Technically we'd be half way to 5 figures (pre-split) if we reach 4 figures (post split).
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Tesla, TSLA & the Investment World: the Perpetual Investors' Roundtable
- Thread starter AudubonB
- Start date
I have ~99% of my trading account in ITM LEAPS. IMHO, ITM LEAPS offer a great tradeoff between risk and potential reward (i.e., I sleep well at night rationalizing a low theta burn, comparably low premium for IV, expiry relatively distant in the future all combine into a rather low risk of losing all my money -- plus if something goes wrong, I can still roll out). Generally, I'm trying to lever up when the stock price is low, and lever down when the stock price is "high" (unfortunately I don't have a systematic way so going by my gut). This LEAP-centric strategy has allowed me to go ~23x since Feb.
My core LEAP position (which is not LEAP anymore however) right now is Sep '21 400 CALLs. This is already pretty aggressive for my taste with "pretty close" at the money and a "pretty soon" expiration; my plan is lever down before or after FY20 earnings, depending on whether I'll believe we have a buy the rumor type of development before the release or not.
Generally, I try to accomplish 1.5x to maximum 2x leverage compared to common stock. I found that this offers the best risk/reward ratio for my personal taste (plus I have to pay taxes on these trades so I need to achieve at least 1.3x vs. common stock for this to make sense -- in Switzerland you don't pay capital gains tax as long as you don't qualify as professional trader, i.e. it's tax-free if you just HODL common stock but not when you trade/long-term own options).
Do you have any specific questions?
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Artful Dodger
"Neko no me"
Yes. His assumption is since Tim Cook turned down Elon Musk with the offer to acquire Tesla for 1/10 today’s value, why would he be interested now?
that’s a valid point.
or he might have come to his senses, abandon all the dividends pay,ent to the AAPL shareholders and plow in billions into an industry Apple has no expertise whatsoever. However, that would still be good for EV development and adoption overall.
Indeed. The recent Reuters Apple EV article quoted only anonymous sources. The same was the case with the almost identical WSJ article in 2015. Both reported that management would not comment. Both predicted production within four years.
I suspect that the anonymous sources were Apple engineers who stay with their jobs because management keeps feeding them the line that production may be only four years out. Anti-Tesla entities may have pushed (or paid) Reuters to recycle an Apple EV rumor shortly after Tesla entered the S&P 500. That allowed the media and YouTubers to excitedly publish clickbait articles and videos, since both Apple and Tesla are attention grabbers. The media frenzy may have temporarily capped TSLA prior to today's options expirations.
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Here's the main reason why Apple wants to get into the low-profit car business, according to Goldman Sachs
Here's the main reason why Apple wants to get into the low-profit car business, according to Goldman Sachs
- Markets Insider
"We believe that a car makes sense for Apple as a hardware platform supporting its services but the lower profitability of the auto business likely means that investors would see limited earnings impact from such a move," Goldman explained.
...
"The main reason Apple and other tech companies want to be in this business is due to the large amount of time future consumers are likely to spend in self driving vehicles using information services as they make their way from point A to point B," Goldman said.
Here's the main reason why Apple wants to get into the low-profit car business, according to Goldman Sachs
- Markets Insider
"We believe that a car makes sense for Apple as a hardware platform supporting its services but the lower profitability of the auto business likely means that investors would see limited earnings impact from such a move," Goldman explained.
...
"The main reason Apple and other tech companies want to be in this business is due to the large amount of time future consumers are likely to spend in self driving vehicles using information services as they make their way from point A to point B," Goldman said.
It was a disappointing time for everyone. Karenrai said "I guess the shorts were right" and quit this forum for a good while after that p&d report. Rob was extremely disappointed at Tesla misleading investors by saying they were only expecting S/X to drop off slightly, not by almost 50% which shouldn't be hindered by logistic reasons. Everyone had their criticism. I find solving the money problem to be bullish no matter what which is too echo chamber for my liking. Rob is pretty balanced, and a superior version of gali when it comes to clarity. No need to hate on any of these people tho.
Only person I find annoying is Rich Rebuild.
Wasn’t some of that drop off due to reports of imminent refresh? I don’t know for sure. Anyway, no harm no foul. It just seemed like Gali really went off the deep end. They are all doing well and increasing their audience base.
And I think Karen was upset based on an option play that was a big surprise to the negative based on what was said. But again, I don’t know for sure.
Haha....”no need to hate on any of them tho.” Very next line.... “I find Rich annoying.”
I like Rich. I just take everything as sarcasm with a hint of truth. Tesla has its flaws and I’ll admit that. Makes the videos more entertaining.
woodisgood
Optimustic Pessimist
Apple, Google, Amazon, and Tesla will all be competing for people’s ride-hailing dollars and time/attention.
Each of them needs the hardware (auto manufacturing) and software (both autonomy and service/infotainment OS). Apple has yet to show its hand where the hardware comes from, but it most likely won’t be a partnership with legacy auto, who still can’t produce anything but clunky shite-boxes. My guess is they’ll ultimately invest in Lucid, much like Amazon did with Rivian. Apple’s best opportunity in this space was a potential acquisition of Tesla back in the day, but perhaps they were still thinking they were going to manufacture from the ground-up at that time. I can’t imagine they are thrilled about letting the opportunity pass them by.
Each of them needs the hardware (auto manufacturing) and software (both autonomy and service/infotainment OS). Apple has yet to show its hand where the hardware comes from, but it most likely won’t be a partnership with legacy auto, who still can’t produce anything but clunky shite-boxes. My guess is they’ll ultimately invest in Lucid, much like Amazon did with Rivian. Apple’s best opportunity in this space was a potential acquisition of Tesla back in the day, but perhaps they were still thinking they were going to manufacture from the ground-up at that time. I can’t imagine they are thrilled about letting the opportunity pass them by.
Watching all the swings and MM efforts, reading all the articles dissecting the inclusion and spike drop, and we end within a couple bucks of the pre-auction close last Fri. Good entertainment though!
Tes La Ferrari
Active Member
Do you mean that 1.5X to 2X delta as in the projected SP ?, ie. if you were buying today, and today's SP was $660, you would looking at buying $990 - $1220 strikes 2-3 years out?
I'm glad you've got it covered. I'm not sure your fallback plan works as well if you have it covered tho. Is cat. House?There is zero chance of repossession due to not paying property taxes even when they increase after I put up some buildings. I got it covered.
Yes, those same people also spread the refresh rumor. But really, the drop off should have been expected since the X/S that sold the most was the 75 kWh battery option because it was more affordable. Almost all the people who purchased the 75 kWh battery were really not X/S customers to start with, but they were Tesla customers. Had the 3/Y been available they wouldn't have even looked at S/X.
Business Insider through Yahoo - 3 hours ago: Tesla's services could be worth more than its car business, according to one Wall Street analyst who says the company is better compared to Apple, Tinder, and more.
Excerpt:
All together, the new weight on non-automotive revenues are another step in transformation from a product sales business to a services-heavy, recurring revenue business like Apple, to which Morgan Stanley has often compared Tesla. The iPhone maker, Jonas points out, has grown services revenue to 40% of overall profits.
But the comparisons don't stop there. Morgan Stanley says it consulted across teams for relevant comparisons to Tinder, Roku, and even video game makers.
"Yes, consumer behavior in a dating environment is relevant," Jonas said. "A real eye-opener for us."
Excerpt:
All together, the new weight on non-automotive revenues are another step in transformation from a product sales business to a services-heavy, recurring revenue business like Apple, to which Morgan Stanley has often compared Tesla. The iPhone maker, Jonas points out, has grown services revenue to 40% of overall profits.
But the comparisons don't stop there. Morgan Stanley says it consulted across teams for relevant comparisons to Tinder, Roku, and even video game makers.
"Yes, consumer behavior in a dating environment is relevant," Jonas said. "A real eye-opener for us."
Apologies, I misspoke. I was referring to leverage not delta (already edited the original post). I have built an Excel sheet which uses the IB API and shows me for the interesting part of the options chain a comparison of deltas between a portfolio full of common stock vs. a portfolio fully comprised of the respective option, and the leverage next to it. E.g.
In this example (I had to filter because outside market hours, I'm not getting data for all options via IB), a portfolio full of Jun '22 650 CALLs would give me a leverage of ~2.15 vs. common stock for a total delta of 11,633 if I had a portfolio 100% comprised of this instrument. (I would not choose this option because it's too ATM for my taste).
Another criteria I use to select my favorite options is the % premium over the current stock price (e.g., in the example above, a 650 CALL would cost ~$200. With stock price at $660 right now, that'd be a $190 premium, or ~29%... too expensive for my subjective taste). I aim for max. 10% premium.
After having paid a lot of tuition in short-dated OTM CALLs, I came to the conclusion that my goal with dabbling in options is not to get rich in a short period of time. Rather, it's important that I don't shoot myself out of the game by being too aggressive/greedy and blowing up my account (cf all the S&P inclusion plays on this board that went nowhere). Instead, my goal is let the gains compound with an exponent that is higher than the exponent on "just" holding the common stock.
Also, in order to make some money on the side, I'm selling DOTM short-term CALLs against my long LEAP CALLs as long as I deem it "safe" (e.g., the low-volume short trading weeks like now I like).
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Thanks Curt....eloquently put..unlike my barbaric styleIndeed. The recent Reuters Apple EV article quoted only anonymous sources. The same was the case with the almost identical WSJ article in 2015. Both reported that management would not comment. Both predicted production within four years.
I suspect that the anonymous sources were Apple engineers who stay with their jobs because management keeps feeding them the line that production may be only four years out. Anti-Tesla entities may have pushed (or paid) Reuters to recycle an Apple EV rumor shortly after Tesla entered the S&P 500. That allowed the media and YouTubers to excitedly publish clickbait articles and videos, since both Apple and Tesla are attention grabbers. The media frenzy may have temporarily capped TSLA prior to today's options expirations.
Coolio2000
Member
Can you recommend a good place to learn about covered calls, and a good strategy applied toward TSLA?
Thanks!
This thread on this very site: Applying options strategy 'the wheel' to TSLA
And this one too: Options trading strategy/advice
There is also a thread on "newbie" options in the Investor section, but it eludes me at the moment.
Edit:
Found it!: Newbie Options Trading
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