TSLA Market Action: 2018 Investor Roundtable

[TradingInvest]

For most people, I think being conservative on your investment approach can help to get good result.

 

[bdy0627]

I had once the same opinion but since about a month it changed. Electrek is not any more what I would call a balanced and on facts based media for me. At least as of now. I followed them since years and did listen to almost every weekly podcast. IOW there is a lot of material I can relate to.

Since a while Fred tend to post headlines that look like hit pieces. Fred's reasoning is lately very much driven by personal points of views and information without source but just hearsay or his believe.

Also some information they posted could be proven to be wrong with a quick internet search. Finally they blocked a couple of members of TMC that I recognized as balanced and down to earth.

Last not least there seem to be a tendency to bring everything out as quick as possible instead to do some thorough decent research first. That research is what I expect from a decent journalist or blogger. For me the one or the other is not different. I don't give a blogger a free pass just because he is a blogger.

Finally if you write something that was proven to be wrong I expect that people are mature enough to acknowledge it and say it loud and clear. I did not hear that one time from Fred.

So, to summarize Elektrek has been pretty disappointing for me lately and I hope Fred and Seth find a track back to their previous good work.

He's got his model 3 now, so perhaps his mood will improve towards Tesla again.

 

[generalenthu]

Shortsville Times:
Plane crashes into a Tesla Model X. Autopilot functionality under investigation.

Plane Crashes Into Cars on Texas Street; Multiple Injuries: Sheriff - Breaking911

 

[tivoboy]

I'm slightly confused. Are you saying you'll close your options position before your stock is called away?

If you hold your position to expiration: I think it's possible, but unlikely, to see a close below $292.50 on Friday; the indicators are against it.

So I'm guessing they'll be called and you'll make money on it. If the stock's over $304 at close Friday, you lose money, but that seems unlikely to me.

If I'm understanding it correctly, you sold calls for a premium of $11.50 at a $292.50 strike, so if the stock closes at $299 on Friday, your stock gets called away at $292.50 but you can buy back the stock at $299, for a theoretical instant loss of $6.50 on the stock vs. a gain of $11.50 on the option == gain of $5. (Though if your stock was held long term you lose your holding period, which is actually the reason I don't screw around with covered calls except on stock I plan to sell anyway.)

My experience is that the call buyer isn’t interested to take assignement if they are at a combined loss ( strike plus ( new capital inlay) plus the price they paid for the option is less than or equal to the current - or expected trading pirice). I’ve had it happen once in the past five years. If we are under 304$ at that point they are better of just buying the stock. If at that time they still want to take a position. If it’s even a few cents above that I’ve had it ALSO not be assigned. At that point they might think they could get it for less. I would.

So it’s not a done deal but the probability is low IMHO and experience.

 

[BenPrice]

It looks like that's not an option for about ~30m shares short interest: those are the "permashorts" who kept their short position open for 1-2 years, while the stock was in the $250-$380 range.

Another weird thing is that only about half of the 35m short interest seems to have deep out of the money long term call option hedges. The convertible notes offer about 2.5m more hedges in principle.

How is the rest, more than 10m TSLA short position protected against sudden rises? If they are truly non-hedged and leveraged, that seems awfully risky to me.

I don’t know that we will ever get the big squeeze

But we have to be nearing the end for some players. If USA LR/AWD 3 is successful then Europe, then SR, then Y.

It’s just too much. It’s over 12 months of demand > supply for no real capital, without even trying yet.

I have 50 oct 12 400 calls among my fun. I think it will squeeze up slowly from the first Tuesday of October until Thursday/Friday, perhaps as high as 440. I think then we get to live 360-480, until Shanghai or energy services expands revenue in such a manner as the 3 is proving this quarter.

I call it my Tesla bet.

If I’m right 100% will buy a new model x, income tax and all.

I believe the loaded spring under us is about to show itself.

I believe we will gap up before Q3 earnings. I believe the opposition desperation shows this. I believe the giant variety of Tesla’s investors will understand the safe growth ahead of them, and I believe a percentage of the short side will release the spring, at least somewhat. And those douche bags have annoyed my life long enough that I’m taking an extra 100k off of them.

 

[neroden]

My experience is that the call buyer isn’t interested to take assignement if they are at a combined loss ( strike plus ( new capital inlay) plus the price they paid for the option is less than or equal to the current - or expected trading pirice).

Weird. I mean, that's economically irrational. The call buyer should always, always, always execute the option if the strike price is below the aftermarket Friday price for which they can sell the stock, and collect the difference in price as an arbitrage gain. There is *never* any reason not to do this.

And the kicker -- the brokerages will actually *do it for you automatically* if you don't issue special instructions. On Saturday, they will execute options which were in-the-money on Friday close if you don't give specific instructions to the contrary. It's actually an options exchange *requirement* that they do so.

[I’ve had it happen once in the past five years. If we are under 304$ at that point they are better of just buying the stock. If at that time they still want to take a position. If it’s even a few cents above that I’ve had it ALSO not be assigned. At that point they might think they could get it for less. I would.

So it’s not a done deal but the probability is low IMHO and experience.

This implies to me that a lot of call buyers are even stupider than I thought they were. Making specific phone calls in order to avoid execution of options so that they can unnecessarily lose money?!?

Perhaps they're all wildly leveraged and can't actually afford to buy the stock (and sell it in the aftermarket)? But that would also imply wild stupidity on the part of the call buyers.

 

[tivoboy]

Weird. I mean, that's economically irrational. The call buyer should always, always, always execute the option if the strike price is below the aftermarket Friday price for which they can sell the stock, and collect the difference in price as an arbitrage gain. There is *never* any reason not to do this.

And the kicker -- the brokerages will actually *do it for you automatically* if you don't issue special instructions. On Saturday, they will execute options which were in-the-money on Friday close if you don't give specific instructions to the contrary. It's actually an options exchange *requirement* that they do so.



This implies to me that a lot of call buyers are even stupider than I thought they were. Making specific phone calls in order to avoid execution of options so that they can unnecessarily lose money?!?

Perhaps they're all wildly leveraged and can't actually afford to buy the stock (and sell it in the aftermarket)? But that would also imply wild stupidity on the part of the call buyers.

A lot can happen between Friday after the close and Monday. I wouldn’t want to take that additional risk if there was at the time zero economic benefit to me to take it. Especially with a high vol stock.

It does happen. And its also a reason why we often see a lot of selling on Monday’s at the open in various sttocks because call buyers have been assigned and want to be out of the stock.

It’s also more transactions. (Which is pretty trivial but still) but in this example they already have paid the 304$ for the stock. (Option premium plus the strike price.). If we are below that what is the gain

 

[TradingInvest]

I don’t know that we will ever get the big squeeze

But we have to be nearing the end for some players. If USA LR/AWD 3 is successful then Europe, then SR, then Y.

It’s just too much. It’s over 12 months of demand > supply for no real capital, without even trying yet.

I have 50 oct 12 400 calls among my fun. I think it will squeeze up slowly from the first Tuesday of October until Thursday/Friday, perhaps as high as 440. I think then we get to live 360-480, until Shanghai or energy services expands revenue in such a manner as the 3 is proving this quarter.

I call it my Tesla bet.

If I’m right 100% will buy a new model x, income tax and all.

I believe the loaded spring under us is about to show itself.

I believe we will gap up before Q3 earnings. I believe the opposition desperation shows this. I believe the giant variety of Tesla’s investors will understand the safe growth ahead of them, and I believe a percentage of the short side will release the spring, at least somewhat. And those douche bags have annoyed my life long enough that I’m taking an extra 100k off of them.

Fully support you. I hope it will happen as you planned, and more. In the long run I think Tesla is going a lot higher.

However, I guess you haven't lived through some of the pain that leveraged longs experienced in the past. You wouldn't believe how much money longs lost through margined long shares and options. Every time when we knew for sure things will go well, lots of members buy short term Calls and use margin, then suddenly there is a big pullback. Or like the recent case, suddenly there is a going private episode, then suddenly no more privatization... It's totally unpredictable. The only thing that is predictable is that 180 is lower than 280, and 280 is lower than 380. Buy low with new cash, I don't care what reason caused it to go down, (ok, I do look at the reasons).

Buying shares at attractive level then sit tight is a good way to do well and sleep well. Meanwhile save money like crazy, hopefully there is another buying chance when your cash is ready. Or like with Apple and Amazon, you will have numerous chances to keep adding in a 20 year span.

Every dollar lost in speculation is 20 dollars lost. Could have used the cash to sit on the shares.

Having said that, I'm bullish. I'm not the "short squeeze is imminent" bullish. I just think the company will likely to do great in the long run, with volatility in it's path.

 

[mongo]

It’s also more transactions. (Which is pretty trivial but still) but in this example they already have paid the 304$ for the stock. (Option premium plus the strike price.). If we are below that what is the gain

No one would buy a 292.50 call for 11.50 on Friday at 3:59 if the stock was trading below 304, but that's not the senario.

They paid 11.50 per share previously. Due to that, they can now buy shares at 292.50 regardless of the price (assuming it is above 292.50). So, if the stock is trading at 300, the gain is 7.50 a share (minus cost of trade) or >$700 per contract.

 

[Artful Dodger]

BREAKING: Shortsville Times

Texas Auto Dealers Association vindicated as Autopilot causes Tesla crash.

 

[BenPrice]

Fully support you. I hope it will happen as you planned, and more. In the long run I think Tesla is going a lot higher.

However, I guess you haven't lived through some of the pain that leveraged longs experienced in the past. You wouldn't believe how much money longs lost through margined long shares and options. Every time when we knew for sure things will go well, lots of members buy short term Calls and use margin, then suddenly there is a big pullback. Or like the recent case, suddenly there is a going private episode, then suddenly no more privatization... It's totally unpredictable. The only thing that is predictable is that 180 is lower than 280, and 280 is lower than 380. Buy low with new cash, I don't care what reason caused it to go down, (ok, I do look at the reasons).

Buying shares at attractive level then sit tight is a good way to do well and sleep well. Meanwhile save money like crazy, hopefully there is another buying chance when your cash is ready. Or like with Apple and Amazon, you will have numerous chances to keep adding in a 20 year span.

Every dollar lost in speculation is 20 dollars lost. Could have used the cash to sit on the shares.

Having said that, I'm bullish. I'm not the "short squeeze is imminent" bullish. I just think the company will likely to do great in the long run, with volatility in it's path.

Well said.

I’m envious - I’m ... I like the action. I wish I didn’t. I like playing poker too. I like feeling my heart beat through my chest when I place a big wager. It’s just how I’m wired. It’s not a problem, I’m otherwise financially responsible, but this is where I find happiness.

I’d rather play options with my entire non 401k and savings account portfolio. Diversity is 3 positions which change daily. I like it. I like that timescale of trading - the near term trend.

I’m not doing it to make money really. I’m doing it because it’s fun. But it’s nice to take the family on a surprise free vacation.

And I firmly believe if Tesla meets its guidance which is 80,000 deliveries (greater than 50,000-55,000 Model 3s - guided more delivered than made, and ~26,000 S/X), high ASP due to AWD, the inferred revenue and cash flow will cause a gap up which will close some % of pre-gap short positions causing more upward pressure. 2 Musks bragged about deliveries, one said double. Double is 82,000. That’s 6 bil in automotive revenue. It’s staggering QoQ growth.

If I’m wrong Tesla will still be fine - and if I’m right Tesla gets my money as a thank you.

 

[sundaymorning]

NYTimes, CNBC/CNN Front page, anyone?

LA family demands answers after parked BMW catches fire

Parked, turned off BMW catches fire, explodes in Los Angeles

BMW catches fire, causes $750,000 in damage - CityNews Toronto

 

[pz1975]

NYTimes, Front page, anyone?

LA family demands answers after parked BMW catches fire

Parked, turned off BMW catches fire, explodes in Los Angeles

BMW catches fire, causes $750,000 in damage - CityNews Toronto

They have no time to cover that when there is much bigger news like Elon taking a puff off a joint.

 

[TradingInvest]

......
And I firmly believe if Tesla meets its guidance which is 80,000 deliveries (greater than 50,000-55,000 Model 3s - guided more delivered than made, and ~26,000 S/X), high ASP due to AWD, the inferred revenue and cash flow will cause a gap up which will close some % of pre-gap short positions causing more upward pressure. 2 Musks bragged about deliveries, one said double. Double is 82,000. That’s 6 bil in automotive revenue. It’s staggering QoQ growth.

I believe the above numbers are expected by the market. Most people agree with those numbers.

Here is the current analysts' estimate on Yahoo:
Q3 revenue 6.06B earnings -0.45
Q4 revenue 6.74B earnings 0.74
2019 revenue 28.3B earnings 2.87
I feel their revenue estimate is pretty close. I guess Q3 will be slightly GAAP positive instead of a loss, it all depends on how the delivery goes. A few thousand extra cars get delivered by the end of September or delay into October could make a difference.

For short term trading, charts and some technical indicators are more reliable at predicting stock moves.

 

[Zhelko Dimic]

I don’t know that we will ever get the big squeeze

But we have to be nearing the end for some players. If USA LR/AWD 3 is successful then Europe, then SR, then Y.

It’s just too much. It’s over 12 months of demand > supply for no real capital, without even trying yet.

I have 50 oct 12 400 calls among my fun. I think it will squeeze up slowly from the first Tuesday of October until Thursday/Friday, perhaps as high as 440. I think then we get to live 360-480, until Shanghai or energy services expands revenue in such a manner as the 3 is proving this quarter.

I call it my Tesla bet.

If I’m right 100% will buy a new model x, income tax and all.

I believe the loaded spring under us is about to show itself.

I believe we will gap up before Q3 earnings. I believe the opposition desperation shows this. I believe the giant variety of Tesla’s investors will understand the safe growth ahead of them, and I believe a percentage of the short side will release the spring, at least somewhat. And those douche bags have annoyed my life long enough that I’m taking an extra 100k off of them.

Be very, very careful. And check these pics...

 

[Mokuzai]

I’m currently on the longest road trip I’ve ever taken for 1,000+ miles from Southern California to the Seattle area. Decided to tally every truckload of new Teslas I saw headed south down the grapevine to be delivered. This is the tally so far up to Sacramento. Most trucks had 7 cars and a good mix of S/3/X on them. It’s dark now and I’m past Fremont so doubt I’ll see much more tonight. The tally includes this truck parked at the Gustine supercharger parking lot.

Oh and also the stock price is included to keep things on topic.

 

[Skryll]

Fyi if you are concerned about impact of Audi e-Tron on tesla, don't be. Audi e-tron event September 19th on 90 Broadway in San Francisco – first impressions

 

[Electroman]

So Audi makes a YouTube video on e-tron with some cheesy graphics. Mohammed Ali in its thumb nail deceives a lot of people who get really ticked off because they were click-baited. So the video gets 50% thumbs down.

The narration goes something like this, "We did not invent the electric car, but we did something radically different ....".

This was a super comment: "We've also done nothing real. Just changed its design and made it cost more. Using state of the art CGI we can make it SEEM as if it can do things that it didn't really do"

 

[MarcusMaximus]

NYTimes, CNBC/CNN Front page, anyone?

LA family demands answers after parked BMW catches fire

Parked, turned off BMW catches fire, explodes in Los Angeles

BMW catches fire, causes $750,000 in damage - CityNews Toronto

Nobody is even covering the Model X that got nailed by a freaking DEA airplane. I’ve found more info on that via twitter than I can find by any news org.

 

[EarlyAdopter]

I learned today that the Bellevue, WA, service/delivery center is currently delivering about 30 cars a day. Next week they will be doing 100 deliveries per day.

100. A day.

And that's not even accounting for the downtown Seattle service/delivery center, which could be upwards of another 100 a day.

Unbelievable.