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

[UkNorthampton]

I spent nearly a decade commuting between Hyde Park Corner and Northampton. Today that would be quite easy in a Tesla with Tacc even easier with FSD. The M25/M1 was so painful I still remember it and I know it is worse today.

M25 - largest car park in UK.

I used to judge congestion on M1 by how many times I put the handbrake on, even for a 1 junction journey.

The Boring Company needs to tunnel under the M1 - pop up at services. Would do a LOT to drive EV/Tesla adoption. A few of these tunnels & virtually ALL company cars would be Tesla (or at least EVs).

A large part of traffic in England is either M25 or M1 North/South - confined by geography. The Watford Gap (pass) constrains a lot of communications - road, rail, canals. It wastes huge amounts of time, creates huge pollution, lots of accidents making it even worse.

I think Tesla/Boring Company should prioritise some of these problem areas (all over the world) - it would help adoption so much.

 

[HG Wells]

MMD over ?

 

[asburgers]

Not trusting the intrawebs, I took a look at the put option OI myself. It's hard to see but the $20 positions are split almost equally between Feb19 and Mar19 expiries. April volume was low in comparison.

I'm no Hardy boy, so take everything I say with a heaping of sodium (figuratively of course).

It appears that the Feb19 tranche was put on around Jan 12. The Mar19 group that was detected by MBurr didn't come on until this week.

Puzzling.

Is this a financial hopscotch where someone's insurance/hedge positions are rolled monthly where someone screwed up? When you roll, the OI is more or less neutral over months and not additive.

The OTM Feb19 options will need to be closed out next friday, which means that any short positions to hedge will be unwound. Would that boost short term prices? ~317,000 Feb19 contracts = 317,000,00 stocks (mind the commas) * Delta of <0.000 = something small. Maybe not?

At time of writing, the Ask Volume on Feb19'21 20P was 7,607 contracts. That's a lot of lottery tickets for sale.

What does this mean?

Is a naughty naughty someone using these positions to artificially reduce VaR on their books to avoid liquidating profitable long positions??

This ape needs to know!

 

[StealthP3D]

Can't stop the tesla train baby. Everyone can relax now after our massive dip.

They probably want to cap the total cost but what they should do is make it first come first serve rather than rewarding the laggards.

It's difficult for government to get involved in capitalism without distorting markets. If they made it "first come, first served", that could "stamp out" new startups that just happened to be in a precarious position right as the subsidies ended.

The only solution that doesn't distort markets is the best one. Namely, ending fossil fuel subsidies and applying a carbon tax designed to approximate the true cost to society of burning fossil fuels. This would also push up the price of electricity to whatever extent that electricity was produced with fossil fuels. But apparently our elected leaders won't do this because powerful monied interests have convinced people it's less popular than it is. Lobbying distorts markets. It's basically advertising, spending money to convince people they should do something other than the obvious.

 

[lklundin]

It reserves 800k of cash or margin for 2 years (which may or may not be considered a bad thing)

Well, that would be a very conservative margin reserve - assigning 100% probability of delivery of shares.

IBKR would reserve much less for such a trade - namely an amount on the order of the premium received for the sale. The catch (in general) is that if the contract starts to move towards ATM, then the required margin reserve goes up - potentially all the way to reserving the actual amount of money needed for the delivery of the shares.

 

[BornToFly]

Can somebody explain why it would be a bad idea to sell 80 x Jan ‘23 100 puts for a premium of $42k?

If the SP goes down your Margin requirements will go up for those puts. Just make sure that doesn't put you in Margin Call territory.

 

[stealthyc]

Well, that would be a very conservative margin reserve - assigning 100% probability of delivery of shares.

IBKR would reserve much less for such a trade - namely an amount on the order of the premium received for the sale. The catch (in general) is that if the contract starts to move towards ATM, then the required margin reserve goes up - potentially all the way to reserving the actual amount of money needed for the delivery of the shares.

Most brokers are pretty conservative unless you have Portfolio Margin.

 

[Nocturnal]

It's difficult for government to get involved in capitalism without distorting markets. If they made it "first come, first served", that could "stamp out" new startups that just happened to be in a precarious position right as the subsidies ended.

The only solution that doesn't distort markets is the best one. Namely, ending fossil fuel subsidies and applying a carbon tax designed to approximate the true cost to society of burning fossil fuels. This would also push up the price of electricity to whatever extent that electricity was produced with fossil fuels. But apparently our elected leaders won't do this because powerful monied interests have convinced people it's less popular than it is. Lobbying distorts markets. It's basically advertising, spending money to convince people they should do something other than the obvious.

These credits will be temporary no matter how you look at it. This just ensures that BMW, Ford etc. know they will have credits when they finally move into the market for real 3 years from now.

Agreed that ending subsidies on the other side would be better but we all know that won't ever happen.

 

[BornToFly]

Can somebody explain why it would be a bad idea to sell 80 x Jan ‘23 100 puts for a premium of $42k?

For the same $800k at risk, I sold 10 800 Strike puts one month out for over $50k at the open today. If the SP drops, I can roll them down and out if I don't want them assigned. Or, I can let them get assigned, and then sell 10 Covered Calls for 800 or higher and make money again. If they don't get assigned and they expire worthless, I can do it many more times between now and Jan 2023 (I can easily make over $500k to your $42k). If you don't actually have $800k in cash or Margin, then what you suggest is safer, but there is still some risk for only $21k/year in income. You are probably better off using your margin for other things that will make you more $$$.

 

[BornToFly]

I'm starting to see more positive Bitcoin articles on my Yahoo news feed now. Maybe people who sold TSLA because of the Bitcoin purchase will start to jump back in soon. Paging Gary..., Paging Gary Black....

 

[StealthP3D]

Agreed that ending subsidies on the other side would be better but we all know that won't ever happen.

I know it seems unlikely that tax breaks for oil companies could go away and a carbon tax could be applied but giving up hope amounts to buying into the belief that big oil will always be powerful.

In my opinion, it's just a matter of time. The sooner, the better.

 

[Nocturnal]

I know it seems unlikely that tax breaks for oil companies could go away and a carbon tax could be applied but giving up hope amounts to buying into the belief that big oil will always be powerful.

In my opinion, it's just a matter of time. The sooner, the better.

I'm very pessimistic about humans but I don't let that interfere with my attempts to make things better. I'll keep fighting the good fight.

 

[Singuy]

I just think it short-sighted and silly to criticize their business plan when they haven't even detailed it for us. You need to understand it before you criticize it. And, obviously, the people who developed the plan know a lot more about the specific factors that helped shaped the plan than you do.

It reminds me of the three blind men describing an elephant (all descriptions radically different depending upon where they were standing when they described it).

The "well you are not the cfo/ceo/president of manufacturing so you don't know the entire picture" can be said just about everything about every company. By that mantra no one can critique anything.

 

[Runarbt]

said: ↑
Can somebody explain why it would be a bad idea to sell 80 x Jan ‘23 100 puts for a premium of $42k?

It reserves 800k of cash or margin for 2 years (which may or may not be considered a bad thing)

As an example - I have aprox $600k margin available, and have been making $30-50k a month selling naked puts. I use aprox. 40% of my margin this way. (Works like a charm in sideways and uptrend. However, THIS was not a fun position to be in yesterday. )

It is way more comfortable to stay below 20%, this would bank $10k (easy) a month with far OTM naked puts- over two years - $240k vs. 42k the puts you quote give. A bit more aggressive selling, would bank double this, and 10x what those 80x $100 puts give.

 

[Budding]

As an example - I have aprox $600k margin available, and have been making $30-50k a month selling naked puts. I use aprox. 40% of my margin this way. (Works like a charm in sideways and uptrend. However, THIS was not a fun position to be in yesterday. )

It is way more comfortable to stay below 20%, this would bank $10k (easy) a month with far OTM naked puts- over two years - $240k vs. 42k the puts you quote give. A bit more aggressive selling, would bank double this, and 10x what those 80x $100 puts give.

Do you sell weekly or monthly puts? How many % lower than SP do you sell those?

 

[Knightshade]

As an example - I have aprox $600k margin available, and have been making $30-50k a month selling naked puts. I use aprox. 40% of my margin this way. (Works like a charm in sideways and uptrend. However, THIS was not a fun position to be in yesterday. )

It is way more comfortable to stay below 20%, this would bank $10k (easy) a month with far OTM naked puts- over two years - that would bank $240k vs. 42k the puts you quote give. A bit more agressive selling, would bank double this, and 10x what those 80x $100 puts give.

I went and looked today at the selling naked puts via margin profit vs using margin for a buy/write and saw these #s suggesting puts are worse overall- wondering your thoughts.

Example: (I'm using about 80k in margin in both examples to try and be apples to apples- math shouldn't change if you're using 80k or 800k though)


Selling 8 $500 puts for march 19 gets you $2960 premium- and locks up 80k of margin (20% of the exercise cost)

Doing a buy/write with SP at 811 and selling an 820 call for March 19 gets you about $5100 in premium (minus margin interest since it's actual borrowing not just lock up). If it exercises your gain goes up to about $6000.


So the buy/write seems 1.7-2x as good in this example..... the "chance of risk" is higher (ie the chance of the SP going below what you paid for it is much higher than the SP going below $500) but the "loss" of risk is just you keep selling CCs on the shares- which barring a major crash still more than covers margin interest.


Are you selling much less OTM puts than my example- because otherwise seems buy/write is better returns?

 

[MTL_HABS1909]

Yeah.....this is definitely going red today. Can't even maintain buying volume for an hour

Oh well. I think we should expect to spend some time in the 700's at this rate. Might have to wait till Q1 P/D to really get a catalyst

I kind of hope it does. I still have my buy order under $800 I had set yesterday.

Edit: It went red, just not red enough....

 

[StealthP3D]

The "well you are not the cfo/ceo/president of manufacturing so you don't know the entire picture" can be said just about everything about every company. By that mantra no one can critique anything.

Not at all. I'm saying I don't think Tesla has disclosed enough for you to know what it will take for the current prices to be profitable.

Being critical of the pricing being too low because it's not profitable during the ramp seems awfully short-sighted.

Question everything to further learning. Criticize only those things you fully understand.

 

[agastya]

Can somebody explain why it would be a bad idea to sell 80 x Jan ‘23 100 puts for a premium of $42k?

Someone has taken up this idea

 

[scaesare]

https://twitter.com/wholemarsblog/status/1359673814385270784?s=21
A little humor after a bad day...

View attachment 635720

edit: the competition is coming

edit2: btw, that thingy on the top spins

edit3: and I think it’s powered by burning gasoline

Had to be done....