trading

[mongo]

Question: Given the high IV of options at the moment, if one had a DITM call in the Feb timeframe and 100 shares (so a sold call would be covered two ways) would it be a reasonable thing to set up a bull call spread? (sell a call today for an off the money strike expiring at or before the call they already have)

It limits upside profit depending how much earnings bounce things, but offsets the IV drop. Could even close the sold call early (if expiry in February) to free upside potential.

 

[Zhelko Dimic]

Did you guys know 8 weeks rule? This is the one I learned in 2013 (above mentioned FB episode) when I sold my $300 worth options for $3,000, and failed to keep them until they became $45,000

The 8 Week Hold Rule | Stock News & Stock Market Analysis - IBD

It would appear TSLA qualifies for this rule now, like FB did in 2013. Just musings, not an advice. I will not leverage, but I will not be selling anything either...


View attachment 477087

Are we starting another 8 week counter tomorrow?

 

[FrankSG]

Are we starting another 8 week counter tomorrow?

I wouldn't count on that. Results were kind of in line with what I expected, and I think maybe a very slight beat of what the market expected. I was surprised to see this big of an after market move to be honest, because no big surprises came to fruition, and they did not create much hype around 2020 either. I think their guidance was very conservative, which is probably smart and should set us up for a more gradual SP increase throughout the year as they meet targets, with possible big jumps here and there where they manage to beat their own guidance.

For the near term though, I would expect the climb to slow a bit based on these numbers, unless I'm underestimating the amount of hesitant funds that were worried about Q3 being a fluke and waiting for Q4 to be solid before jumping on board.

I also think expectations of S&P 500 inclusion after Q1'20 should be lowered, because of the CEO Grant hurting GAAP income this quarter. It's possible, but less of a certainty now, especially considering their conservative guidance for Q1.

I could be wrong about all this, but I think I'll be taking profits on and selling my 21 Feb $800 calls at market open tomorrow. No crazy 50-100x return, but it looks like I might be able to sell them for around 5x what I bought them for.

 

[jeewee3000]

I wouldn't count on that. Results were kind of in line with what I expected, and I think maybe a very slight beat of what the market expected. I was surprised to see this big of an after market move to be honest, because no big surprises came to fruition, and they did not create much hype around 2020 either. I think their guidance was very conservative, which is probably smart and should set us up for a more gradual SP increase throughout the year as they meet targets, with possible big jumps here and there where they manage to beat their own guidance.

For the near term though, I would expect the climb to slow a bit based on these numbers, unless I'm underestimating the amount of hesitant funds that were worried about Q3 being a fluke and waiting for Q4 to be solid before jumping on board.

I'm inclined to agree, but you leave short covering out of the picture.

The gap up did happen, premarket seems to consolidate around $640, so ATH shorts are now about $50 under water. I think $700 by the end of next week is in the cards, mabye $750.

I'm not gambling on it short term, but I am not selling any shares/LEAPS.

BTW I held one 21Feb $800 call and chickened out yesterday. Sold it with 43% gains. If I had bought more than one I would definitely had let some ride.

I'm just a terrible short-term trader, but I do love the thrill of a quick buck with a few mouseclicks.

 

[FrankSG]

I'm inclined to agree, but you leave short covering out of the picture.

The gap up did happen, premarket seems to consolidate around $640, so ATH shorts are now about $50 under water. I think $700 by the end of next week is in the cards, mabye $750.

Yeah I could see $700, maybe $750 in the next few weeks, but I think the chance of $900 or $1000 in the next month has dropped significantly, so I better start to unwind the 21 Feb $800s that I own. I could be wrong if one or multiple big buyers present themselves, but I'm going to take profits on these for sure.

I'm not gambling on it short term, but I am not selling any shares/LEAPS.

BTW I held one 21Feb $800 call and chickened out yesterday. Sold it with 43% gains. If I had bought more than one I would definitely had let some ride.

I'm just a terrible short-term trader, but I do love the thrill of a quick buck with a few mouseclicks.

Yeah, hell no I'm not selling any shares. I'll be buying shares with the proceeds of the 21 Feb $800s. I wouldn't even consider selling a single share if SP was $2,000 today

Also holding on to all my other long term (18-30 months) calls. I don't like to 'bet' much on the short term, because I'm not very confident in my ability to predict it accurately. These 21 Feb $800s are only about 3% of all my options, even after this post-ER spike to $640-650.

 

[Ocelot]

Must say I am a bit less optimistic. I see TSLA trading sideways for the next 3 months at least. Obviously hope I am wrong, and definitely usually am wrt option timing, (oh why could this not have happened 6 months ago???). Hard to predict where the rocket stops, but I feel it will cool off now for a bit. i mean, it literally has been crazy.

 

[anthonyj]

Must say I am a bit less optimistic. I see TSLA trading sideways for the next 3 months at least. Obviously hope I am wrong, and definitely usually am wrt option timing, (oh why could this not have happened 6 months ago???). Hard to predict where the rocket stops, but I feel it will cool off now for a bit. i mean, it literally has been crazy.

I’ve been hearing this a lot. This is a buy signal. When literally EVERYONE says Tesla can’t be stopped, that’s when we will see a short term reversal. 1,100 is the level to watch

 

[jeewee3000]

New JUN2022 LEAPS have arrived. Strike prices $1.170 to $1.300.

Will have a look what price they open with today. In case of dip after Q1 I might get some.

 

[jeewee3000]

New JUN2022 LEAPS have arrived. Strike prices $1.170 to $1.300.

Will have a look what price they open with today. In case of dip after Q1 I might get some.

As a note to future-self:

JUN2022 1300C first bid/ask was 38,25 / 45,70 with SP of $640-$645 and IV of +/- 42%.

 

[FrankSG]

I'd get some if I didn't already own an absurd amount of Jun'22 $990s & Jun'21 $900s.

I'd reckon those $1,300s are good too, but if you could get them during some sort of dip for $30-$35 or even less, that'd be amazing.

Anybody's guess as to whether there will be such a dip or not though.

 

[EVNow]

I bought 540/550 bull spread on Monday for $4 and made $6. So, now I paid $10 for a 570/595 spread. Might buy a put hedge on Wednesday hoping to breakeven if the SP goes down after ER.

On Wednesday I bought a 530/520 put spread for $2.50. Total investment of $6.50.

On Thursday rolled the 570/595 to 600/630. So, finally a 4x return.

Was thinking about buying 650/670 for $4, but didn’t

 

[Boomer19]

battery day coming after q1 earnings, correct?
then next likely annual mtg in june?

already said no upcoming product releases, so...

 

[mongo]

battery day coming after q1 earnings, correct?
then next likely annual mtg in june?

already said no upcoming product releases, so...

Could be earlier in April than earnings.

 

[FrankSG]

Any insights on what will follow yesterday's crazyness? Can anyone even predict this anymore?

I sold half my 21 Feb $800s around $690, and now they're worth almost 10x Not complaining though, because I still hold half and wasn't expecting to make much from them after so-so ER anyway.

But now I'm wondering wth I should do with the rest of them. Anybody know if there are going to be margin calls tomorrow based on today's price action?

Even after today these short term options are only ~3-4% of my total options holdings, and even less of my overall TSLA holdings, so it's not the biggest deal if I don't perfectly time selling them, which is nearly impossible anyway. But I'm unsure what to do with them at this point.

 

[Cherry Wine]

Any insights on what will follow yesterday's crazyness? Can anyone even predict this anymore?

I sold half my 21 Feb $800s around $690, and now they're worth almost 10x Not complaining though, because I still hold half and wasn't expecting to make much from them after so-so ER.

But now I'm wondering wth I should do with the rest of them. Anybody know if there are going to be margin calls tomorrow based on today's price action?

I think any margin calls from today's action will have several days to cover unless they're deep in the red. I am in a similar situation as you and am only holding half of my 2/21 $900s which are now 35-baggers. I am thinking of selling a calendar spread at $1,100 for 2/14 to lock in some profits or maybe as a bull spread at $1,100 for 2/21 and holding to expiry to see if it rips to $1,000+.

 

[jeewee3000]

Am I the only one thinking the stock will crash "any day now" but it keeps surprising me?

After yesterday's close I thought we'd see a dip today and maybe some covering tomorrow to get us back to $750. Pre-market shows it's up again.

Why I'm asking is I'm thinking about portfolio rebalancing. I was 92% in stock and 8% in LEAPS. Now I'm 53% stock 47% options. I'm holding some more till I think I see volume draining and we go flat, but I've never been this ancy to hit that sell button on my LEAPS and convert to shares.

OTOH: if I keep my LEAPS close to expiration (JAN and JUN 2022) I could end up with way larger gains.

First world problems.

 

[FrankSG]

Am I the only one thinking the stock will crash "any day now" but it keeps surprising me?

After yesterday's close I thought we'd see a dip today and maybe some covering tomorrow to get us back to $750. Pre-market shows it's up again.

Why I'm asking is I'm thinking about portfolio rebalancing. I was 92% in stock and 8% in LEAPS. Now I'm 53% stock 47% options. I'm holding some more till I think I see volume draining and we go flat, but I've never been this ancy to hit that sell button on my LEAPS and convert to shares.

OTOH: if I keep my LEAPS close to expiration (JAN and JUN 2022) I could end up with way larger gains.

First world problems.

If they're Jan'22 and Jun'22 LEAPS, I would hold onto them. I'm personally not selling any of my Jun'21, Jan'22, nor Jun'22s.

Reason being that I think it will be higher than it is now in 12 months from now. Even though I did not expect it to run up to $800 this quickly, and even though it's entirely possible we'll see a dip/consolidation at some point, I still think that as Tesla meets (and most likely exceeds) its 2020 targets, the SP will see significant further appreciation from here. I don't think $1600 a year from now is far fetched if 2020 goes well, especially if the markets keeps increasing its willingness to attach a higher and higher valuation to TSLA.

Also take a look at TSLA's P/S ratio. It's currently sitting at 5.7, which may seem absurd, but Uber's is at 4.9. TSLA is growing faster, is disrupting much larger industries (including Uber's), and has a lot more hype around it. Even in the near term, I don't think TSLA's current valuation is that crazy if the market is finally ready to look at it as a tech stock rather than an automotive stock, which I think has clearly happened at this point.

With that being said, different people have different risk tolerances. So if you feel uncomfortable with 50% options, by all means deleverage a little.

I will probably convert some options to shares and some to higher strike prices (my Jan'22 $500s), but not until we reach $900-$1000 or so, which at this rate could be in a few hours

 

[jeewee3000]

If they're Jan'22 and Jun'22 LEAPS, I would hold onto them. I'm personally not selling any of my Jun'21, Jan'22, nor Jun'22s.

Reason being that I think it will be higher than it is now in 12 months from now. Even though I did not expect it to run up to $800 this quickly, and even though it's entirely possible we'll see a dip/consolidation at some point, I still think that as Tesla meets (and most likely exceeds) its 2020 targets, the SP will see significant further appreciation from here. I don't think $1600 a year from now is far fetched if 2020 goes well, especially if the markets keeps increasing its willingness to attach a higher and higher valuation to TSLA.

Also take a look at TSLA's P/S ratio. It's currently sitting at 5.7, which may seem absurd, but Uber's is at 4.9. TSLA is growing faster, is disrupting much larger industries (including Uber's), and has a lot more hype around it. Even in the near term, I don't think TSLA's current valuation is that crazy if the market is finally ready to look at it as a tech stock rather than an automotive stock, which I think has clearly happened at this point.

With that being said, different people have different risk tolerances. So if you feel uncomfortable with 50% options, by all means deleverage a little.

I will probably convert some options to shares and some to higher strike prices (my Jan'22 $500s), but not until we reach $900-$1000 or so, which at this rate could be in a few hours

I'm holding until $1000 at least. Then maybe some shifting resources. I want some profits secured to purchase a Model Y.

 

[ABC2D]

but not until we reach $900-$1000 or so, which at this rate could be in a few hours

$900 is already here, so $1,000 by tomorrow

I'm holding until $1000 at least

which means, probably, by noon today

 

[jeewee3000]

This is crazy.