Yes, the 420 secured caused a lot of damage to my OTM calls. You simply state you "weren't that stupid", but nobody could have seen that coming
As someone who was one of the few voices on this forum warning against irrational optimism when almost everyone here was talking about massive privatization-driven short squeezes, I would have to disagree with this statement. I was actually considering selling, but I took too long; had the price held for another day or two, I would have likely liquefied a large chunk of my TSLA assets.
Why?
First off, I was in disagreement about the potential / potential scale of such a squeeze. Note my sig; that replaced my previous sig arguing against the short squeeze exuberance. It caused quite a controversy at the time.
Regardless of whether people here agreed with me, Tesla bears certainly did not believe in any huge >$420 short squeeze. They saw $420 as a cap. The market clearly judged - despite people here investing at ~$380 - that there was ample probability for the deal to go awry (do I need to point out that as much as we may not like to admit it, they were right?).
We know how these things go. The bears' "
Tesla is burning cash and en route to failure" narrative was still very much alive and influential at the time. And in this regime, whenever any good news about Tesla came out, it always led to a bunch of armchair sleuths "figuring out the real reason why this couldn't be good news". These negative arguments then would get shared and amplified (including by mainstream outlets), and eventually take down any price spike. With a limited upside and significant potential to wear down optimism, I saw holding as a poor investment at that time.... under one condition: that I'd be able to get back into Tesla later.
This, however, was the issue: in the initial chaos, I
wasn't sure I'd be able to get back in before any privatization vote. I had no clue how long the timescales under discussion would be and any nuance that would be involved. It took me a couple days to get a handle on this, and decide that there was no immediacy. But by then the stock had dropped to ~$350, and shortly thereafter, ~$338. While that didn't convince me to go into a buying mode, it certainly took my interest out of selling.
But I can tell you this: I certainly had no interest in
buying at ~$380. Which positioned me as one of the more bearish members of this forum at the time - a somewhat odd position to be in. So when you argue that "nobody could have seen coming" a price fall, that's simply not true.
Just one example: let's say Q4 is NOT a beat, and is just break-even given some extra investments in China and let's say European gigafactories. Long term bulls could still applaud 'cause the stock retains its potential for growth. Short term option holders would be sugar out of luck.
Exactly. Short-term options are riskier. Which is why the premiums are lower and profit potential higher.
I've done enough profit taking to shore up my cash position for my non-investment needs. The rest that I've taken out is ready for new investment opportunities, and we're hovering near prices that I'd feel comfortable buying at. With this money, I'm looking to maximize probability-weighted profit potential, rather than to achieve guaranteed returns.
