-
Want to remove ads? Register an account and login to see fewer ads, and become a Supporting Member to remove almost all ads.
Tesla, TSLA & the Investment World: the Perpetual Investors' Roundtable
- Thread starter AudubonB
- Start date
jhm
Well-Known Member
The next time the US Federal Government has to bail out US automakers, Tesla could be strong-armed into acquiring one of them. We don't really want these companies to go bankrupt.
Much discussed already. It's being described as a Lunar New Year promotion. More realistically, it's a "mandatory option", since Chinese Model 3 prices are higher than in the US, even accounting for the tariff and shipping.
I opened a spread several days ago, then bought it back the same day for a 35% profit.Basically got a free call out of it. So I'm in a position to open a spread again.
These are ITM calls. Well, used to be quite ITM... not so much any more :Þ (22 Feb $300s). So theta isn't the biggest concern, it's losing the intrinsic value.
If the stock had been like it was a few days ago, I'd have sold calls ($345-$360 range) and use that to fund a narrow ($5-10 wide) put spread (<=$300) But now the options look far less appealing.
My concerns are that there's supposed to be a commerce department report next week involving a recommendation as to whether to increase tariffs on cars from the EU. Trump would have 90 days to react to it. If he were to choose to do so, the EU already has retaliatory tariffs planned, which would surely bite Tesla hard. Fear of this should result in a significant stock hit.
On the other hand, if there's no recommendation, or a recommendation against tariffs, or a clear sign that a deal will be struck (the EU is offering up the complete elimination of its auto tariff), this would be a huge boost for Tesla. But it seems the less likely possibility.
If you hold shares, why not just sell OTM calls for a month-out, every month and collect premium?
IV is high enough to be money making.
stef
Member
Rumor starting on twitter that AP for model 3 is now certified in Europe. Only 1 tweet 10 minutes ago (timing seems to match) in my feed for now, let’s see if it takes off or gets confirmed
shlokavica22
Member
I opened a spread several days ago, then bought it back the same day for a 35% profit.
These are ITM calls. Well, used to be quite ITM... not so much any more :Þ (22 Feb $300s). So theta isn't the biggest concern, it's losing the intrinsic value.
If the stock had been like it was a few days ago, I'd have sold calls ($345-$360 range) and use that to fund a narrow ($5-10 wide) put spread (<=$300) But now the options look far less appealing.
It isn't- until it is. Sadly we are less than 10$ from that point.
Good job on the spread play
What is the free call that you ended up with?I like to do call spreads at least 6 months further away. When the stock/IV drops significantly I buy back portions of the "tail". Eventually I end up with call bet for reduced price.
shlokavica22
Member
The reality is often different than what we want.
The current cash cow for the US automakers are trucks. Remove them from the equation and you get bankruptcy.
So if you are a F/GM executive and you look what TSLA does to BMW/Daimler market share (in particular), it becomes very clear that you are on borrowed time. Reaching to TSLA and hope some partnership can arise from that is probably the best bet for them.
Tesla might buy some plans here and there, but it makes almost no sense for them to acquire whole company (F/GM).
@shlokavica22 When I can deleverage enough to focus more on more distant expiries, I plan to do exactly that more often I have some distant calls that I've done that with already, but for now I'm stuck on the shorter term (mainly 22 feb - 15 apr), just trying to keep up with good roll opportunities. While I've had interest in spreads for a long time, it wasn't practical before I enabled margin on my account, as IB wouldn't let you cover calls with other calls (aka, spreads) unless you have margin enabled.
BTW, just found this:
Subscribe to read | Financial Times
Key part:
So this report should be more of a "fear amplifier" than a "fear trigger". 3 months to strike a deal isn't actually that bad for Tesla, because - as mentioned previously - that's three months to flood Europe with cars as fast as they can, and 3 months to get their prices down.
I have some distant calls that I've done that with already, but for now I'm stuck on the shorter term (mainly 22 feb - 15 apr), just trying to keep up with good roll opportunities. While I've had interest in spreads for a long time, it wasn't practical before I enabled margin on my account, as IB wouldn't let you cover calls with other calls (aka, spreads) unless you have margin enabled.BTW, just found this:
Subscribe to read | Financial Times
Key part:
So this report should be more of a "fear amplifier" than a "fear trigger". 3 months to strike a deal isn't actually that bad for Tesla, because - as mentioned previously - that's three months to flood Europe with cars as fast as they can, and 3 months to get their prices down.
EVNow
Well-Known Member
Pre-Market Nasdaq futures in down 0.85%. Not looking good. Tesla is only 0.2% down - but that doesn't mean much.
@shlokavica22 When I can deleverage enough to focus more on more distant expiries, I plan to do exactly that more often
BTW, just found this:
Subscribe to read | Financial Times
Key part:
So this report should be more of a "fear amplifier" than a "fear trigger". 3 months to strike a deal isn't actually that bad for Tesla, because - as mentioned previously - that's three months to flood Europe with cars as fast as they can, and 3 months to get their prices down.
Why don't you enable margin?
shlokavica22
Member
I did. Which is why I can do spreads now
I was explaining why I wasn't able to do them in the past.I was hesitant for a while because I didn't want to get myself in trouble with it. But I realized that I was harming my investments by missing out on what margin enabled, so I just try to use it responsibly, keeping it paid down.
sundaymorning
Active Member
I believe China trade headlines is the main centerpiece that drives the market now. The trump administration and China needs another extension, perhaps an incremental raise from 10% to 15% after March 1st, giving both sides more time to iron things out. This may calm the markets a bit but at this point a deal isn’t going to happen in time. Tread lightly.
Look at 3+X3 sales numbers (etc) and you'll see that BMW's sales numbers are fine, it's just that sales have flipped from sedans to crossovers.
The concern for them is what happen if Tesla is able to survive and deliver the Model Y, which would directly attack the crossover market.
If the Trump administration decided to impose a punitive tariff on cars from the EU, and the EU responded in kind, that would really kill Tesla since it's depending in part on the European market for sales of the Model 3. I'd hope that the EU would exempt BEVs, just to spite the Trump administration, but given the potential of the Model 3 and Model Y in European markets, I'm sure that the EU would be happy to allow Tesla to be killed.
The car is fully certified for sale.
They can sell as many as they wish.
Here's example of a car that's NOT FULLY certified for sale - it's LIMITED sales only:
Koenigsegg Agera RS1
25:17 direct link - the reason is "small volume exemption":
Krugerrand
Meow
The TCO models I built before I bought my Model S in 2013 included my comparative fuel costs over the 6 years of the loan duration. I was replacing a mid-size SUV that got 19MPG on average. I looked to save something like $32K in fuel costs based on my driving habits and $3/gal gasoline (it was over that at the time).
I also knew I'd likely keep the car longer than 6 years.
Last edited:
Similar threads
- Locked
- Locked
- Locked
