TSLA Market Action: 2018 Investor Roundtable

[KarenRei]

Oh my god. You... you mean self-described TSLA bears have a lower estimate of Tesla sales than a pro-EV blog?!?!?!? How can this be?!?!?

I know little about NMVTIS (and I imagine that the exact same thing applies to them) - e.g. how long it takes for VINs to show up after a sale (some quick searching shows that it's pretty laggy, and then there's the fact that Tesla can take weeks to get registration packets out to people), etc. But even ignoring that sort of stuff, there's one gigantic glaring problem:

Not All Model 3s Sold Thusfar Have Been In The US.

Unless Canadian VINs go into it or something...

 

[lklundin]

OT.... having trouble not informing people... I really will try to stop being helpful now...


There is a big difference between efficient markets *theory*/*hypothesis* (which is false) and the efficient markets *theorem*. Let me explain.

Here's the *theorem*...
* IF everyone has the same information,
* AND everyone has the same ability to analyze the information,
* AND everyone has the same market power (this is basically monopoly-type power),
* THEN nobody would be able to beat the market.

This is, of course, true -- it's been proven mathematically.

However, the premises are blatantly false. Everyone has different information, different abilities to analyze it, and different amounts of market power. (The efficient markets *theory* claims that the premises are true, which is ridiculous.)

Using the contrapositive, we find that,
* IF someone can beat the market, then
* EITHER they have better information,
* OR they have better ability to analyze information
* OR they have more market power

Retail investors never have market power. So the only way retail investors can ever beat the market is to have better information or better analysis of it. Which is an interesting clarifying point when investing: if you think you have a way to beat the market, ask yourself "What do I understand that most of these yahoos don't understand?" If you can't think of anything, you don't have a good investment.

The above reasoning seems to be that because counter examples are abundant, then the hypothesis is useless.

Even if such reasoning was not intended, I will provide an argument against it.

Any hypothesis has (unlimited) limits to its applicability. A good example is Newton's laws. High school student all over the world have conducted experiments where the outcome was predicted by e.g. Newtons 2nd law, and they have seen that the prediction held to within their measuring accuracy.

Yet, lots of (certain) real world phenomena exist that Newton's laws fail to predict. It turns out that for phenomena involving speeds that are a significant fraction of the speed of light, Newton's laws fail to predict what happens - and increasingly so for increasing speeds.

Still, for almost any Earthly event involving motion these laws are entirely adequate.

Somewhat similarly, one can argue that the efficient Market theory can to some extent make useful predictions. This theory has clear exceptions to its usefulness and worse, they can not be accurately described.

But this is not equivalent to the theory being useless or false.

A better analogy could be numerical weather forecasting. This also fails spectacularly at times, but on the whole it is still useful - with a serious, ongoing effort to characterize exactly what the boundaries for its usability is, since lives may depend on that.

 

[MarcusMaximus]

I know little about NMVTIS (and I imagine that the exact same thing applies to them) - e.g. how long it takes for VINs to show up after a sale (some quick searching shows that it's pretty laggy), whether all VINs go in the database or not, etc. But even ignoring that sort of stuff, there's one gigantic glaring problem:

Not All Model 3s Sold Thusfar Have Been In The US.

Unless Canadian VINs go into it or something...

Aren’t InsideEV’s estimates for US only?

 

[tivoboy]

More leverage gets you more theta, too.

Have confidence man (maam too), Ice Cube's a pimp!

 

[EVNow]

I posted this yesterday regarding the S&P 500, but it may be even more relevant today:

Other thing is - what will happen during the Christmas week. Will there be a $30 drop on low volume like it happened during the Thanksgiving week ? This is what is preventing me from building my position now for Jan/Feb.

 

[KarenRei]

Aren’t InsideEV’s estimates for US only?

Good point. But the delay issues still stand. Vehicles aren't registered immediately. It's weird that these same people have been making fun of how long it takes Tesla to get people their documents but are assuming that vehicles should be instantly registered. And then who knows how long after that it takes for a VIN to show up in queries.

Their graph shows about a 4 week lag.

 

[AlexS]

So let’s just plan on next Friday being close to max pain again and trade accordingly

Yesterday max pain was $345. It seems that, if your open yesterday was worth more than it would be if expiring at max pain, it would have been good to sell. We often think of max pain from the perspective of what it means to stock price. But it seems it could be even more valuable to look at it as a strategy for closing an option prior to expiration. Now if a bunch of options that were set to lose value if the price settle near max pain had in fact been closed, that would have shifted the max pain point up. So perhaps there is some sort of equilibrium to be had in this. So as of yesterday, there were far too many open call options above the pain.

345 is the Max Pain for next week based on yesterdays numbers. should look on Wednesday what Max is telling

@jhm your number is for next week check your link carefully there is a date

 

[KarenRei]

New conversation

• 
  zdriver‏ @zdriver4 12m12 minutes ago
  Replying to @TeslaCharts @WSJ and
  Uh, you realize NMVTIS data is incredibly laggy, right? It doesn't update immediately upon a sale.
  
  3 replies0 retweets3 likes

• 
  TeslaCharts‏ @TeslaCharts 10m10 minutes ago
  I know more about this than you do
  
  1 reply0 retweets10 likes

• 
  zdriver‏ @zdriver4 6m6 minutes ago
  Bought a Model 3 pretty recently, did you? Otherwise you don't, because you'd understand that Tesla has been pretty slow on even getting registration packets out to people. Took nearly 4 weeks to get mine - can't do anything at the DMV until you have that.
  
  3 replies0 retweets4 likes

• 
  TeslaCharts‏ @TeslaCharts 5m5 minutes ago
  I know WAY more about this than you do
  
  1 reply0 retweets11 likes

• 
  zdriver‏ @zdriver4 2m2 minutes ago
  Then please, explain how my explanation is wrong. Go on...

 

[MarcusMaximus]

Good point. But the delay issues still stand. Vehicles aren't registered immediately. It's weird that these same people have been making fun of how long it takes Tesla to get people their documents but are assuming that vehicles should be instantly registered. And then who knows how long after that it takes for a VIN to show up in queries.

The lag they’re citing is also ~1.5 months. I’m totally unclear on what nefarious motives they think exist for delaying registration in that database by that amount.

 

[AlexS]

So here's the super-hyped TeslaCharts FUD for the day:

We were all waiting with bated breath

Anyway they made a lot of people shaky shaky. I also re-positioned some calls, thank god I didn't close any position, just moved a bit.

 

[jhm]

345 is the Max Pain for next week based on yesterdays numbers. should look on Wednesday what Max is telling

@jhm your number is for next week check your link carefully there is a date

Ok, thanks. No one noticed this yesterday when it was posted. So what was max pain going into this Friday?

 

[AudubonB]

a Question for you MaxPain folks: Do I understand this correctly, and are the points of my thesis then sound?

• MaxPain demonstrates where MarketMakers will most easily (cheaply) satisfy the expiring puts and calls (T/F?)
• Therefore, it behooves them to Make The Market as close to the MaxPain point as possible, right at 4pm Friday (T/F?)

AND THEREFORE -

• That closing stamp is "artificial", in that it does not truly represent what buying and selling investors consider a market-clearing price (T/F?)
  • And to test whether or not the preceding is correct, then
    • Once we're into AfterMarket trading, the price naturally will tend to shift upwards or downwards to a "true" market-clearing price. (T/F?)

As I write this, today's chart shows a consistent rise upwards from that Close-to-MaxPain level. I've not gone back to other Fridays to see other examples.


??????????

 

[AlexS]

Ok, thanks. No one noticed this yesterday when it was posted. So what was max pain going into this Friday?

360

 

[jhm]

360

Thanks. So my comments still hold if you replace $345 with $360.

 

[EVNow]

New conversation

• 
  zdriver‏ @zdriver4 12m12 minutes ago
  Replying to @TeslaCharts @WSJ and
  Uh, you realize NMVTIS data is incredibly laggy, right? It doesn't update immediately upon a sale.
  
  3 replies0 retweets3 likes
  

• 
  TeslaCharts‏ @TeslaCharts 10m10 minutes ago
  I know more about this than you do
  
  1 reply0 retweets10 likes
  

• 
  zdriver‏ @zdriver4 6m6 minutes ago
  Bought a Model 3 pretty recently, did you? Otherwise you don't, because you'd understand that Tesla has been pretty slow on even getting registration packets out to people. Took nearly 4 weeks to get mine - can't do anything at the DMV until you have that.
  
  3 replies0 retweets4 likes
  

• 
  TeslaCharts‏ @TeslaCharts 5m5 minutes ago
  I know WAY more about this than you do
  
  1 reply0 retweets11 likes
  

• 
  zdriver‏ @zdriver4 2m2 minutes ago
  Then please, explain how my explanation is wrong. Go on...

Here's my reply.

ps : Just to make sure people get it, this is what Trump said about Climate Change recently.

 

[MarcusMaximus]

View attachment 361022

For a person with such a high level of intelligence, they seem to have a lot of difficulty constructing a sentence.

 

[oneday]

a Question for you MaxPain folks: Do I understand this correctly, and are the points of my thesis then sound?

• MaxPain demonstrates where MarketMakers will most easily (cheaply) satisfy the expiring puts and calls (T/F?)
• Therefore, it behooves them to Make The Market as close to the MaxPain point as possible, right at 4pm Friday (T/F?)

AND THEREFORE -

• That closing stamp is "artificial", in that it does not truly represent what buying and selling investors consider a market-clearing price (T/F?)
  • And to test whether or not the preceding is correct, then
    • Once we're into AfterMarket trading, the price naturally will tend to shift upwards or downwards to a "true" market-clearing price. (T/F?)

As I write this, today's chart shows a consistent rise upwards from that Close-to-MaxPain level. I've not gone back to other Fridays to see other examples.


??????????

I think this is all correct. However, the only thing I question regarding this with my limited understanding of options is that you actually have until Saturday to close out the options. So perhaps, the after hours theory is not correct but in general I think you are correct.

Disclaimer: I know very very little about this, probably not even enough to do as much option trading as i do

 

[anthonyj]

a Question for you MaxPain folks: Do I understand this correctly, and are the points of my thesis then sound?

• MaxPain demonstrates where MarketMakers will most easily (cheaply) satisfy the expiring puts and calls (T/F?) MM writes Calls/Puts in hopes of them expiring worthless, so prices gravitate towards the middle of the highest # of Calls/Puts
• Therefore, it behooves them to Make The Market as close to the MaxPain point as possible, right at 4pm Friday (T/F?) True, my favorite example is 10/19/2018 when they moved the price $2 to exactly $260.00 at the literal very last second (3:59:59). There are times where Max Pain doesn't apply, such as ER or big news.

AND THEREFORE -

• That closing stamp is "artificial", in that it does not truly represent what buying and selling investors consider a market-clearing price (T/F?) True, see above
  • And to test whether or not the preceding is correct, then
    • Once we're into AfterMarket trading, the price naturally will tend to shift upwards or downwards to a "true" market-clearing price. (T/F?) True, as we can see right now or last Friday AH

As I write this, today's chart shows a consistent rise upwards from that Close-to-MaxPain level. I've not gone back to other Fridays to see other examples.


??????????

 

[anthonyj]

I think this is all correct. However, the only thing I question regarding this with my limited understanding of options is that you actually have until Saturday to close out the options. So perhaps, the after hours theory is not correct but in general I think you are correct.

Disclaimer: I know very very little about this, probably not even enough to do as much option trading as i do

Options expire at 4pm Fridays. They can only be sold or executed during market hours

 

[hobbes]

Might have been posted already, might not - Now official: China in fact will roll back tariffs from 40% to 15%.

China agrees to lower import tariff on US cars for three months