%) with a comparatively small increase in the employee count.

Similar efficiency improvements have been cited for the "Grohmann machines" that assemble the battery packs - one of which is fully working, another under construction.

So I believe most of the 20,000 employees planned for the Gigafactory will be for vehicle assembly: Tesla Model Y and Tesla Semi trucks. I know that @neroden and @KarenRei is worried about the tight labor market in Nevada: I believe once actual cars are made there's going to be a significant influx of capable young (and not so young) people from the Rust Belt to Nevada ... There's actual, real, significant upwards mobility at Tesla for blue collar jobs, combined with equity compensation for all employees, which is comparably rare in the U.S.

Elon needs to upgrade his messaging about the housing they are going to provide. I got the impression that it's going to be high-quality housing and the messaging should match that.

 

[Fact Checking]

Semi-OT, Brexit outcome will determine $TSLA sentiment for February-March - starting with a market panic after the January 14th UK vote that is going to reject the 2018 EU agreement:

For brexit, I actually believe the soft exit is worst economically. A hard brexit will allow Britain to rapidly renegotiate all treaties.

That's one of the big misconceptions about Brexit: that bilateral treaties will 'solve' the problem. They won't - and that's one of the reasons why the UK hasn't been re-negotiating treaties in the last 2 years to prepare for Brexit!

The biggest damage from Brexit is losing automatic access to the European Single Market, including the shared financial markets. No amount of bilateral agreements are going to solve that - and any sort of customs barrier is going to hurt just-in-time manufacturing flows via mandatory customs delays for which the UK has no capacity at the moment. For example even if the UK has a bilateral agreement with France, France is obligated by EU rules to protect the EU single market, i.e. customs checks are mandatory for all goods that enter the EU from the UK. Only an agreement with the EU can remove these delays and expenses.

With Brexit the UK is falling back to the trade position that a second/third-tier location like Turkey has, but with the additional disadvantage of high costs of living and high labor costs. After Brexit both UK cost of living and wages will have to drop significantly for the UK to become competitive. (Read: UK recession.)

In that sense a hard Brexit ('no deal' outcome) will be the most damaging economically (to the UK - the EU will manage), because it will immediately erect trade barriers with only a few months of reprieve after March 29 (and totally at the discretion of the EU). With the '2018 deal' the damage is delayed by about two years - but will be still just as damaging in 2020.

So it's going to be a cluster-sugar with or without bilateral trade agreements, and most of the past few months of UK politics has been about positioning to shift the blame to others for the inevitable Brexit fallout that is going to be hugely negative...

Remember: a big motivation behind Brexit was Murdoch's desire to evade European anti-trust rules regarding concentrated media ownership. This is why Fleet Street tabloids have been spewing anti-EU agitprop for years to poison the UK electorate's opinion about the EU. The Murdochs don't give a flying sugar about trade barriers - it's not their business.

 

[SPadival]

At the China gigafactory ground breaking event, Elon was not able to resist his urge and danced.

This is bullish af. We know the numbers are gonna be good - however, theres one caveat:

The "analyst" have engineered a delivery miss headline by filling in unrealistically optimistic estimate and tsla tanked 10%.

Even more bullish is the fact that Grimez is still with him despite media efforts to split them, with the Banks shitshow and then calling her an ex-girlfriend (even now) without any official confirmation.

You just have read the Rolling Stone interview to understand that Elon hates sleeping alone more than sleeping at the factory

Elon Musk: Inventor’s Plans for Outer Space, Cars, Finding Love – Rolling Stone

 

[X Fan]

Walking through town square in Adelaide Au and I got my Tesla fix today.

 

[BioSehnsucht]

OT:



There's a technological solution: boring a ~600 km tunnel from the north to the south and routing power through that.

It's a superior technological solution:

• it doesn't mess up the skyline and doesn't trigger NIMBY resistance from locals,
  
• if it goes deep enough it gets a public way of right and has very little environmental impact, making permits a lot cheaper and faster,
  
• doesn't kill birds,
• isn't susceptible to bad weather such as high wind, wildfire, lightning or ice accumulation,
• is militarily easier to defend (a tunnel 10-100m below the surface is a lot harder to bomb),
  
• could use a lot higher voltages than current transmission lines - reducing transmission losses.

I know of a rather boring company that has already built a test-tunnel for a cost of about $6m per kilometer.

600 km raw boring cost would be around 4 billion dollars - super, super cheap for such a transmission line. (Paging @KarenRei and @neroden.)

Possible counterpoints to tunneled HVDC (or HVAC) lines : that's a lot of tunnel to keep dry, and insulation requirements may be higher (vs just having wires up in the air far from anything) to prevent arc-over? Neither is unsolvable and with cheap enough tunneling probably it's the most cost effective solution ...

 

[JollyRoger]

Any predictions for the day?

I'm going for a dip to start, maybe as low as 322, with resistance around that mark then backup to to test the 335.5 again.

This is due to trumps wall speech and the China trade deal ongoing.

This is not advice as its plucked directly out of thin air!!

Any one else care to guess on today's volatility?

 

[Fact Checking]

OT:

Possible counterpoints to tunneled HVDC (or HVAC) lines : that's a lot of tunnel to keep dry, and insulation requirements may be higher (vs just having wires up in the air far from anything) to prevent arc-over? Neither is unsolvable and with cheap enough tunneling probably it's the most cost effective solution ...

I'd expect:

• The cables themselves to be insulated and encapsulated in plastic (including the gap between them) - i.e. they'd be designed to be completely arc free even if a section of the tunnel is completely submerged in water. Since there's no UV damage underground the expected life time of the plastic encapsulation would be several decades.
  
• I'd also expect the tunnel to be segmented, with regular 'walls' separating the sections. Each segment is designed to be able to be fully submerged yet functional.

Arc gap (in air) should be fine. If this calculator is accurate:

High Voltage Arc Gap Calculator​

Then minimum arc distance for 1 MeV DC is about 15 cm - so the 4.2 meter Boring tunnel diameter should be more than enough - assuming proper plastic encapsulation of the cables.

Additional notes:

• Dedicated utility tunnels are so well protected that in principle it would also be possible to eventually lay superconducting lines, which would allow transfer at much lower voltages as well:
  • World's first superconducting power line paves the way for billions of dollars in savings, more nuclear power stations - ExtremeTech
• With such low tunneling costs it would also make sense to eventually build redundancy into the system: 3 parallel tunnels at a healthy distance from each other (~1 km), one of which tunnels can always be taken down for maintenance/upgrades.
• I'm sure better power distribution topologies are possible as well once low tunneling cost materializes. New industrial complexes could be approached with utility tunnels, from the nearest (underground) power distribution point.

Hiding all power lines underground is what is done in modern communities anyway.

 

[MXWing]

Please TSLA I need a new gucci bag for my wife.

Why? Her husband is all the coochie bag she needs.

 

[Fact Checking]

Any predictions for the day?

Nasdaq futures are looking good so far (+0.5%), Dow futures +0.5% as well.

The China talks were concluded earlier today - and absent bigger news I suspect leaks about the distance between the negotiation positions is going to determine sentiment for the trading day.

In terms of $TSLA there's been the usual FUD-fest regarding the lawsuit. Elon is in Beijing and might be meeting important people (or not), and that could feed some $TSLA specific price action during the day as well.

 

[MXWing]

In terms of $TSLA there's been the usual FUD-fest regarding the lawsuit.

"The National Transportation Safety Board's preliminary crash report says Tesla's restraints control module measured Barrett Riley's speed at 116 mph on Seabreeze Boulevard (30 mph speed limit with a 25 mph left-hand curve) three seconds before the crash, 108 mph two seconds before the crash and 86 mph when air bags deployed."

Wonder if Tesla can countersue for additional Q1 revenue?

Groundless, frivolous and nuisance lawsuit.

 

[Fact Checking]

Wonder if Tesla can countersue for additional Q1 revenue?

Groundless, frivolous and nuisance lawsuit.

Tesla should probably not talk about the lawsuit unless it gets much more prominence.

There's no good way to make public statements where young people died in a horrible way and families are grieving - and pretty much any statement would be spun against Tesla anyway.

 

[MXWing]

Tesla should probably not talk about the lawsuit unless it gets much more prominence.

There's no good way to make public statements where young people died in a horrible way and families are grieving - and pretty much any statement would be spun against Tesla anyway.

I can say how I really feel because I’m not in the court room.

I agree. Question is if Tesla should settle and make this go away or fight.

 

[mutle]

Got a call from Tesla this morning to confirm delivery location, financing options (seems even leasing is available), referral code etc. on my EU P3D order. Seems they're still aiming for mid-February to early March and confirmed that my car is among the first to be delivered.

 

[geneclean55]

Semi-OT, Brexit outcome will determine $TSLA sentiment for February-March - starting with a market panic after the January 14th UK vote that is going to reject the 2018 EU agreement:



That's one of the big misconceptions about Brexit: that bilateral treaties will 'solve' the problem. They won't - and that's one of the reasons why the UK hasn't been re-negotiating treaties in the last 2 years to prepare for Brexit!

The biggest damage from Brexit is losing automatic access to the European Single Market, including the shared financial markets. No amount of bilateral agreements are going to solve that - and any sort of customs barrier is going to hurt just-in-time manufacturing flows via mandatory customs delays for which the UK has no capacity at the moment. For example even if the UK has a bilateral agreement with France, France is obligated by EU rules to protect the EU single market, i.e. customs checks are mandatory for all goods that enter the EU from the UK. Only an agreement with the EU can remove these delays and expenses.

With Brexit the UK is falling back to the trade position that a second/third-tier location like Turkey has, but with the additional disadvantage of high costs of living and high labor costs. After Brexit both UK cost of living and wages will have to drop significantly for the UK to become competitive. (Read: UK recession.)

In that sense a hard Brexit ('no deal' outcome) will be the most damaging economically (to the UK - the EU will manage), because it will immediately erect trade barriers with only a few months of reprieve after March 29 (and totally at the discretion of the EU). With the '2018 deal' the damage is delayed by about two years - but will be still just as damaging in 2020.

So it's going to be a cluster-sugar with or without bilateral trade agreements, and most of the past few months of UK politics has been about positioning to shift the blame to others for the inevitable Brexit fallout that is going to be hugely negative...

Remember: a big motivation behind Brexit was Murdoch's desire to evade European anti-trust rules regarding concentrated media ownership. This is why Fleet Street tabloids have been spewing anti-EU agitprop for years to poison the UK electorate's opinion about the EU. The Murdochs don't give a flying sugar about trade barriers - it's not their business.

I am beginning to think you had a Brit swoop in and steal a former lover of yours at one point
I guess we could run a street poll in ooh say France or Italy and ask what people thoughts are on the EU ..