Given that FMR has over $1.5 trillion in assets under management, $500m in TSLA is like buying a lottery ticket -- might pay off, probably won't, but doesn't cost much. Even though they do own 1/6th of the company.
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TSLA Investor Discussions
- Thread starter Fr23shjive
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mitch672
Active Member
I disagree. Fidelity doesn't gamble, they invest. Owning 1/6th of all outstanding shares shows a positive outlook, and probably a long term investment for their funds. "Peter Lynch" was spotted at the Natick store opening, he still works for them part time, he was there for a reason (there are no coincidences), he has a track record for picking winners (a small fund he used to run called "Magellan"). The thinking could well be "They could be the next GM or Ford, with a much better profit margin/upside potential", the downside, well its .1% of their AUM, as you said, but its still a lot of their clients money, the risk must be worth the reward or they wouldn't be invested with such a large position.
Nasdaq puts institutional ownership at %58.93: Tesla Motors, Inc. (TSLA) Ownership Summary - NASDAQ.com
That's 66,404,189 shares
Disclosure: I am long TSLA, and just bought 500 more on Friday in an IRA account, and yes, they are held in my Fidelity account, that is probably also a factor - clients who own TSLA who are Fidelity clients, also count as part of that share count.
CyberDutchie
Active Member
What would be a good options buy today as a strategy to insure against further losses in case there is more trouble on the horizon short term?
My average purchase price for the TSLA shares I currently own is $30. I was going to sell to pay for my Model S which now looks like will be delivered Jan/Feb '13. I'm considering getting a car loan instead and holding for another year, but I'm risk averse.
Disclosure: I've never done options trading before, and not sure I quite understand it.
My average purchase price for the TSLA shares I currently own is $30. I was going to sell to pay for my Model S which now looks like will be delivered Jan/Feb '13. I'm considering getting a car loan instead and holding for another year, but I'm risk averse.
Disclosure: I've never done options trading before, and not sure I quite understand it.
smorgasbord
Active Member
To protect stock you own, one standard strategy is to buy Puts. If the stock goes up, the money you spent is down the drain (like any insurance), but if the stock goes down, you get to sell your shares at the agreed upon price (or you could re-sell the Puts for more money and still hold the shares for the long term).
But, since you haven't traded options before your brokerage might limit you to selling covered calls on the shares you own (which you don't want to do with TSLA). It might be worth asking your brokerage for the options level that lets you buy Puts, since it's not a risky strategy in that your losses are limited to the purchase price of the Put options you buy.
Citizen-T
Active Member
+1
But do your homework first. Make sure you understand how this works before you start playing with real money. Plenty of resources all over the Internet.
CyberDutchie
Active Member
Thanks smorgasbord and CT, I have just been approved for option level 2 trading at E*Trade. The trading choices that are enabled in the app under options trading are: buy open, sell open, buy closed and sell closed contracts. I'll have to study what those mean, but they're sending me a book in the mail as well. :smile:
mitch672
Active Member
You can mess with options, but just keep in mind they often expire worthless (as any insurance policy does). If you believe in TSLA, another strategy is to buy actual shares with money you can't spend for a long time anyway, such as in your IRA or 401K, if the stock moves down in price temporarily, it's not going to affect your day to day survival. I woud not use money I need to pay for things I need short term, TSLA could be a good long term investment, but it's highly volatile and risky as a place to park "needed money" in. The advantage of actual shares being you can wait out any market volatility, you still own the shares until you sell them. Sure you can get options to protect your position, but in the end, if they end up selling your TSLA position because of short term market volatility, you no longer have the shares, long term. Just food for thought.
earthling
Iam Notdesi
Options can be looked at in different ways. A few are: as Insurance; Locking in profits, Limiting losses, or Gambling.
There are plenty of places online to help you understand and learn the basics. Just google "options tutorials" and you'll be on you way. You also might want to pick up a copy of "Options as a Strategic Investment" by Lawrence G McMillan. It's a great book to keep as a reference.
I am not in a position to offer any advice on what you should buy or sell in the options market. And since you're risk averse, you really need to take baby steps when you dip your toe into the water.
Cheers =)
FMR reports shares held in mutual fund accounts it manages and for which it has voting rights. Shares held in street name by its brokerage affiliate are not institutionally owned.
Options are complex and some reading is required to understand the mechanics of how they work.
I find that buying Calls or buying Puts is expensive. Instead, I write 'naked puts' or sell 'covered calls'. Generally, these strategies don't provide the downside insurance you are looking for but they do help you to reduce your cost base gradually over time.
Run some numbers on your cost base ($30.00 per share) and then add the premium for any Put options that you buy. That will increase your investment and if the strike price of the Put option is 'in-the-money' it will be expensive. In fact, buying Puts could crystalize losses such that the insurance could cost more than liquidating your position now.
Given the importance of the production, delivery and reservations in Q4, and the U.S. elections, you can expect significant company-specific and general market volatility. TSLA announces Q3 results on Monday, October 29 and they will probably provide guidance into the Q4 production, deliveries and reservations. The market could react violently to surprises in those key numbers.
As a general strategy, you may consider writing covered calls when TSLA approaches high points in the recent trading history and selling naked puts when TSLA approaches low points. You don't want to get called or put, just earn the premium at expiry and then keep playing the game.
As other have mentioned, do some reading so you understand how options work.
Citizen-T
Active Member
It's uncertain. I think we could go lower, but not with a lot of confidence. On the other hand, we are definitely at the lower end of the range. It's hard to see how we could go too much lower without any news, I might just be getting greedy.
I'm happy with my position at this point, so I think I'm holding out for a better price, I'll take another look if we get under $27.
gg_got_a_tesla
Model S: VIN 65513, Model 3: VIN 1913
My (uninformed) hunch is that we could be seeing sub-$25 price levels as the Model S production delays persist in the lead-up to the Q3 earnings call and after (if the Q3 earnings and/or forecast for Q4 are weak, as they well might be given the delays).
Am sure all the posts about delays on TMC and the TM forums are being watched closely by investors at this point.
Am sure all the posts about delays on TMC and the TM forums are being watched closely by investors at this point.
Zzzz...
Member
I think downward pressure is caused by the news that Tesla Motors got 4 lawsuits going on in different states right now. And that scare long time investors(mostly institutional ones) way more then drop from 5k to 2k short time total production rate. I mean, will TM get to that 400 Model S a week production rate on time OR three or four months later dose not matter long term.
But it is clear now that TM will get dozens of lawsuits in each state Tesla Motors was/will be reckless enough to open stores. Four just a beginning. On the long run, that is not TM that should win most. It is industry it facing just need couple wins out of many hundreds lawsuits to damage TM severely.
I would say rationally that reason should not place price of share below $27. Not speaking of $26. But sometimes market react irrationally. So might be even $25 possible at this stage, but I personally doubt that.
PS. Sorry you asked not me, but Citizen-T. I still feel like using your question as an opportunity to express my opinion. Hope you do not mind.
Bardlebee
Member
It's frustrating that they are getting lawsuits on something that shouldn't be a law to begin with. But that is the country we live in. 
I think they have a good case though, they technically aren't selling the car itself. The argument could be made that they are selling the cars around the law, but in the end I think Tesla will agree to tone down their selling of a specific car and inform them of electric vehicles in general. I don't know, I can't think of another way Tesla can get around this dumb law and I am sure its a topic of a new discussion.
I think they have a good case though, they technically aren't selling the car itself. The argument could be made that they are selling the cars around the law, but in the end I think Tesla will agree to tone down their selling of a specific car and inform them of electric vehicles in general. I don't know, I can't think of another way Tesla can get around this dumb law and I am sure its a topic of a new discussion.
With yet more people seeing delays recently, I'm definitely fearing Tesla isn't even going to come close to their reduced Q4 numbers and there will be a big stock hit. 6-9 months ago when I purchased my stock, Tesla had fairly consistently been meeting or beating expectations as far as reported progress. Ever since then they've over promised and under delivered. I've lost quite a bit of my faith at this point. I'm not sure I'd either buy TSLA or put down a deposit as things stand today.
I'm sort of stuck though. If I bail now, I've lost enough I couldn't buy my Model S if/when it does come out and I'd have to forfeit my $5k deposit (I'm already finalized). I knew that going in, but I figured if Tesla went south there wouldn't be a car to buy. If it didn't, then the stock would go up. It's in this bizarro world where the car might ship, but the stock is down.
I'm sort of stuck though. If I bail now, I've lost enough I couldn't buy my Model S if/when it does come out and I'd have to forfeit my $5k deposit (I'm already finalized). I knew that going in, but I figured if Tesla went south there wouldn't be a car to buy. If it didn't, then the stock would go up. It's in this bizarro world where the car might ship, but the stock is down.
erha
Member
I'm long and I think this is going to be pretty much like with the Roadster. Quite a bit of problems in the beginning, but after all Tesla beats expectations on quality and they get their problems sorted out. The financial results might not be that pretty the next quarters, but that doesn't really matter in a few months if the demand is still strong.
Norbert
TSLA will win
Short interest is still huge, and in spite of that, the price is holding up quite well given that the big ramp up hasn't happened yet. So maybe the increased shorts are balanced by increasing long term investments and decreasing attempts for quick profit.
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