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ruralectric
Member
I was recently told by a Tesla sales rep that they will notify reservation holders when they hit US 200K. Why wouldn't they?
I don't think it's required to tell reservation holders (although it might be good advertising). I think the requirement to tell would only kick in when the credit begins to taper.
But I think you would need to tell investors, as it would be material.
That certainly makes sense, as a selling lever. Ramps up the urgency feeling on the buyer. And in this case, all the doom, gloom and FUD articles that would arise ("Tesla has run out of gubmint free money!") would actually be free advertising to "Get yours NOW!!".
jhm
Well-Known Member
Just to add to the value of a reservation discussion.
Consider the cost of a $20k reservation for a Semi. At 5% interest, this is an interest expense of $2.74 per day.
Consider the benefit of saving 25c/mile in operating cost. At 400 miles per day, this is a savings of $100 per day.
So the value of reducing your time to delivery by one day is over $97. Once the Semi is in production and the per mile savings is confirmed, then reservation will hold enormous value. A 12-month back log at 50k/year seems plausible to me, and this would command some $1B in deposits. Even if a reservation holder waits one year for delivery, that only adds $1k to a $180k purchase and helps avoid waiting another 6 months to a year beyond that which would miss out on $18k to $36k in savings.
Right now, however, there is much uncertainty about how long it will take Tesla to start production, whether the product will truly perform economically, whether better products will be introduced sooner, and even the risk of Tesla bankruptcy. Apparently these risks are enough to hold the value down to about $20M in deposits, but as Tesla makes progress on this product total Semi deposits should grow maybe to as much a $1B.
So I guess if anyone buys this argument, they could make the investment today in a Semi reservation and try to sell when production has begun and total Semi reservations deposits shoot up to $1B. You could scalp it for $18k to $36k above the initial $20k deposited. Of course, this is not advice.
Consider the cost of a $20k reservation for a Semi. At 5% interest, this is an interest expense of $2.74 per day.
Consider the benefit of saving 25c/mile in operating cost. At 400 miles per day, this is a savings of $100 per day.
So the value of reducing your time to delivery by one day is over $97. Once the Semi is in production and the per mile savings is confirmed, then reservation will hold enormous value. A 12-month back log at 50k/year seems plausible to me, and this would command some $1B in deposits. Even if a reservation holder waits one year for delivery, that only adds $1k to a $180k purchase and helps avoid waiting another 6 months to a year beyond that which would miss out on $18k to $36k in savings.
Right now, however, there is much uncertainty about how long it will take Tesla to start production, whether the product will truly perform economically, whether better products will be introduced sooner, and even the risk of Tesla bankruptcy. Apparently these risks are enough to hold the value down to about $20M in deposits, but as Tesla makes progress on this product total Semi deposits should grow maybe to as much a $1B.
So I guess if anyone buys this argument, they could make the investment today in a Semi reservation and try to sell when production has begun and total Semi reservations deposits shoot up to $1B. You could scalp it for $18k to $36k above the initial $20k deposited. Of course, this is not advice.
Pollution. By the time EV's rule the planet, the grid will be mostly based on renewables - already going that way in many parts of the world.
Pollution will become as socially unacceptable as smoking or drink-driving is today.
K_Dizzle
Member
there is a lot of money to be made in Tesla options, selling them
For starters, you're on the wrong side of the spread.
Here I thought I did enough studying about options, but apparently not.
Let's hope. We need to educate our youth early on about recycling, climate change, pollution, etc., so that it becomes a habit at a young age. I thought I saw it happening when I was teaching Junior Achievement about 15 years ago, but now when I see what some of my young neighbors are throwing away rather than recycling, it makes me wonder. While I love Amazon, the amount of cardboard and packaging they use that just gets tossed concerns me. They have made some changes, especially with their padded plastic envelopes, they need to work out an incentive program for reusing or recycling their cardboard. At least they don't use styrofoam peanuts any more.
bdy0627
Active Member
The stock has been stagnant lately. It's likely due to lower implied volatility plus the difference in the spread. I wouldn't worry about a J19 at this point personally. What was your forecasted price for the stock at what date when you bought the option?
I suggest buying shares of the stock instead. Price risk remains, but none of the losses due to time decay and implied volatility changes while owning options. Retail buyers of options generally lose, often quite heavily. They get scalped by the hedge fund managers and market makers that write (initially sell) the options.
bdy0627
Active Member
Also wanted to say that this isn't due to time decay, which is pretty minimal for a J19. It's due to reduced volatility.
Or you can consider using spreads so what you lose on the vol/time decay on one side you partially recoup on the other, at the cost of giving up some profit.
There is an active CDS market so if you did this on a large enough scale it might be worth looking at whether you could economically hedge the credit risk.
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