insaneoctane
Well-Known Member
Sounds like a lot, but not sensitized to the numbers here...might be something on Friday?
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Tesla, TSLA & the Investment World: the Perpetual Investors' Roundtable
- Thread starter AudubonB
- Start date
I'm having trouble understanding how puts expiring equates to shorts needing to cover?
Elons vision is the opposite of The Fifth Element, big cities will not have multiple layers of flying taxis filling the sky, but multiple layers of robotaxi tunnels beneath.
When a short buys a put, they usually buy it from the market maker. Since the market maker is at risk of getting the shares put to them if the put expires ITM, they will sell an equivalent amount of shares to be delta neutral.
For example, if a short buys one put with a -0.5 delta, the MM would have to sell 50 shares (-0.5 x 100 = -50 --> sell 50 shares) to remain delta neutral (or, to be more exact, sell 50 deltas, which they can also achieve by selling an equivalent call or buying an equivalent future).
As time passes and expiration comes closer, the put's delta will either increase or decrease (depending on whether the option is ATM, ITM or OTM). Thus, it's a constant process for the MM's to hedge so they remain delta neutral.
The more puts are OTM, the higher the total delta (e.g., from -0.5 to -0.1 --> from -50 to -10 shares), and the more shares (deltas) the MM's will need buy back to remain delta neutral (in this example, 40 shares/deltas). If an option holder decides to close a position, the MM will need to buy back the shares to, again, remain delta neutral (e.g., if I close my put with -0.5 delta, the MM needs to buy 50 deltas in the market to be delta neutral again).
However, since I believe this hedging done by MM's (a) is a constant process, and (b) they don't need to buy/sell shares to remain delta neutral (they can also buy/sell futures or buy/sell options), and (c) they have various loopholes (e.g. naked shorting exemption), I would qualitatively assume that the potential for a huge effect on the underlying's price is rather low.
However, quantitatively, if the gamma (which, as the first derivative of delta, is an indication for the velocity of delta) of all outstanding puts is very high, and a large price move would occur (e.g., Hertz), a gamma squeeze could follow. Someone would need to run the numbers for that scenario and compare with historic precedents.
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Apparently Kia’s UK CEO Paul Philpott is unhappy with Tesla’s price drop. (Source video is Spoilered below)
The final point is the one that caught my attention the most though because it tickles some of the concerns I‘ve had about auto companies and lease returns over the past few years. When a company leases a car out, if the car is worth more than the residual value on the books, they book the difference as profit. Over the past couple years, the big automakers have been living large on a huge windfall from lease returns with huge residual values.
That tailwind is gone… used car prices were already dropping and there is a strong chance this has a trickle down effect on the entire used auto market. I think this is a big part of what Philpott is so concerned with. We talked about used car dealers taking a huge hit on EV inventories due to Tesla’s price drop. Imagine you are looking at hundreds or thousands of lease returns on your books over the next year and Tesla just put a knife to the value of that inventory.
The next few quarters could very well be a bloodbath for legacy auto. I expected leases to implode on legacy auto, but not for a few more years. This is like a mini-preview of what’s to come as the value of used ICE vehicles starts to tank.
- Claims it’s dangerous to reduce prices because it impacts residual values
- Suggests controlling supply to keep prices higher
- Could be done via financing support
- Price drops undermine residual values of leases
The final point is the one that caught my attention the most though because it tickles some of the concerns I‘ve had about auto companies and lease returns over the past few years. When a company leases a car out, if the car is worth more than the residual value on the books, they book the difference as profit. Over the past couple years, the big automakers have been living large on a huge windfall from lease returns with huge residual values.
That tailwind is gone… used car prices were already dropping and there is a strong chance this has a trickle down effect on the entire used auto market. I think this is a big part of what Philpott is so concerned with. We talked about used car dealers taking a huge hit on EV inventories due to Tesla’s price drop. Imagine you are looking at hundreds or thousands of lease returns on your books over the next year and Tesla just put a knife to the value of that inventory.
The next few quarters could very well be a bloodbath for legacy auto. I expected leases to implode on legacy auto, but not for a few more years. This is like a mini-preview of what’s to come as the value of used ICE vehicles starts to tank.
Not my favorite source because he’s quite sensational and… often wrong… but I think his information is legit here.
DanCar
Active Member
For the data lovers: Tesla inventory level dashboard:
Nice sheet but max three days? I would be more interested in seeing monthly or at least weekly trends. Is that available somewhere?
Cult Member
Born on the 4th of July
Just have a look at the link in the third line of that page beginning with 'Historical data can...' and you get up to 120 days.
Unusual comment, they are on live CNBC for hours daily. Looks like a good place to look for advertiser dollars however.
petit_bateau
Active Member
Does anyone know what is the cycle time for the IDRA 9000t casting/press ?
JusRelax
Active Member
Happy Spring Festival, everyone!
Some thoughts from a Swiss: Firstly: IMO the question about „ruling the world“ or not is total BS. The WEF has no mandate whatsoever and will never have one. The perceived importance of the meeting was and remains a clever marketing strategy from Klaus Schwab, the MSM continues to help this narrative. It‘ a closed club for all kinds of business activities (you might call them shenanigans as well), combined with some luxury an wh**ng around. I seriously don‘t get the obsession with WEF, be it pro or contra. Show me one binding resolution or decision that has ever been taken at WEF. If it‘s something, then an economic boost for Davos and Swiss tourism in a normally dull time of the season.
Tesla won't be happy until it approaches the MG-42 rate. No idea what the actual cycle time is though, sorry.
1.2 cycles per minute dry (DIN 24480) per their data sheet.
Time to actually prep, cast, cool, and remove is a big unknown. From recent rumors, Tesla is doing less of the cooling in the press (which may partly explain the outside storage at Austin).
Many years ago (57 to be precise) I drove extensively in New York County as part of my job.
Then it was difficult to drive without excessive caution. Every experience since then has been more demanding, especially since the long ago collapse of the West Side Highway. That is relevant precisely because no fully autonomous vehicle has even approached ability to drive there. Most large urban areas are similarly difficult, but the most valuable robotaxi markets are central cities, many of them more difficult than NYC, like Rome, Tokyo, Mexico City, São Paulo not to mention Karachi, Beijing, or Cairo. All of those are prime robotaxi markets.
Optimistic most of us are, but real autonomy is probably more likely with restricted access highway hauling for freight than is any urban market.
We have nearly endless technical discussions, but the reality is that even geofenced operations have not been successfully safe. The conclusion inescapable is that sometime, maybe, but this is beginning to be like fusion reactors.
I hope I'm wrong, but using Tesla's since 2015 first autopilot efforts I've experienced huge progress, exciting by each one. Wonderful, but not anywhere close to point to point urban navigation, not even in the US' largest city, Jacksonville, FL that is mostly wooded and sparsely populated, but they've a difficult center city too and even the latest released version cannot do that without interventions.
I hope somebody has evidence that this is incorrect conclusion. I dislike my own conclusion.
petit_bateau
Active Member
If 1.2 cycles per minute dry then let's just guess at 1 cycle per minute with metal.
So 365d x 24h x 60m x 80% minimum uptime = 420,480 per year
If this press can cast a 2/Z chassis as a single piece (a big if) then that means that a factory with a 2/Z (or equivalent) vehicle assembly line would need to be at a minimum annual throughput of 400k/year to be economically competitive with the corresponding Tesla 2/Z factory.
You can see the issues the other auto manufacturers have in adopting these big IDRA-stle presses. You can also see the issues if they do not adopt these presses.
You can also see that a minimum factory size is likely to be for at least two production lines to enable workforce/supplier continuity etc during line/model/etc transitions, so pretty soon the minimum economic size of an assembly factory becomes about 1m/year. In contrast with a lot currently being at 250k/year, and very few (two ?) being over 1m/yr at present (VW Wolfsburg and Hyundai Ulsan) soon to be joined we hope by Tesla Shanghai, and in due course Tesla Berlin and Tesla Austin.
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Is Tesla installing two of these presses in Austin ? If so that would suggest one is to do the Cybertruck front casting and the second the rear casting, thereby minimising tool/die changes. That also might indicate the Cybertruck line is aiming for 400k/year in 5-shift operation.
Thanks! I blame a combination of old age and extremely short attention span
jkirkwood001
Active Member
Even more so in northern cities in bad weather when people won't / can't bike or stand in the snow waiting for a bus (I live in Canada which has decent public transit - worse than much of Europe, better than most of US). FSD can't do obscured roads at all AFAIK. Still a big gap in the target state / business case.
I have been waiting for this type analysis. Important stuff as it may be a driving reason for defining new pricing. The risk that comes with casting is low volume or lumpy demand.
Without a dealer network to cushion lumpy demand, pricing must be over-riding driver.
OTOH, volume, driven by pricing, cures a multitude of concerns. It becomes “good enough” over “great“ driven by price. This is the way. (hence Highlander) YMMV
Wow, Jacksonville must have really increased in Population recently!
edit: my idiocracy confirmed.
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