TSLA Market Action: 2018 Investor Roundtable

[EVNow]

Being Assigned before would be bad, at a loss (but usually assignments will not happen) - most likely scenario will be to have to dig one self out of a hole by being more creative by rolling over and over. Just 5-10 days back SP was at 350, so I definitely would not sell calls at 340. ..~ cheers

Yes - I'm hoping SP will recover next week. After this EA, SP has fallen 2 or 3 times and recovered quickly.

BTW, how do you sell covered calls on a LEAP. Is this available for higher level option traders ? Or is it to do with ITM calls ?

 

[Cherry Wine]

Yes - I'm hoping SP will recover next week. After this EA, SP has fallen 2 or 3 times and recovered quickly.

BTW, how do you sell covered calls on a LEAP. Is this available for higher level option traders ? Or is it to do with ITM calls ?

I just learned that you could even do this today. My trading platform holds the LEAP as collateral.

 

[hacer]

...Based on today's close, if I were doing it now (can't - no dry powder), I'd buy the Jan '21 $250 for about $135 and sell the Nov 30 $340 for about $4.25. On Nov 30, I'd pocket the $4.25 if the share price is below $340 and do it again the next week. If the time value drops to $1, I'd roll it to something for the following week to avoid assignment (the strike would depend on what's happening with the share price).
...

If the Nov 30 is going to expire worthless then it is guaranteed to (at some point) pass through the time value = $1 point so unless you have some other unstated rule you would always roll. I expect that you do have some sort of other rule maybe that uses some judgement on price like your decisions on next week's strike does. Can you explain your rule for handling the < $1 time value as it nears expiration when the low time premium is not caused by being in-the-money?

 

[hacer]

↑
The US tax rules are why, perversely, it makes sense to buy and hold in after-tax accounts and engage in speculative frequent trading in retirement accounts. Kind of messed up but there it is.



"Speculative, frequent trading in retirement accounts" works as long as they are cumulatively net profitable. The miscellaneous deduction for a cumulative net loss in Roth IRAs is history. Loss on ROTH IRA in 2018 | Ed Slott and Company, LLC

"Conservative, buy-and-hold in retirement accounts" works as long as they are cumulatively net profitable.

 

[Buckminster]

I loved this though I know not of which you commentatith. Gentlemen, beware, there may be a giant treading among our weeds.

Prof - the 80s are the new 50s - you can always go back to school - never too late. Perhaps Ancient Greek?

Anyway, I'm in calls 100% so like to think I'm a bit an expert too. Gamma, delta and the rest of the alphabet all boil down to buy low, sell high - simples. I've just had an off year or two - nothing to worry about. Yup, nothing to worry about. I'll be fine.

 

[Buckminster]

This is in the summary of the US National Climate Assessment:

4. Actions to Reduce Risks
Communities, governments, and businesses are working to reduce risks from and costs associated with climate change by taking action to lower greenhouse gas emissions and implement adaptation strategies. While mitigation and adaptation efforts have expanded substantially in the last four years, they do not yet approach the scale considered necessary to avoid substantial damages to the economy, environment, and human health over the coming decades.
Future risks from climate change depend primarily on decisions made today. The integration of climate risk into decision-making and the implementation of adaptation activities have significantly increased since the Third National Climate Assessment in 2014, including in areas of financial risk reporting, capital investment planning, development of engineering standards, military planning, and disaster risk management. Transformations in the energy sector—including the displacement of coal by natural gas and increased deployment of renewable energy—along with policy actions at the national, regional, state, and local levels are reducing greenhouse gas emissions in the United States. While these adaptation and mitigation measures can help reduce damages in a number of sectors, this assessment shows that more immediate and substantial global greenhouse gas emissions reductions, as well as regional adaptation efforts, would be needed to avoid the most severe consequences in the long term. Mitigation and adaptation actions also present opportunities for additional benefits that are often more immediate and localized, such as improving local air quality and economies through investments in infrastructure. Some benefits, such as restoring ecosystems and increasing community vitality, may be harder to quantify.

Nothing much new and concrete - what is this - 1985?

This is better - buried in the 8th section of the 29th chapter (I kid you not):

Box 29.3: Reducing Risk
Through Climate Intervention
Climate intervention techniques (or 9 ). There are two broad categories of climate intervention techniques. One is carbon dioxide removal (CDR), which would reduce atmospheric CO2 concentrations by changing land-use and management practices to store carbon in plants, trees, and soils; increasing ocean carbon storage through biological or chemical means; capturing atmospheric CO2 through engineered chemical reactions and storing it in geologic reservoirs; or converting terrestrial 16 The second is solar radiation management (SRM), which would increase Earth’s regional and/or global reflectivity by, for example, injecting sulfur gases or other substances into the stratosphere or brightening marine clouds. CDR is estimated to have long implementation times, and while costs (and their uncertainties) range widely across different measures,134 it is estimated to be expensive at scale.10 Nonetheless, large-scale CDR can be competitive with more traditional GHG mitigation options when substantial mitigation is required, and therefore it is an element of many scenarios that feature deep emissions reductions or negative emissions. Its climate benefits are likely to be similar to those from emissions reductions since both strategies act through reduced atmospheric concentrations of GHGs. Studies point to the risks of reaching the limits of available land, water, or biogeochemical requirements of biomass-based approaches at scale sufficient to offset large emissions.13 ,16 ,99 ,135 ,136 In contrast to CDR, SRM strategies are estimated to be relatively inexpensive and realize climate benefits within a few years. They could be targeted at regional as well as global temperature modification137 and could be combined with mitigation to limit the rate or the peak magnitude of warming. However, SRM effects on other outcomes, including precipitation patterns, light availability, and atmospheric circulation, are less well understood. In addition, SRM would not reduce risks from increasing atmospheric CO2 concentrations such as 138 ,139 Moreover, a sudden cessation of large-scale SRM activities could lead to very rapid climate changes, although a gradual phaseout of SRM as emissions reductions and CDR are phased in could avoid these abrupt changes. As concluded in Chapter 14 of the Climate Science Special Report, “Further assessments of the technical feasibilities, costs, risks, co-benefits, and governance challenges of climate intervention or geoengineering strategies, which are as-yet unproven at scale, are a necessary step before judgments about the benefits and risks of these approaches can be made with high confidence.”9

But do you really expect the media to understand and disseminate this?

The media state the problems without the solutions:
Climate change 'will inflict substantial damages on US lives'

It's too easy to blame orange people - it's not their fault they are orange.

Which of these is correct?

1) Scientists are too dumb to realise that:
In democracies, the government is essentially reactive (biased towards the will of the people who vote for them). And therefore scientists need to appeal to the people (not bureaucratic governments with no money) with simple messages like:
a) Stop eating beef - this will help!
b) Sell ICE, buy EV - this will help!
c) Companies will then rapidly build solar panel farms that reduce the cost of electricity
d) Give money saved from a), b) & c) to tree planting charities

2) Scientists cannot say this because they fear the economy will tank.

3) Scientists (seeking popularity) don't want to say the unpalatable truth (umm - cheeseburgers) - leave that to the politicians to join the dots (absolved even when they continue to sit on their hands).

 

[peopleweb]

Chinese customers have begun to receive configuration invitations, have European customers started to receive them?

 

[WarpedOne]

No

 

[Buckminster]

Chinese customers have begun to receive configuration invitations, have European customers started to receive them?

Vincent tweeted that orders are being taken at a car show. Are they configuring online?

 

[peopleweb]

Vincent tweeted that orders are being taken at a car show. Are they configuring online?

Not just the auto show, the Chinese customers reservation model3 on the first day began to receive configuration invitations.

 

[avoigt]

Can't get enough of those....


18h18 hours ago
Lemur secured! Thank you @elonmusk and @tesla team — seamless home delivery of the mid-range Model 3 on Black Friday. No panel gaps and awesome quality on VIN 152xxx. How’s that @nealboudette & @nytimes? Cc: @danahull @tsrandall @Model3Owners And bye bye @Mazda 3 trade-in

Trekker56 on Twitter

 

[avoigt]

I've seen multiple hints that Panasonic is angling for a merger with Tesla. They did a very curious reorganization a while back, putting their entire worldwide battery business under their primary North American corporate entity -- and IIRC removing a bunch of other stuff (such as retail consumer product sales) from their North American corporate entity -- so that their North American corporate entity contains only products which Tesla might be interested in. This feels very much like angling for a merger. Both companies are relatively short on cash, so they may be aiming for a stock-for-stock merger of Panasonic's North American corporate entity with Tesla where Panasonic ends up with a hunk of Tesla stock.

You heard it here first.

Thats an interesting thought that deserves some more attention I believe.

I do agree that there are a few good points that makes such a move a possibility.

Tesla has integrated suppliers or started their own development and production and got rid of suppliers where they felt they can do that business better, faster, cheaper or more reliable.

Better in the sense of they can produce that part(s) with better performance, cheaper and most important get rid of a dependency that may hinder them to ramp production or taking a unnecassary risk. In some areas that has been a set back for a while where it took a long time to catch up e.g. Mobileye/AP.

In other they just bought the company because it has been of strategy importance for their growth e.g. Groman. Or they thought they can develop a 10 times better performing sub system like Nvidia's chip more tailored to their requirements which is strategic for Tesla to win with AP. Often there has been a different point of view what is possible and the right approach and strategy and Elon has then either simply fired the owner (Groman) or the company Mobileye. Most suppliers Tesla stopped working with have not agreed to build a system that is just tailored to Teslas needs.

Panasonic has been a strategic supplier and if you will also investor because Tesla would not have been able to build Batteries in the required masses and with lower costs than the industry without a company that brings the knowledge, financial power and plays according to the Tesla rules.

Since Batteries and Battery packs are a constant constraint for EV and Powerwall (industry & private) output which in my view also limits Solar Panel output (the real beauty comes only with the combination of solar & battery) it would be more than logic for Tesla to at least consider integrating Battery production fully. Panasonics larger profit comes now from Tesla so why not taking that part in-house?

Tesla is a unique company in the way they approach vertical integration to bring margin in-house as well as keep control of critical supply for their products. Batteries are the only piece left in the supply chain that have a critical importance for the success of Tesla but are not fully controlled by them.

Having now a decent company size and with constant creation of +CF and profits Tesla could indeed start to eliminate that last risk of their business and bring it together.

If we turn it around and think about what Panasonic is providing that Tesla after years of working closely together with them cannot there is nothing that I would call essential. Other people may add here as I am not an expert.

Also its been interesting to watch that Tesla with regards to Asia and Europe never really committed to any Battery supplier but is pretty vague with whom they intend to work together.

In terms of the impact on the SP I believe a merger or takeover will be a mixed bag. Shorts will call it another strategic mistake and compare it to Solar and that Tesla even today did not manage to build that business but just wasted investments and never got a pay back. So it may create a major short attack and depress the SP.

Bulls will call it a strategic and important step for the future growth and another moat but investors did not listen before to that argumentation and proved to be short sighted. In my view they are still today.

The media will call it another large not required investment that will bring Tesla into a money burning modus again not listening to the fact that a share exchange deal will not have a negative impact on cash flow or profits.

In my view it makes business sense but I am not sure if I should wish them to do it now.

 

[LST]

Honestly, I was tempted to share a different version, any other version, just because we have such a disproportionately massive, amazingly talented music scene here - but all anyone outside Iceland has ever heard of is Björk, Of Monsters and Men, and Sigur Rós

Yes, you are right, so share some unknown gems, please...And that i guess is true for a lot of places.. my hometown of Basel comes to mind, lots of super interesting bands / musicians, only a few are really getting the attention they'd deserve. sorry waaay OT, its the WE after all.

 

[homer214]

I’m trying to figure out the latest bear argument.

Seems like we are either back on 1. There is no demand (sales only in CA, price cut in China) or 2. VW/ Porsche is coming

Very weak. Kind of surprised that so many are still at it

Very weak indeed. Anecdotal online nonsense being peddled by FUDsters is one thing. What my eyes tell me in the Dedham delivery center - so jammed packed with buyers that they are delivering more and more vehicles to buyer homes - is another thing altogether. Q4 delivery numbers will continue to be impressive. Ditto for 2019 and beyond.

 

[Subhuman]

Aww, look who got a Washington Post story all to himself

https://www.google.com/amp/s/www.wa...r-massive-bet-against-elon-musk-isnt-helping/

I can’t wait for this guy to loose it all! I love how they protray him as the defender of the world.

 

[Words of HABIT]

My weekend musings on TSLA the last week.
No-one on this forum foresaw the spike to $366 and subsequent drop to $324 and posted it prior.
TSLA is often compared to FAANG stocks, or sometimes with Big Auto stocks, or sometime with indexes, depending on its performance and whether it fits their narrative. I see little correlation to either. TSLA is unique in it own right. I base this on the following charts. Note the time frame I picked is not important. The charts simply show that their is little correlation between TSLA and that of Indexes, FAANG or Big Auto.
Last Thursday and Friday's drop was simple a consolidation of strong 25% run up in the last few weeks, exasperated by an 8% drop in oil last Friday (which explains why F and GM bounced as it makes their bread and butter pickup truck more economical to operate = greater sales, and less realized savings for operating EVs compared with ICE).
To be fair, I too have made comparisons in the past, however Tesla is in a league all by itself.
I have no idea what TSLA will trade at next week, next month or next year. What I do believe is that the general trend for TSLA is up (that's were my money is).

Indexes:

FAANG

Big Auto

 

[X Fan]

I've seen multiple hints that Panasonic is angling for a merger with Tesla. They did a very curious reorganization a while back, putting their entire worldwide battery business under their primary North American corporate entity -- and IIRC removing a bunch of other stuff (such as retail consumer product sales) from their North American corporate entity -- so that their North American corporate entity contains only products which Tesla might be interested in. This feels very much like angling for a merger. Both companies are relatively short on cash, so they may be aiming for a stock-for-stock merger of Panasonic's North American corporate entity with Tesla where Panasonic ends up with a hunk of Tesla stock.

You heard it here first.

Recent tweets by Musk suggest that as things stand, future growth rate will be set by the rate at which Panasonic are prepared to install new lines. Musk would hate that. He like things vertical so Tesla calls the shots. A merger will allow Tesla to control the growth rate. I'm for it, even though I don't expect it to move the stock price in short term.

I agree and I know that Neroden (who I respect greatly for his acumen) speculated that Panasonic and Tesla are a merger candidate.

However, I just don’t see the Japanese allowing one of the showcase companies to merge (particularly if there is no risk of bankruptcy) with a foreign company.

Moreover, the Government has a fund that invests in Japanese companies but as importantly the political/business class jointly discourage foreign takeovers/mergers of their leading companies (the battery business would surely be viewed as one worth protecting).

FWIW: I’ve shaped this view from working in Japan for 7 years and having met many politicians plus senior leaders of their Corporate class (including Panasonic).

 

[Menifeer]

BTW, how do you sell covered calls on a LEAP. Is this available for higher level option traders ? Or is it to do with ITM calls ?

If you have been granted option trading authority, you should be able to write calls against Leaps.

It's all about being "covered" in the event of an assignment. The obvious way to be covered is to own the shares against which the calls are written. But another way is to be able to get the shares via an option (or Leap).

Your broker's main concern is that it not be in jeopardy if (in the case of selling calls) the price skyrockets and your account then can't afford to buy the shares to close the position (creating a "margin call"). The Leaps provide a the safety net for the broker and make them comfortable with allowing sale of the calls.

 

[KarenRei]

No-one on this forum foresaw the spike to $366 and subsequent drop to $324 and posted it prior.

Um... I did. Wish there was an easier way to search through this forum for all posts from a specific individual, because I made several public posts on this. I can in short order find a PM conversation with Bobo (who can confirm this), where I responded, when he asked me of my price targets:

As the market stands, I'm looking for more selling in increments starting from the mid $350s up and more buying starting from the mid $320s down

To be more specific: Apart from reducing some overexposure shortly after the Q3 report (I really exposed myself on those ~$250 prices, they were just too tempting!), I set sell points at ~$346, ~$354, and ~$362. (the ~$346 had already gone off before Bobo's message). After noticing how Tesla seemed to be functioning as a hedge against the macros, I boosted my buy targets from mid-$320s to around $330.

How did I arrive at this? Simple. Once the Q3 report had been priced in, there's been relatively little news expected in the pipeline that would alter the fundamentals. Just random positive and negative news. So once you feel you have a handle on the average that prices are going to be fluctuating around, and a handle on how intense the volatility will be around that average, you should buy the lows and sell the highs. You then look at how much time is left before you expect any news that will have a long-term impact on the moving average to get a sense of the likelihood of hitting particular highs or lows.

Note in my sig: "Hooray for volatility!"

Full disclaimer: Past performance is no guarantee of future results. Also, I expect a lot more "timing-unpredictable" news in Q1.

 

[KarenRei]

** Really exposed myself "by my standards", which is still having ~$170k free cash. But I have a house construction project ongoing, still with plenty of bills to come, and unlike other people here, I have no interest in risking my house on an investment.