TSLA Market Action: 2018 Investor Roundtable

[Hogfighter]

Question for you Options Pro's out there. What is the best LEAP to purchase when the SP gets low? I've been buying ATM LEAPs, which price seems to go up at just over half the amount of the stock increase. For example, I bought Jan '19 300's when the SP was at 303 for $53. Since then the SP climbed 17, but the LEAP has only gone up 10.

I'm looking for an option that goes up closer to the amount of the underlying stock, without going too far ITM. Thoughts?

 

[myusername]

Baird believes that Tesla could eventually sell more than 500,000 Model 3s annually. That would put it squarely among the nation's top-selling vehicles.

-- Baird reiterated an "outperform" rating on the shares. It has a $411 price target on the shares, roughly 30% above current levels.

someone forgot to inform Fidelity:

https://www.nasdaq.com/symbol/tsla/institutional-holdings

 

[Curt Renz]

someone forgot to inform Fidelity:

Tesla, Inc. (TSLA) Institutional Ownership & Holdings

A fund's internal rules normally require rebalancing when a stock grows to become too large a portion of its portfolio. Despite disposing some TSLA shares last year, Fidelity (FMR) retained the large majority of its TSLA holding and remains the largest institutional owner of TSLA.

 

[TheDoktor]

A fund's internal rules normally require rebalancing when a stock grows to become too large a portion of its portfolio. Despite disposing some TSLA shares last year, Fidelity (FMR) retained the large majority of its TSLA holding and remains the largest institutional owner of TSLA.

You are correct, but it doesn’t look like that is what’s happening, given that the SP has been pretty much range bound for the past few months and given the size of the decrease (>14%). They aren’t dumping it, but are likely trimming to resize downwards

 

[Reciprocity]

A fund's internal rules normally require rebalancing when a stock grows to become too large a portion of its portfolio. Despite disposing some TSLA shares last year, Fidelity (FMR) retained the large majority of its TSLA holding and remains the largest institutional owner of TSLA.

TSLA is featured prominently in Fidelity's best performing Mutual fund in my 401k, FSPTX. Last I checked it was like 5th or 6ths and around 4% of the entire fund, so it makes sense that it would need to be re-balanced. This fund has been very high performance, but I tend to sell it when it gets to toppy and jump back in after a decent sized retreat. Usually 2x per year.

 

[Tslynk67]

My 15 year old son proudly turned years of small gifts and money scraping accumulated in his savings account into two (2) TSLA shares this morning.

That boy has a bright future!

Isn't it always said that the way to retire by the age 30 is to regularly invest 10% of your net income? Something like that.

$TSLA going against the tide today, it's on these contrary days where $TSLA often does well.

 

[Starno]

That boy has a bright future!

Isn't it always said that the way to retire by the age 30 is to regularly invest 10% of your net income? Something like that.

$TSLA going against the tide today, it's on these contrary days where $TSLA often does well.

Also often time when general consensus (of the day-week) here is that TSLA is in trouble, usually it does fairly well. And that's when people start to predict : shorts are about to cover/ ATH is in sight in the next few weeks. That's when TSLA goes down.

 

[Tenable]

Also often time when general consensus (of the day-week) here is that TSLA is in trouble, usually it does fairly well. And that's when people start to predict : shorts are about to cover/ ATH is in sight in the next few weeks. That's when TSLA goes down.

Whenever TT007 begins to tell us about his retirement plans, I start to trim positions. Probably the most consistent trading indicator I've found in the market. Kind of an advice jk

 

[bdy0627]

Whenever TT007 begins to tell us about his retirement plans, I start to trim positions. Probably the most consistent trading indicator I've found in the market. Kind of an advice jk

I hate to say it because I love his enthusiasm for TSLA but I think statistically you're right. Early on, I increased leverage when he came to the forum talking about how the stock was ready to fly the next day or the day after. That didn't work out well at all for me. I'm not blaming him one bit. It was totally my own call. Now, I just ignore it when he comes to the forum after a nice rise, talking about a huge breakout. It's usually already up 15%+ by then. I've sold most of my trading calls on the rise by the time he shows up here.

 

[bdy0627]

Question for you Options Pro's out there. What is the best LEAP to purchase when the SP gets low? I've been buying ATM LEAPs, which price seems to go up at just over half the amount of the stock increase. For example, I bought Jan '19 300's when the SP was at 303 for $53. Since then the SP climbed 17, but the LEAP has only gone up 10.

I'm looking for an option that goes up closer to the amount of the underlying stock, without going too far ITM. Thoughts?

Use this calculator:
Long call calculator: Purchase call options
When figuring out what you want to buy, you need to have a stock price in mind at a certain time in the future. Premiums went through the roof with the massive volatility recently. They should start settling down now. I noticed that even with the stock's modest rise yesterday, all of my calls lost value, including ITM J19 LEAPs. Today, they are tracking more like they normally do. Currently, the stock is up about 1% and J19 $300 calls are up 3.7%. You should see your LEAPs generally go up or down at 2-3x the stock price movement. Things just got out of wack over the last week.

 

[Fifield]

Question for you Options Pro's out there. What is the best LEAP to purchase when the SP gets low? I've been buying ATM LEAPs, which price seems to go up at just over half the amount of the stock increase. For example, I bought Jan '19 300's when the SP was at 303 for $53. Since then the SP climbed 17, but the LEAP has only gone up 10.

I'm looking for an option that goes up closer to the amount of the underlying stock, without going too far ITM. Thoughts?

You could use the thinkorswim desktop software to get the information you need, and they provide a nice chart to compare all expirations and strikes. Go to Analyze, type in TSLA, then go down to Product Depth; eliminate the expirations series you're not interested in buying and select the information you need.

With options make sure you are buying when volatility is relatively low, and selling when volatility is relatively high, so Implied Volatility is important to consider. Also, selecting Delta will show you the expected move for every one dollar the stock price goes up (100% would be 1*$1 for every $1 move up in TSLA, 50% would be 0.5*$1, etc).

Hope this helps!

 

[bdy0627]

You could use the thinkorswim desktop software to get the information you need, and they provide a nice chart to compare all expirations and strikes. Go to Analyze, type in TSLA, then go down to Product Depth; eliminate the expirations series you're not interested in buying and select the information you need.

With options make sure you are buying when volatility is relatively low, and selling when volatility is relatively high, so Implied Volatility is important to consider. Also, selecting Delta will show you the expected move for every one dollar the stock price goes up (100% would be 1*$1 for every $1 move up in TSLA, 50% would be 0.5*$1, etc).

Hope this helps!

Thanks. That software sounds really helpful. I'm going to check that out.

 

[Hogfighter]

Thanks all...will look into it.

 

[Tenable]

Thanks all...will look into it.

Theres really no way to get a 1 to 1 move with options unless you're buying long term DITM, or buying very short term ITM. The market is built for risk vs reward. If we were able to get the same upside as owning shares without the same risk, I don't think traders would do anything else. Be very careful with options, this most recent dip reduced the value of my long term options by 45% at one point. The swings can be brutal. Best of luck!

 

[johnnybgood888]

Very nice day for TSLA, can we say that maybe the worse is over and Montana Skeptic has called the bottom?

 

[Tenable]

Very nice day for TSLA, can we say that maybe the worse is over and Montana Skeptic has called the bottom?

We can hope. The market seems to be setting up nicely, but only time will tell. I sold my 265 SPY weeklies today and purchased SPY 270 calls for next week. I'm positioning my money bullishly, but I hesitate to follow suit with my emotions.

 

[Reciprocity]

Wow, still ramping a bit after hours. Thanks @montanasceptic1 bottom!

 

[johnnybgood888]

We can hope. The market seems to be setting up nicely, but only time will tell. I sold my 265 SPY weeklies today and purchased SPY 270 calls for next week. I'm positioning my money bullishly, but I hesitate to follow suit with my emotions.

I came within a millimetre of getting a margin call last week, I will most likely be more conservative until we hit $3000.

 

[Reciprocity]

someone forgot to inform Fidelity:

https://www.nasdaq.com/symbol/tsla/institutional-holdings

Based on today's action, maybe they where buying the dip, just like the rest of us.

 

[bdy0627]

Very nice day for TSLA, can we say that maybe the worse is over and Montana Skeptic has called the bottom?

I think TSLA is fine as long as the market holds up. The market doesn't even half to go up as long as it doesn't dip further, since TSLA often goes up on ho-hum market days. In terms of the overall market correction, look for the so-called Follow-Through day, coming at least 4 days out from an attempted rally. Tomorrow is day 4 of this rally.

From IBD:
A follow-through day involves a big index gain in rising volume on the fourth day or later of an attempted rally.
Friday's action constituted Day 1 of an attempted rally. The indexes have to stay above their intraday lows in order for the count to continue.

In "How to Make Money in Stocks," IBD founder William O'Neil made this cautionary point: "There will be cases in which confirmed rallies fail. A few large institutional investors ... can run up the averages on a particular day and create the impression of a follow-through. Unless the smart buyers are getting back on board, however, the rally will implode."