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

[Steve m]

Inside the S&P 500: An Active Committee | S&P Dow Jones Indices

Some insight into the S&P 500 selection committee.

 

[M|S|M MYP]

"Stay" as they say in Blackjack. I don't care if the dealer's showing 14 and I'm "supposed" to hit.

So you don't double down if you have 11?

 

[Tslynk67]

My guess...
Several things.

First, general overall economic worries (macros are down).

Secondly and maybe more so... traders vs investors running low on patience.
Most thought S&P inclusion would have happened by now. I admit, so did I.

Yes, yes, no.

Looking at previous cases it's 1-2 weeks before the sleepy folks at the S&P make a decision. Given that the 10-Q was on Monday, an announcement today would be sprightly, to say the least.

Plus I think that great things are afoot, in the bowels of the Earth to facilitate things, and that take a little more time too.

Disregard the fact that a blind bat could have seen this coming for, well the last year, TBH, but that's stuffy old mens-club rules for you.

For my part, I gave up. I have a couple of calls for 14/8, could lose $13k there if they expire, but meh, it's only money, and I knew the risk.

 

[Tslynk67]

Closing a position is what matters, whether you do so by "buying" or "selling" doesn't matter. The question is did you make money on the trade once the position was closed, or lose it?

If you made money, you owe taxes immediately for that year.

If you lost money, you would of course expect to be able to deduct it from your gains for that year, but this is not always true because of the Wash Rule. If you opened a "similar" position within +/- 30 days, that loss gets attached to the new position. And as you might imagine, if your new position is not closed until the subsequent calendar year, your first loss can't be claimed until then.

This is pretty simple to understand with plain shares. Let's say you bought 100 TSLA shares at an ATH, sold them for a loss because a stop loss triggered on a huge dip, but then you bought back lower (within 30 days). That original loss is attached to your new buy, and you don't get to deduct it from your gains until those new shares are sold.

The rule is easy to understand when it comes to shares, but "similar security" gets nebulous and complicated when considering options, and this is why it's probably best to consult a tax professional. My own understanding (and a conservative or "safe" one) is that it is best to look at securities as "upside" or "downside". If you will profit from the same directional move in share price, it will wash. Shares, buying calls, selling puts (in the same ticker) all would wash. Likewise, shorting, selling calls and buying puts all would wash. So in your example above, if your loss is from selling a call (a trade that profits on the downside), then it would be advisable not to sell another call, buy a put, or short the stock within +/- 30 days of the date you close that short ITM call. Otherwise your loss may get washed to the next calendar year (or beyond).

Again, you will find variation on what is considered "similar security." Probably most important is the interpretation of your brokerage, who will prepare your tax documents. Some folks think for an option to wash, it has to be the same type, strike, and date. The most conservative (and safest, from a tax violation perspective) view is the upside/downside view I explained above.

By the way, another complication is that this applies across all your accounts. So even if you suffer a loss in your taxable account, but make a washable trade in a retirement account with another brokerage, you shouldn't be taking that loss. A potential example would be losing money on buying and closing a call, but then turning around and adding to your share count in your retirement account within 30 days. I'm sure this happens A LOT and not accounted for 100% correctly due to ambiguities in the rule.

Well, it's one crappy day when the most interesting post is about taxes on selling... And I don't even live in 'Murica

 

[dl003]

Macros are recovering, probably on news that the WH and GOP are more willing to cut a deal. Let's see where we're going in this last hour.

 

[smorgasbord]

My guess...
Several things.

First, general overall economic worries (macros are down).

Secondly and maybe more so... traders vs investors running low on patience.
Most thought S&P inclusion would have happened by now. I admit, so did I.

Most? I don't believe so. We all knew it would have to wait until the 10-Q, and that was just a few days ago. Many have been talking Sept, some Aug. They could even drag it out until later.

 

[SOULPEDL]

Yes, yes, no.

Looking at previous cases it's 1-2 weeks before the sleepy folks at the S&P make a decision. Given that the 10-Q was on Monday, an announcement today would be sprightly, to say the least.

Plus I think that great things are afoot, in the bowels of the Earth to facilitate things, and that take a little more time too.

Disregard the fact that a blind bat could have seen this coming for, well the last year, TBH, but that's stuffy old mens-club rules for you.

For my part, I gave up. I have a couple of calls for 14/8, could lose $13k there if they expire, but meh, it's only money, and I knew the risk.

My last purchase was $1,437 (a share, nonetheless) and here we are again. I will buy more possibly in the 13's, depending on macros (which reveal nothing really).

 

[Krugerrand]

So you don't double down if you have 11?

Not unless a bunch of face cards are coming. And it depends who else is sitting at the table.

 

[wipster]

Walmart?

(Finger hovering over ignore button...)

Wal Marche'

 

[CorneliusXX]

Ha! No! Sorry about that - it's beyond the editing window.

Thanks. I was confused and thought it was some sort of parable i wasn't smart enough to figure out.

 

[CLK350]

I *really* want / should* add to my positions, except from where .. getting cash advances @ 8-14%, IF I had really strong convictions, shouldn't hesitate, but I do. Come Monday or Oct 1st I may regret not jumping in now.

What are the real risks - General macros crushing everything down? Thinking out loud now - what would Jesse L do .. what can I do to min losses also .. alright - will go and consult my trusted advisor

.. he said: no worries, it may still go down further, just get ready - from past records you tend to over trade

 

[CarlS]

Thanks!
Say on Dec 1 2020, if I close a long OTM call and realize $200k gain, and close a short ITM call and realize $150k loss, I will only need to pay tax on the $50k net gain? Is this considered wash sale? (Close a long call means sell a call that I already have, to technically it is a sell, not “buy” as defined in wash sale rule, is that correct?)

I don't understand the logic. I'd rather pay taxes on $200k gain, than only gain $50k (and pay taxes on that). What am I missing?

 

[M|S|M MYP]

I *really* want / should* add to my positions, except from where .. getting cash advances @ 8-14%, IF I had really strong convictions, shouldn't hesitate, but I do. Come Monday or Oct 1st I may regret not jumping in now.

What are the real risks - General macros crushing everything down? Thinking out loud now - what would Jesse L do .. what can I do to min losses also .. alright - will go and consult my trusted advisor


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.. he said: no worries, it may still go down further, just get ready - from past records you tend to over trade

You only lose if you sell....TSLA is a long term play. The saying 'dont put in what you can't afford to lose' is pretty solid advice when trading this stock.

 

[SOULPEDL]

If S&P makes an announcement relating to the S&P 500


Most? I don't believe so. We all knew it would have to wait until the 10-Q, and that was just 3 days ago. Many have been talking Sept, some Aug. They could even drag it out until later.

I'm assuming that they are waiting (or pushing) for a better price. What's the number you think they can swallow or "afford"? I bet this is where technical charts could come in. They have to be asking the same thing... where's the bottom (or how low can they realistically push it down before Battery Day)?

There was a date thrown around here regarding in 7 weeks the S&P board needed to reallocate funds (don't quote me here, could be 6 now) and would likely be the last date for inclusion if actually they do it.
Is it a coincidence that Tesla pushed out Battery Day to the same time period? I wonder how those 2 dates line up exactly, and did Tesla take this into account when choosing the new Sept date?

 

[capster]

He'll get offered a job at a cybersecurity company or the gov't. They'll hail this guy a genius!

Maybe one of those "Do it or else and if you get caught we don’t know you" kind of gigs?

Then he gets a book and a movie?

 

[M|S|M MYP]

Maybe one of those "Do it or else and if you get caught we don’t know you" kind of gigs?

Then he gets a book and a movie?

All the fraudsters get a movie and book deal --- Jordan Belfort, Frank Abagnale....Where else in this world can you commit a crime and make millions and then do your time and get a movie and book deal and make millions more!

 

[M|S|M MYP]

Can someone push the 'easy' button and notify the powers that be that they have 35 minutes left for TSLA to close at $1500 please?

 

[SOULPEDL]

Low volume again today. Too easy to push it down further.
Where are my longs?

 

[viridi]

Noticing big time capping this afternoon, especially since right before 3:00 p.m. EST. Big sell orders getting put in and then pulled as we approach and then get comfortably below certain levels.

 

[Curt Renz]

Can someone push the 'easy' button and notify the powers that be that they have 35 minutes left for TSLA to close at $1500 please?

Well it is a weekly options expiration day. The big options writers (mainly hedge funds and market makers) would like to shut out as many options owners as possible. Manipulating the share price has costs, but their hope is that being able to keep the premiums of expiring options will more than make up for that. Any short sales from that process today can be covered on Monday, but the trading of July 31 options ends today.

A cursory survey makes it appear that $1450 should be the ideal target for the manipulators, which they have overshot to the downside. Getting back up to $1450 in the remaining half hour of trading could be tough, but it will be interesting to watch.