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

[Hock1]

Thank you for pointing out this important aspect of Regulation SHO. It explains how Market Makers (MMs) were able to drive the SP down over $120 on Wed/Thu even with the "uptick rule" in effect. This drop is unprecedented in trading history for TSLA, and occurred when investors were supposed to be protected by the SEC "uptick rule". Instead, MMs exploited their priviledged position in the Market to defraud investors.

Tue/Thu was not "Bona fide market making"; instead it was a bear raid conducted by the actual Market Makers. Neither was this "providing liquidity for a low volume stock" when few sellers were available. There were lots of sellers at $965 SP. No, this was actual FWAUD conducted by the MMs.

It remains to be seen what Securities Investigators in Germany will do about the Pre-Market price manipulations at one of the two German stock exchanges (Xetra). Paging @Fact Checking if you know more.

It has happened before. In this example from May 2013, lawyers acting for Goldman accidentally released an unredacted document revealing compromising internal discussions regarding naked short selling:

"Now, however, through the magic of this unredacted document, the public will be able to see for itself what the banks’ attitudes are not just toward the "mythical" practice of naked short selling (hint: they volubly confess to the activity, in writing), but toward regulations and laws in general.

"Fcuk the compliance area – procedures, schmecedures," chirps Peter Melz, former president of Merrill Lynch Professional Clearing Corp. (a.k.a. Merrill Pro), when a subordinate worries about the company failing to comply with the rules governing short sales.​

Info: @Hock1 @UncaNed @Right_Said_Fred

It also confirms something that I discussed here on TMC last week: most retail shorts were squeezed out in heavy Pre-Market trading during the final week of January 2020, and now the only Shortzes left are in fact certain Market Makers who are also large investment bankers.

This is an ominous development for the likes of UBS, GoldmanSachs, and MorganStanley, and all other investment banks that qualify for the Market Maker's Short Selling exemption, and have suspiciously low price targets and a 'Sell' rating for TSLA.

The SEC must investigate now. This is a market-confidence shaking revelation.

Thank-you again for your insight. Investors appreciate your help.

Regards,
Lodger

I have said all along that the level of criminality that these manipulators will ascend to is directly proportional to their level of financial pain. That's what that action in Germany, and later in the U.S. was all about. Shorts are losing a lot of money. Their brokers are losing a lot also as their fees for share-lending dwindle and their asset management fees lessen.

AD..Many thanks to you and others here who are exposing the largest financial crime ever perpetrated against the investing public. Not a day has gone by, in the last 12-15 years, that I haven't seethed about what has happened to our markets. I've been telling everyone who will listen about this travesty. I wish I could say that I'm hopeful that the SEC will do its job. All appearances indicate that they are complicit. What I am heartened about is the fact that many people on this board now understand. The more people who know and understand the facts, the greater possibility of something being done, eventually.

 

[CanadaEV]

That's an excellent learning on how markets are manipulated. But I have mixed feelings on how it impacted Tesla. Let me explain.

First of all, I dumped all my call options on Wednesday. They lost half (or more) of their value from Tuesday's peak (but were still up around 20-30X). So this manipulation was a HUGE loss of profit potential for me. I could buy the late Feb. 2020's back for less right now but I don't want to. Market makers cut potential losses in half or more, a huge savings for the bastards.

But, for those TSLA investors who are only long TSLA, this is making a "prettier" long-term chart with less volatility than it would have had if there was no manipulation using the "Madoff" rule. The run past $900 was largely based on the underwriters of the options needing shares to hedge their losses. So it probably would have run to $1100 (or higher) before crashing back down. That does not make a "pretty" chart.

In the long-term, the manipulations now do not impact the value of the shares down the road. They will settle into a valuation based upon projected growth rates, margins and potential size of the market. So while I hate the manipulations and believe in transparent markets, it mostly impacts the short term. It's greedy people manipulating for their own benefit. But I like that it's smoothing out the price action. The fact that options underwriters mispriced the options and found themselves in a bind can disrupt the normal functioning of markets. Ideally, they wouldn't misprice the options to begin with (but then our profit potential would be much less). The options markets introduce price volatility in the underlying shares that otherwise wouldn't be there. This manipulation was the "solution" to that. I'm not saying it was a good or proper solution, just that it did solve their problem (which wouldn't have existed if they didn't misprice the options to begin with). They should have had to pay the price for their mispricing. What this illustrates is those playing the game at the highest levels, the market makers, actually don't know what they are doing. But that they can hack together a corrupt solution to "fix" their gross negligence.

All I'm saying is the manipulations reduced the impact of the options mispricing on the underlying shares which is actually a net positive for those only long TSLA (for the long-term). And, what a "pretty" chart it's shaping up to be!

That is an interestingly objective reflection on what happened.
As much as I abhor the SEC empowering MMs to corrupt the market, in this case I agree that the outcome could on balance be beneficial for longs who have a positive commitment to the company.

 

[SageBrush]

It appears to me (as someone that is not knowledgeable in this field) that Fridman is more of an 'academic', whereas Keller is an 'engineer' who gets things done (and I'm not trying to denigrate academics here because both academics and engineers serve an important function). Fridman is perhaps more interested in the theoretical, whereas Keller is more practical and pragmatic perhaps.

Academics do not mumble but .... humans are complicated !
as their main argument. He came off as a bit off a fool.

 

[Jack6591]

On another OT note re: your avatar picture. If that is actually you, is there any chance I can tag along on your next overland expedition to the North Pole?

That’s me, and the “Northern Lights” are on my bucket list.

P.S. Elon, if you’re listening, I would love superchargers along the Alaskan Highway.

 

[jerry33]

TSLA thoughts since 2016.

I bought in 2016, part of what I look at as the 2nd wave.

1st wave - initial nose cone buyers. Very brave both in stock and car (very few superchargers for trips)

With a bit of planning, trips were not that hard before Superchargers. We did several.

 

[mickle]

For those that can't spend 25 minutes jump to approx 21:00:

Keller: It is a computational problem. Pretty solvable. {and he goes onto give an example of speech recognition}. Speech recognition for a long time people were doing with frequency and domain analysis and stuff, that didn't get them very far. And then they tried deep learning on that, and it worked great, and it took multiple iterations. Autonomous driving is way past the frequency analysis point.
.

peach wrecked ignition hardly a solved problem. a few missed steaks could kill many if applied to full-of-self driving.


note: voice reply to message transcribed by google, excuse any typos

 

[Artful Dodger]

I tried to find the source of your data - best I found is: February 2020 Reg SHO Daily Files where I had to extract one line from each daily file and it does not have the last column you showed - Please let us know if there is a more convenient way to get them?

Yeah, you found them. There is a legal requirement for this data to be made publicly available, but the law doesn't specify it has to be EASY to get that data... Are you a bash shell scripter? mget and grep are ur friends.

The last column in my table is simply the ratio of 'shortexemptvolume' to 'shortvolume'. If you do the math in your spreadsheet, you'll see that relative 'shortexemptvolume' was at least 10x higher on Feb 04-05, 2020 than during any other similar periods (ie: "uptick rule" in effect).

Who's exempt, and what are they exempt from?

I then looked up the data around the last two times I remember the uptick rule being in place for TSLA - April 4, 2019 and July 25, 2019. I also pulled out the data for last week for comparison:

View attachment 509217

It looks like the exempt interest goes always way up if the circuit breakers are tripped - makes sense now to me as it allows them to short sell ignoring the uptick rule.

Yeah, we've never seen a day like Wed, Feb 05 before, where the "uptick rule" is in effect and the SP crumbles on 2x record volume. It's almost as if some Call Options writers were trying desparately to slip the noose of $Billion in impending payouts. Panick at the Disco.

Anybody calculate how much Options writers saved due to the drop from $968 on Tue to the end-of-week SP of $748? How many dollars were at stake? ie: crime needs a motive.

It also looks like the exempt interest slowly was creeping up last week already.
Edit: It started the day of the earnings call.
Is that a sign that:
- the MM had problems with the increasing SP and/or volume?
- manipulations started last week already?

Look at the ratios, that's the fingerprint. Since we know only MMs can sell 'shortexempt' shares, this has to be attributed to their shorting activites. However, once a MM marks down the SP with a 'shortexempt' sale, then other short sales can pile on until a higher buy price occurs. Hammering rapidly, MMs can leverage their 'shortexempt' sales to conduct vastly more shorting at below the fair value SP. We saw huge SP swings on Tue and Wed, with the SP often changing > $10 per min. I can produce a sorted table of per-minute SP changes if you're interested, just ask.

Might be interesting to watch in similar situations in the future as an early warning sign???
Like right now ...

I'd be more interested to see what happened historically during notable Media/FUD attacks like after the Joe Rogan Podcast or the 60 Minute interview. We know the 'shortexempt' provision was unneccessary due to the "uptick rule", but were there still large numbers reported for 'shortexemptvolume'?

If so, that means reported numbers for 'shortexempt' do no apply solely for short sales where MMs are exempt from the "uptick rule". Let us know what you find out.

Cheers!

 

[vwman111]

28th expiry for the $1880 calls. Just in case TSLA goes Bitcoin

Where do you find $1880 calls? my broker doesn't have them listed, and i can't see them on Yahoo Finance either.

 

[rsm287]

I'm currently watching the whole Lex Fridman podcast with Jim Keller. There's a really interesting bit at around the 26 minute mark where Keller talks about making computers faster. He mentions that at some point every few years you hit a limit where adding another feature or buffer doesn't seem to make it any faster (kind of like diminishing returns). The problem then needs to be re-thought and re-written (sometimes starting from scratch). He said that what you commonly find is that the re-write is not only faster, but half as complicated. He also said that he was in the camp of wanting to re-write more often. Sounds like he thinks that time would be better spent doing this than trying to make incremental improvements to the existing design. Kind of sounds a bit like going back to first principles again.

It occurred to me that perhaps the foundational re-write in the Tesla autopilot system (which Elon mentioned on the Third Row Podcast) might be similar in principal.....in that perhaps it pays to start from scratch and re-write every so often to increase the speed and reduce the complexity. I know nothing about this field and would be interested to hear what others more knowledgeable think.

Jump to the 26min mark and listen to what Jim Keller says here:

 

[Nurkbonis]

Charles Schwab has $1,880 2/28 calls.

Where do you find $1880 calls? my broker doesn't have them listed, and i can't see them on Yahoo Finance either.

 

[vwman111]

I actually lost just over $1 million in profit because of the dip (my short-term calls were up by $1.8 million when the SP was $960). I still made $800K profit on them by selling Wednesday morning so I am not complaining overall of course. But I wonder what could have been, especially if the SP had continued up above $1,000 like it looked like it would do. It may have ended up with $3-4 million profit.

Ditto...Up $1M on options purchased Monday, sold a small portion at the high on Tuesday afternoon, but still way down compared to the high. I kept updating my profit calculations based on the increase in the selling price. I was very naive as to the extent that the price could be manipulated. Lesson learned.

 

[Artful Dodger]

The only problem with the truck is making a plant fast enough to make the trucks and then spending 5 years catching up with demand.

Lol, luv it! Factory could be very fast to build and get into production:

• no huge Stamping press with long-lead/expensive dies
  • just waterjet the pattern on flat sheet steel
    
  • then fold 'em with an automated metal brake
  • down the line she goes like punching movie tickets
• no Body line
  • just clamp and MIG weld
  • robot vision assisted AIs do the welding
• no Paint shop
  • color SS with a varying thicknees chrome oxide layer to get:
    • blue
    • bronze
    • green
    • gold
    • purple

All that's left is final assembly, and at GF5/Houston that would be old hat for Tesla by then.

Oh, how we wants a desert camo Cybertruck... (Mordor trucker Sméagol)

Cheers!

 

[Late2theGame]

Anybody calculate how much Options writers saved due to the drop from $968 on Tue to the end-of-week SP of $748? How many dollars were at stake? ie: crime needs a motive.

Cheers!

MaxPain graph from Monday would be a very good approximation as it shows the payout over all strikes. It probably is also the best one could do as Open Interest is not available during the day anyway and end of Tuesday data might be distorted already as it is after the manipulation.

I checked Papfox's Monday post but he did not include it.
I also searched this thread for the terms 'maxpain' and max pain' but could not locate a copy of the graph.

Does anybody have one by chance?

Edit: This would only show the portion of money at stake related to this weeks options. Still nice to know

 

[Curt Renz]

MaxPain graph from Monday would be a very good approximation as it shows the payout over all strikes. It probably is also the best one could do as Open Interest is not available during the day anyway and end of Tuesday data might be distorted already as it is after the manipulation.

I checked Papfox's Monday post but he did not include it.
I also searched this thread for the terms 'maxpain' and max pain' but could not locate a copy of the graph.

Does anybody have one by chance?

Opricot Open Interest|Volume|Max Pain

 

[Creekstalker]

That’s me, and the “Northern Lights” are on my bucket list.

P.S. Elon, if you’re listening, I would love superchargers along the Alaskan Highway.

Kind of a badass-Shackletonian- late 19th century-Arctic-explorer vibe you're laying down.

And we all know not to doubt our vibes, amirite?

Yours in jealousy and baldness,

Creekstalker

 

[ggr]

MODS: Is there a way to have a facility to expand abbreviations if you hover over them or right-click? is there someone technical who could do that?

A nice feature but not one that the moderators have any input to, or influence over.

 

[jerry33]

color SS with a varying thicknees chrome oxide layer to get:

• • • blue
    • bronze
    • green
    • gold
    • purple

On bronze and gold and blue and green
Ride the Cybertruck men of fame
With no bright purple to be seen.

 

[Artful Dodger]

Imagine when SpaceX starts cranking out Starships... and even CNBC nitwits stop sneering at the Mars mission... and macho truck-buyers can buy a vehicle made of the same steel as Mars rockets.

Lol, those Space Cowboys will be able to buy an actual Mars Rover edtion Cybertruck. Elon's already said Cybertruck is the official rover for Mars.



I'm thinking the SpaceX edition will come with rocket thrusters:

"Houston, it's not a Problem!"​

Cheers!

 

[ABCTG]

Fridman sees FSD being a long way off. He is fascinated by the human/self driving vehicle relationship, which is a valid point.

Very interesting that Keller sees it in terms of "ballistics'' and being possible very soon.

For Fridman, an interesting place for him is e.g. an intersection where pedestrians and vehicle have to interact.

An example might be where there is a 4 way stop with vehicles and pedestrians wishing to proceed. (This is mainly for US roads) There may be nuances where the pedestrian and other drivers make eye contact and an agreement as to who should proceed is made.
Another example is at an intersection with traffic lights, A vehicle may be permitted to turn right on red, but the light is about to change and a pedestrian wishes to cross. Does the driver go for it? The driver has to pay attention to traffic, the light may be changing and the pedestrian is itching to cross.
Also when the light turns green, the right turning driver may again go for it, before the pedestrian begins to cross. (some cities now show the walk symbol for pedestrians for 1 or 2 seconds before the light turns green.) These are examples of vehicle/human interaction, but I believe adjustments can be made to crossings to cater for both.

Now, believe it or not, I would suggest that while a majority of people prefer to be in their own vehicles, they really don't enjoy driving.
I look at the 5 ladies who work in the clerical area at the doctors office. Do any of them look forward to driving to and from work, or is it a necessity that they deal with?
I see people in their 7 year old Toyota Corolla driving along the crowded streets at rush hour, driving because they have to. Their vehicle is a lowest cost as possible utility that takes them from A to B.
There are people who will get in the right lane 9 miles before they turn right because they would rather be stuck behind a slow moving bus than have to change lanes.
All of these people would be extremely happy to get in a Full Self Driving Vehicle that takes them from A to B.

Would they even care that the FSD vehicle might be a little bit slower?

The owners of the FSD vehicle may find that the vehicle gets stuck in some areas, but they would learn to just avoid those areas in the future.

I think FSD is close, and humans will readily learn how to interact with FSD vehicles whenever necessary.

 

[sparcs]

LOL, Papa Musk is partying:

View attachment 509281​

Spoiler: What you probably didn't notice.

Check out Elon's shoes ...

Also, WSB's take on it:

TESLA TO THE MOON! Papi musk wearing the “cybershoes”, gonna sell more than Jordans : wallstreetbets
​

someone did a pretty good job. here's the original: https://media.vanityfair.com/photos/5bc620c0cb0c9b2d91a39584/master/w_2560,c_limit/elon-musk-grimes-pumpkin-patch.jpg