Good advice... I wish I had taken it. Just had $5k of short term options expire worthless.
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Unfortunately I trust information on this fan club forum way more than the sales associates in the stores.
I love the bears latest - apparently Tesla may only reach 2,000/ week this month and the company has violated a SEC rule by discussing this scenario with analysts
In unrelated news it seems that the factory is in full swing and there is a large amount of cars filling and emptying from the storage lots including lots of Model 3s
In unrelated news it seems that the factory is in full swing and there is a large amount of cars filling and emptying from the storage lots including lots of Model 3s
bdy0627
Active Member
This really has to be the most bipolar stock there is. The pattern hasn't changed in the slightest. As frustrating as this stock is, just embrace the pattern, but don't go overboard with your leverage, especially ultra-short term. If you look at this, notice that increasing leverage when the stock is down 8+% from a local high has yielded seriously good returns. That may change at some point, but it hasn't so far.
bdy0627
Active Member
Here's the data that went into the graphs, starting with the first climb 10 months ago:
sundaymorning
Active Member
What is your prediction, how low do we go from here if the anticipated 1500-2000 new VINs are not registered this weekend?
General Discussion: 2018 Investor Roundtable
I thought Waiting's post was pretty optimistic. Just as curious as you to see the new VIN assignments.
sundaymorning
Active Member
Something has to occur this weekend to give the short-term shareholders hope, and to persuade investors on the sidelines to re-enter. If not, then the share price short-term won’t be pretty.
Jeeze folks, all this discussion about nothing. Tesla are late ramping M3, I don't think any he-said, she-said is going to alter the market reaction to the Q1 figures. Remove the stress, buy and hold. Not an advice.
Frustrating. I really thought after the 5% drop earlier in the week based on the FUD article, that we would recover by today when everyone realized that the "reporting" was all garbage. Going down more was unexpected. Nothing but negative articles everywhere. Hopefully we have some good news and a reversal next week so I avoid a margin call on my naked Puts.
maybe.. just maybe... the report wasn´t all garbage
and maybe a lot of negative sentiment comes from a pretty bad situation. i think its dangerous to fall into confirmation bias..
I thought we knew for a fact that this reporter previously used Mark Spiegel for a source? If so, then the likelihood of this report being garbage seems quite high.
JRP3
Hyperactive Member
Generally good to discount data from sources known to be inaccurate in the past. Especially when it seems to be nothing more than a new version of an old story.
Will you share the time associated with the X-Axis? What's the average time separation between adjacent highs and lows? Minimum and maximum time between adjacent highs and lows? In trading days would be most helpful though the 8%+ is certainly helpful.
The date isn't the problem. They expire in Jan 2019. The problem is the amount of margin you have to have in your account to back them up is around 3 times what they are worth, and what they are "worth" increases every time the stock price goes down. I sold a lot of Puts, so I need a lot of money to back them up, even if their strike price is 220 or 250.
The wording then indicates delivery of 20 (S+X+3) rather than 20 Model 3 per day.
The "per day" is now, though - I doubt he did 20 a day in January or February. The 3rd month of quarter must always be an interesting time at the delivery offices.
Reciprocity
Active Member
I feel your pain. I have been learning a lot recently myself. Its hard to understand until you actually experience it in real time. Its like a train crashing in slow motion. Some things I have learned:
1) Weeklys are dangerous. Never do out of the money weeklys, unless you specially know something or you have a spread trade that is betting both sides. To me a weekly is something that expires this week or next. You take less risk with ITM calls because the stock does not have to go up as much but you pay a premium the more "in the money" your weeklys are though so you are risking more if they expire worthless. Always be prepared to cut your losses early. Take profits on the way up and dont be afraid to cut bait quickly. You can also re-enter the trade once you have more direction.
2) Dont put all your eggs in one basket. If you are only working with one stock like TSLA, you can spread the risk around by buying weeklies, monthlys and leaps. You can play monthlys like weeklys. You just plan on closing them much earlier then the expirey date. This is safer but of course less upside. The safer you go the less your upside, but yeah. Monthlys also give you more ability to dollar cost average and take profits. I tend to sell half my position as it goes up and average down if the option drops in value 20% or more. I know that sounds crazy, why pour gas on the fire. But the short term volatility is not as much of a problem for longer term options IF THEY ITM. Thus I almost never buy OTM. One example I had was APPL. Recently dropped after a bad earnings a few months ago. I had April 20th 180 calls that where OTM when I got them. This was before I leanred my leason. BUT, I was still able to dollar cost average as the stock dropped to like 160. My cost went from $6 a contract to $3. And wouldnt you know, the stock was over 180 recently. That would not have been possible if the term was too short.
3) Which brings me to lesson 3. Be very careful what you hold right around earnings. These tech stocks can gap both directions and crush you right before expiry. Just be aware that you should trim your position, put on protection or take some action to protect yourself around earnings. This is particularly bad if you are a single stock person as you could be stranded. I got crushed during that same earnings issues on Google, FB and Apple, but apple and FB recovered in time. Google ended up a total loss. $5k. ALL BECAUSE EARNINGS. Google ended up recovering but I had 0 planning and they expired the week of earnings. The sad part. Those same options where up before earnings and I should have trimmed and put on protection. Lesson learned.
4) It does not hurt to buy some puts to offset some of the risk. This is an area that I have been working on a lot lately. I feel like I need to be as proficient with Puts as Calls because there will be opportunities where the market is just messing with you and you gotta be able to protect yourself even if it costs something. Think of it as insurance. I actually always do short term puts and much smaller plays, almost like buying insurance on your car. It does not cost nearly as much as the car you are insuring but it can give you a huge amount of protection. I am still trying to refine my strategy so I would love any kind of input, but in general I might enter and exit those puts in the same day they tend to be smaller weekly bets and they can be in completely different stocks. For example if you are trying to hedge against macros, you might chose $SPY. If you are hedging against Tech then maybe $QQQ works. These are great because they are cheap and have a lot of volume so you can get in and out very quickly. You might ask why hedge against tech? The first time I tried trading options was late last year when the "Great Tech rotation" happened. I call it that, but basically Tech had gotten way ahead of the market and one week decided to dump and rotate into financials or something. Well, smart new options trade me, was holding many large out of the money weekly options. It was not pretty. But luckily, the market giveth as much as it taketh so its just critical to manage risk.
5) if you are just playing one stock. Spread your money out over different duration of options. You can play monthlys like weeklys where you only intend to hold them for 7-10 days, so you can buy new monthlys every week at different price targets. Obviously this does not protect if you the stock goes belly up. Not an advice.
So quick cheat sheet:
1) ITM only, play weeklys smaller and never around earnings unless you understand you could lose everything or put on some protection.
2) Monthlys should still ITM or at the money. Dont be afraid to dollar cost average, though I suggest 20% losses before doing it. As a matter of fact, assume you will need to and buy more later and start with a smaller position. You can always add to it later. TSLA is a great example of being able to add on the dips.
3) Stay clear of earnings. You are not good enough to make money of earnings. Even call/put spreads can bite you and become losses on both sides. I think a better option is small put positions for protection. They are simple, you can get in and out quickly and you risk small amounts, like insurance on your car. You can use any proceeds to dollar cost average your longer duration options.
4) You dont have to buy puts on the same stock for protection, you can buy calls or puts on $SPY or $QQQ to hedge. I am sure there are others that would work, its more about your comfort level.
This is what I have learned in 6 months that would have never learned reading a 100 books. You just have to experience somethings to understand how painful hey are.
bdy0627
Active Member
Well, there are several things I'm keeping an eye on to try to predict the stock movement. One is the VIN registrations. I've been keeping an eye on that but it's been stagnant for quite a while, yet the stock has continued its up and down pattern. It looks like there are suggestions of a jump in production recently. If the suggestions grow stronger then I think we have a catalyst for the stock to climb again soon. It has been doing that regularly on rumors/anticipation of ramp progress even though in hindsight there really wasn't much progress. What seems to happen is the market anticipates ramp progression, positive sentiment develops, and the stock goes up. It often goes up 10%+, and then the market realizes there is no clear indication of ramp progress, so the stock goes back down. Sentiment turns overly negative, as it is now, and the stock often goes down 8%+. The market then realizes the ramp is going to likely progress soon, and resorts to buying the stock again (with shorts covering.) This is why the stock will likely climb again very soon even in the absence of good news.
The stock pattern over the last year has been consistent enough that I am primarily using it as a means of altering my leverage, trying to keep emotions and reactive guessing out of my trades as much as possible. I have to admit that I expected a reversal on Friday into close, with quite possibly a green candle. The dip near close surprised me. If it was an unusual afternoon due to manipulations resulting from Triple Witching day, then I would expect the coming week to be solidly green, following the usual pattern. The stock often likes to reverse after being pushed down well below a support level, and when it reverses it often does so dramatically. I thought we would see that on Friday, but instead we got a wishy-washy red day again because of the afternoon drop.
So, where do we go from here? I believe the bottom is near in terms of trading days but not necessarily in terms of the share price. I'm an amateur with technicals, so keep that in mind, but I do like to consider them. The stock has held up well at $321 but that keeps getting tested. Assuming no positive news this weekend, I think it will get tested again and may very well fail. Shorts continue to have success lately. Once it fails, stops would get triggered and the stock may drop a surprising amount. The moving averages are above us, so not there for support. The lower bollinger band historically can be violated dramatically but only for a day or 2. Even if the stock would somehow plunge to $300 or below, it is very likely to pop back up to the lower bollinger band, which would probably be around $310 or so at that point. I think it would be very likely to then rise or consolidate for a few days around that level. So, if we don't go up from here then I think we could find ourselves around $310 over the next few trading days based upon the chart. I'm going to continue this in another post since it's getting long.
bdy0627
Active Member
We recently went up 8.1% to $347 over 3 trading days from a local low of $321. Now we have come back down 8.1% from there, over 4 trading days, to a local low of $319. Here's my spreadsheet on the stock's pattern since May 2017:
Notice the small number of trading days it generally takes to go from peak to dip. The average is 8 for a dip and 10 for a climb. Something also to keep in mind on the current dip is that we are not coming down from anywhere near the ATH. We are dropping from a pretty modest local peak of $347. The three big dips of 21.5%, 19.6%, and 18.3% came down from $386, $363, and $359. The one from $359 occurred during a significant market correction or it would have likely been less of a dip. We came down from $347 twice before on dips of 10.4% and 12.1%. Those bottomed out at $311 and $305.
We have already seen $319 on this dip. If we do drop to $310 or below, I would be inclined to apply full leverage, anticipating a climb of at least 9% and possibly a lot more within several weeks. I do not see a need to focus on LEAPs at such a level, though they do offer more safety. ATM May and June calls are what I will probably focus on if we do see that level.
Notice the small number of trading days it generally takes to go from peak to dip. The average is 8 for a dip and 10 for a climb. Something also to keep in mind on the current dip is that we are not coming down from anywhere near the ATH. We are dropping from a pretty modest local peak of $347. The three big dips of 21.5%, 19.6%, and 18.3% came down from $386, $363, and $359. The one from $359 occurred during a significant market correction or it would have likely been less of a dip. We came down from $347 twice before on dips of 10.4% and 12.1%. Those bottomed out at $311 and $305.
We have already seen $319 on this dip. If we do drop to $310 or below, I would be inclined to apply full leverage, anticipating a climb of at least 9% and possibly a lot more within several weeks. I do not see a need to focus on LEAPs at such a level, though they do offer more safety. ATM May and June calls are what I will probably focus on if we do see that level.
bdy0627
Active Member
Just posted this in another reply, but here's the spreadsheet of data. Average drop is 8 days. Climb is 10. The average is only 5 days for a drop of 10% and 5 days for a climb of 10%. The longest it has taken over the past 10 months to rise 10% is 15 trading days.
Menifeer
Member
You didn't address one item. Selling options.
This week, about a dozen of my options (TSLA, et al.) expired worthless. But I was the seller in each case...
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