TSLA Trading Strategies

[MitchJi]

I certainly respect your decision to post your trades to the thread. However, you have to be right twice in order to make out better than just holding your positions. You have to sell at a peak, and then buy back later. You seem to have done step one correctly, but TSLA just might pass your sell point tomorrow and I don't think you have bought back in yet. There very well may be a better buy in position in the future two - three months, but the quoted part of your newsletter states the most profits are to be made at the tail end of the cycle. Sounds a lot like the trend is your friend.

I posted earlier in this thread that it was too early for self-congratulations, so I am in complete agreement that this could be a huge mistake.

But if there is a correction we should be able make a lot more money shorting the S&P and other stocks than we lose by missing the bottom on Tesla.

The safest course of action would have been to keep our J19 LEAPS given that I'm extremely confident that the SP will be well over $400 by June-July 2018. We sold at a good time so it's possible that our overall strategy is still going to work out.

I'm still pretty confident that there will be a correction before the end of October.

Not an advice.

 

[AlMc]

I posted earlier in this thread that it was too early for self-congratulations, so I am in complete agreement that this could be a huge mistake.

But if there is a correction we should be able make a lot more money shorting the S&P and other stocks than we lose by missing the bottom on Tesla.

The safest course of action would have been to keep our J19 LEAPS given that I'm extremely confident that the SP will be well over $400 by June-July 2018. We sold at a good time so it's possible that our overall strategy is still going to work out.

I'm still pretty confident that there will be a correction before the end of October.

Not an advice.

There is no perfect strategy or we would all use it. Never hurts to take profit, as you did.

 

[MitchJi]

There is no perfect strategy or we would all use it. Never hurts to take profit, as you did.

I would say that there is always a perfect strategy. The problem is that we don't know what that is until after the fact . Taking a 100% profit on TSLA in 2013 when the sp increased from about $30 to about $60 would have been a huge mistake. But I still feel good about taking a profit now (so far).

OTOH in a previous post I said that Jesse Livermore said that if there's an inexplicable dip you should bail. I wonder what he would have said about TSLA's inexplicable $20 rise yesterday? Because that made me think that if the same reasoning applies to bumps as to dips that ww might see $405-$415 soon. Our crystal ball doesn't agree.

 

[MitchJi]

Today's hotline call:
SCF-2017-09-12-Tue.m4a

 

[MitchJi]

Today's call:
SCF-2017-09-13-Wed.m4a

 

[Causalien]

I would say that there is always a perfect strategy. The problem is that we don't know what that is until after the fact . Taking a 100% profit on TSLA in 2013 when the sp increased from about $30 to about $60 would have been a huge mistake. But I still feel good about taking a profit now (so far).

OTOH in a previous post I said that Jesse Livermore said that if there's an inexplicable dip you should bail. I wonder what he would have said about TSLA's inexplicable $20 rise yesterday? Because that made me think that if the same reasoning applies to bumps as to dips that ww might see $405-$415 soon. Our crystal ball doesn't agree.

Crystal ball bought at $320.

 

[GoTslaGo]

FYI, Friday is Triple Witching.

 

[D-egg-O]

FYI, Friday is Triple Witching.

What's triple watching?

 

[Mich]

What's triple watching?

I think this means that today weekly calls, monthy calls and quaterly calls are ending.

 

[MitchJi]

What's triple watching witching?

Triple Witching Friday happens on the third Friday of every third month (March, June, September and December). It is the simultaneous expiration (or rollover) of various futures and options contracts.

Many U.S. stock index futures, stock index options and stock options expire on on these days. The simultaneous expiration of the three types of markets is the reason these days are called "triple witching".
My definition was a little different, I thought it meant weeklies, monthlies and quarterly options all expire.

 

[D-egg-O]

Triple Witching Friday happens on the third Friday of every third month (March, June, September and December). It is the simultaneous expiration (or rollover) of various futures and options contracts.

Many U.S. stock index futures, stock index options and stock options expire on on these days. The simultaneous expiration of the three types of markets is the reason these days are called "triple witching".
My definition was a little different, I thought it meant weeklies, monthlies and quarterly options all expire.

Thanks Mitch and @Mich . It was late and my eyes were failing me when I read GTG's post.

 

[D-egg-O]

The dollar amount in LEAPs has now surpassed that of shares in the wife's Roth. Is this a sign to tip the scale towards shares or just par of the course with LEAPs?

 

[ggr]

The dollar amount in LEAPs has now surpassed that of shares in the wife's Roth. Is this a sign to tip the scale towards shares or just par of the course with LEAPs?

Well, the point of LEAPS/options is to increase leverage, so it is somewhat expected when the stock takes off. The price of LEAPS, based on Black-Scholes equations and Greek letters, takes "normal" growth into account, and is then biased towards making money for the option writers. It took me a long time to realize that I won't make money buying LEAPS in companies that perform according to market expectation. In Tesla's case, we knew better than the market.

 

[AlMc]

The dollar amount in LEAPs has now surpassed that of shares in the wife's Roth. Is this a sign to tip the scale towards shares or just par of the course with LEAPs?

Par for the course with LEAPS. You are controlling far more shares for a certain dollar amount than holding stock. They are amazing *when* the SP is rising but nasty when declining.

Are those J18s or 19s? Would make a big difference in a decision I would be making about selling or holding them.

Well, the point of LEAPS/options is to increase leverage, so it is somewhat expected when the stock takes off. The price of LEAPS, based on Black-Scholes equations and Greek letters, takes "normal" growth into account, and is then biased towards making money for the option writers. It took me a long time to realize that I won't make money buying LEAPS in companies that perform according to market expectation. In Tesla's case, we knew better than the market.

I agree with most of what you say and am sure you have much more LEAP experience than I. Not sure what the market expectations were for Apple a year ago when it was trading in the $90-100 range but J19s I bought back then are up 2x the SP rise over that time period.

 

[D-egg-O]

Par for the course with LEAPS. You are controlling far more shares for a certain dollar amount than holding stock. They are amazing *when* the SP is rising but nasty when declining.

Are those J18s or 19s? Would make a big difference in a decision I would be making about selling or holding them.



I agree with most of what you say and am sure you have much more LEAP experience than I. Not sure what the market expectations were for Apple a year ago when it was trading in the $90-100 range but J19s I bought back then are up 2x the SP rise over that time period.

All Jan2019 LEAPs. Mix of DITM and DOTM. Plan (I hope) is to sell the DOTM LEAPs (next year) and use the funds to exercise the ITM ones.

 

[kenliles]

All Jan2019 LEAPs. Mix of DITM and DOTM. Plan (I hope) is to sell the DOTM LEAPs (next year) and use the funds to exercise the ITM ones.

Stick with that plan--

 

[AlMc]

All Jan2019 LEAPs. Mix of DITM and DOTM. Plan (I hope) is to sell the DOTM LEAPs (next year) and use the funds to exercise the ITM ones.

Stick with that plan--

Agreed. But I never disagree with Ken.

 

[MitchJi]

Today's hotline call:
SCF-2017-09-14-Thu.m4a

 

[MitchJi]

Triple Witching Friday happens on the third Friday of every third month (March, June, September and December). It is the simultaneous expiration (or rollover) of various futures and options contracts.

Many U.S. stock index futures, stock index options and stock options expire on on these days. The simultaneous expiration of the three types of markets is the reason these days are called "triple witching".
My definition was a little different, I thought it meant weeklies, monthlies and quarterly options all expire.

Essentially this means that the max-pain is more likely to be a factor.

 

[MitchJi]

In response to the recent requests for an update on our thinking:

In a previous post I said that Jesse Livermore said that if there's an inexplicable dip you should bail. I wonder what he would have said about TSLA's inexplicable $20 rise yesterday? Because that made me think that if the same reasoning applies to bumps as to dips that ww might see $405-$415 soon.

Our crystal ball (aka Lynne) doesn't agree.

I explained the above to my wife before she left for Vancouver on Thursday morning and she disagreed. I probably won't have a chance to find out in more detail exactly what she thinks until she returns on Monday.

I believe that a TSLA SP of over $400 is possible soon. Michael Jenkins believes that a market correction is coming by the beginning of the week of September 25. If that happens it's possible that Tesla won't take a huge hit.

My plan is to be able to either repurchase TSLA LEAPS with an SP of under $320, or to make up the difference shorting other stocks or the S&P, or (oops) just repurchase TSLA LEAPS at a higher price.

In any case I'd like to end up with J20 $400's, not available until the end of November. I'd love to be able to buy over a hundred of them, we'll see....

Here's the link to Michael Jenkins Friday phone call (the last one I am planning to post):
SCF-2017-09-15-Fri.m4a

Much Love and Best Wishes to my dear friend @Lump.