TSLA Trading Strategies

[Lump]

My reasons for TVIX and SQQQ. (NOT advice);


***I have said before but it is worth reiterating: I feel that my investment strategy is >50% luck, 40% listening/employing info that I learn from others and the remaining *skill*.

A "very wise" man was advising the of purchase of TVIX @ ~$16 for a 50% gain, 2 weeks ago .

 

[AlMc]

Thanks Al!

Can you provide any additional information about your specific trade or your decision making process?

Or generic information about SQQQ and TVIX before I google those strings?

A "very wise" man was advising the of purchase of TVIX @ ~$16 for a 50% gain, 2 weeks ago .

Wait...........Was that you LUMP?

OK, as I said, most of my trading is luck with LOTS of help from others. (even LUMP )... j/k LUMP.

@Lump is really a nice guy even though he does not want any of you to know that!

 

[MitchJi]

Wait...........Was that you LUMP?

OK, as I said, most of my trading is luck with LOTS of help from others. (even LUMP )... j/k LUMP.

I don't think that you are giving yourself enough credit. If you are making good returns I don't believe that it's possible that it's due mostly to luck. Maybe some of the short term trades, but not sustained good results.

On the SQQQ you can short the NASDAQ by buying calls?

The option chain doesn't have all of the normal expiration dates. Are they standard CBOE options?

 

[AlMc]

I don't think that you are giving yourself enough credit. If you are making good returns I don't believe that it's possible that it's due mostly to luck. Maybe some of the short term trades, but not sustained good results.

On the SQQQ you can short the NASDAQ by buying calls?

The option chain doesn't have all of the normal expiration dates. Are they standard CBOE options?

You buy 'shares', or at least I did, just like any ETF.

***TVIX is definitely not advice****. You think TSLA volatility is big/. Meet TSLA volatility on steroids.

 

[AlMc]

You buy 'shares', or at least I did, just like any ETF.

***TVIX is definitely not advice****. You think TSLA volatility is big/. Meet TSLA volatility on steroids.

I am not sure of the etiquette in quoting one's own post!, but as a show of the price swings on TVIX: It gained 35% one day last week and is down 15%+ premarket this morning. Yes, LARGE price swings

 

[AlMc]

There was some discussion in the 'market' investor thread about TVIX and I wanted to share more info on just how rough this ETF can be:

How Does TVIX Work? - Six Figure Investing

TVIX can grind down your investment big time. Meant to be held as a short term hedge against volitility


I strongly recommend you do not follow my lead in this one.

 

[GoTslaGo]

There was some discussion in the 'market' investor thread about TVIX and I wanted to share more info on just how rough this ETF can be:

How Does TVIX Work? - Six Figure Investing

TVIX can grind down your investment big time. Meant to be held as a short term hedge against volitility


I strongly recommend you do not follow my lead in this one.

Short term, for macros, theoretically this month would be a good one to hedge against (possibly including September as well*):

Why August is the most dangerous month of the year

*WWII started Sept 1, 1939, also stuff like Sept 11, 2001, etc...

Seems to be something with the human psyche, or timing of the harvest (in the past)?

 

[geneclean55]

I think he is basing that on weekly mid-bollinger being in the mid 330s next week. This would be great for trading in my opinion.
At that SP, I will be selling covered puts with end of September expiration and low 300 strikes. Anticipation for semi reveal/ M3 ramp news should keep the SP from going too low, but if macros go real bad then I pick up stock for under 300.

 

[MitchJi]

20% ? Too small a potential move for me to reposition; not worth paying the capital gains tax. I'll get more stock via put exercise if the market does drop.

We sold seventy one calls for ~$458k when the SP was about $363. At Friday's close we could buy the same number of identical calls for $355k! That is less than a five percent dip, and we could buy in now for $100k less!

So for us a either a five percent or a twenty percent dip is worth taking advantage of!

Of course the tricky thing is seeing it coming, and buying back in before the next rise!

 

[AlMc]

We sold seventy one calls for ~$458k when the SP was about $363. At Friday's close we could buy the same number of identical calls for $355k! That is less than a five percent dip, and we could buy in now for $100k less!

So for us a either a five percent or a twenty percent dip is worth taking advantage of! Of course the tricky thing is seeing it coming.

Nice Mitch! Well played.

 

[MitchJi]

Nice Mitch! Well played.

I'll congratulate myself when or if we buy back in at a good price.

 

[AlMc]

I read that some posters did some selling today and are waiting for a further pull back possibility to buy back in LEAPS, shorter calls or stock.

My trading shares had a stop loss at $340 so I have some cash to possibly redeploy. I plan to redeploy as LEAPS with a drop of $20+; stock if we hold $345 for more than a day (yep, taking that $5/share loss).

Not advice.

EDIT: I should have listened to Mitch's wife.

 

[kenliles]

EDIT: I should have listened to Mitch's wife.

Fortunately, I had a macro trade layer that corresponded to Mitch-wife premonition, and traded that out about $360.

Also, Going to increase core tracking at $325 if we hit. That's a different layer meant to track a share range over 5 years (using common/LEAP).

Mitch- Pass along our thanks--
Well done

 

[GoTslaGo]

Agree! Thanks @MitchJi 's wife!

Sold other trading shares to free up capital. Been adding TSLA.

FWIW, I've been reading Prechter's recent book "Socionomic Theory of Finance" which argues (so far that I've read) that the social sentiment is the key to predicting market moves. To a large degree stuff like what Mitch's wife experienced.

Still not finished reading it (It's REALLY a big book!), but pretty amazing how he analyzed how the market behaved compared to commonly accepted economic wisdoms, and showed that most of the accepted wisdoms don't work!

 

[MitchJi]

I believe that the whole market will take about a 10-15% dip in early December. I'm leaning towards buying TSLA puts if the SP is over about $370 ear the end of August or in early September. I believe that TSLA will dip to about $315-$320 and stay pretty flat for a month or three.

I plan to short the S&P in early September. I was leaning towards buying SPY Puts. Someone recommended using e- mini contracts for that. Has anyone here done any trades using the emini contracts.
Described here:
What Is The S&P E-mini Index Futures Contract?

<Snip>
You only need as little as $500 to day trade one e-mini futures contract -- which is called day margin. The S&P 500 E-Mini contract currently has a value around $103,500 but to trade it you only need $500 margin per contract.

To trade $103,500 worth of a stock you are required by law to have 50%down or $51,750 --- obviously a huge difference.
<Snip>
The E-mini S&P 500 (Emini SP) Index futures contract is a trading vehicle offerred by the Chicago Mercantile Exchange (CME). It is based upon the 500 stocks that comprise the S&P 500 Index.

The price of the Emini SP closely follows the price of the S&P 500 Index. The S&P 500 Index is composed of 500 large-cap United States stock issues and is regarded as the premier barometer of the U.S. stock market.

The Emini SP is a perfect and economical way in which to trade 500 of the largest and most important U.S. stocks.

The Emini SP is the smaller version of its "big brother", the standard S&P 500 futures contract. The Emini SP is one-fifth the size of the standard contract. The "E" in Emini stands for electronically traded and the "mini" means the smaller version of the standard contract.

Each full point of an Emini SP futures contract is valued at $50.00. The price of the Emini SP moves in one-quarter increments of $12.50. Each of these one-quarter movements is called a "tick". Three ticks, for example, would equal $37.50 ( 3 x $12.50 ). If the Emini SP moved 3.50 points, it would equal a move of $175.00 ( 3.50 points x $50 per point = $175.00).

The current price of one Emini SP contract is around 2070 points. That means the current market value of one Emini SP contract is $103,500 (2070 points x $50 per point). For you to daytrade an Emini SP contract you are only required to put down a very small percentage of the current value of the contract.

The amount required, which is similar to "margin", varies among brokers but could be as low or even lower than $500 per contract. You therefore can control an asset currently worth $103,500 by putting just $500 down.

More informative here:
What Are Emini Futures? Why Trade Emini Futures?

Emini futures are probably the most important trading vehicle in the world.

The aim of this article is to be the ultimate introductory guide to Emini futures. There are answers to the most frequently asked questions, charts and data to show the importance of Emini futures and downloadable resources for Emini traders. Use the links below to jump to a particular section:

• Low brokerage rates: Broker commissions for trading Eminis continue to fall. Interactive Brokers advertise a rate of $0.85 per contract per side (as of March 2015). This excludes exchange and clearing fees and when you factor those in, your “round trip” or “in-and-out” brokerage commission is closer to $4.00 per trade. TradeStation’s advertised rate is $1.15 per contract per side, but this includes use of their excellent charting platform.

Emini futures were originally launched in September 1997 to attract non-professional investors into trading index futures. Previously, the only game in town had been the “large” SP contract – but it had become too expensive for the “little guy” to trade. So the CME created the Emini contract which was 1/5th the size of the “large” S&P 500 futures contract and required 1/5th the margin to trade.

Over 10 years, the Emini became a huge success. Not only with non-professionals but with professional traders too. Now everyone trades the Emini: mutual funds, pension funds, hedge funds, insurance companies, high frequency trading (HFT) firms, trading syndicates and individual/non-professional traders.

The chart above shows the growth in monthly Emini trading volumes. The huge volume spikes of over 80 million contracts traded happened during large market sell-offs. Average daily trading volume is regularly over 2 million contracts. Between 2012 and 2016 trading volumes have backed off, but that decline in trading activity has been seen across all traded markets.

The Emini has become the ‘de-facto’ day trading vehicle of professionals and the original “large” SP contract has become a pure position trading and hedging vehicle, with greatly reduced trading volumes.

This isn’t what the CME planned! They thought professionals would trade the SP and individual/small traders would be able to hedge with the Emini. I suppose the many advantages of the Emini were just too attractive for professional traders to ignore.

Cheap to trade and no time value.

Jeff Augen said that with some very rare exceptions markets and stocks don't crash up. So market crashes are a potentially huge and rare opportunity.

Definitely not an advice!

 

[MitchJi]

Emini post continued:

Trading Volume of the Largest Emini Varieties (monthly)
With the success of the S&P 500 Emini contract, the CME (and other exchanges) decided to launch over 40 other “E-mini” and “E-micro” futures contracts!

These cover additional US indices, metals, commodities and forex, including:

• NASDAQ 100 (symbol NQ, 100 largest NASDAQ companies)
• NASDAQ Composite (symbol QN, all 3,000+ NASDAQ companies)
• NASDAQ Biotech (symbol BQ)
• S&P Midcap 400 (symbol EMD)
• S&P Smallcap 600 (symbol SMC)
• Dow (symbol YM, traded on CBOT exchange)
• Russell 2000 (symbol TF, traded on NYBOT/ICE exchange, small cap index, formerly ER2 on CME)
• Russell 1000 (symbol RF2, traded on NYBOT/ICE exchange, large cap index, formerly RS on CME)
• Metals and commodities such as Copper, Gold, Silver, Corn, Wheat, Soybeans, Natural Gas, Crude Oil, Heating Oil and Unleaded Gasoline
• Forex rates versus the US Dollar such as Euro, British Pound, Swiss Franc, Japanese Yen, Australian Dollar, Canadian Dollar and Chinese Renminbi
• Options on the S&P 500 Emini and NASDAQ 100 Emini

However, the S&P 500 Emini continues to dominate index futures as the chart above of monthly trading volumes shows. And of the 40+ “E-mini” and “E-micro” contracts, only 10 have daily trading volumes over 1,000 contracts. Given these statistics, I wouldn’t be surprised to see the number of “E-mini” and “E-micro” contracts rationalised in the future.

So which Emini futures contract is the best to trade? IMHO the S&P 500 Emini is best, but you could also consider:
<Snip>
What Margin Is Required To Trade Emini Futures?
The answer to this question depends on the futures broker you choose to trade through. And there are 3 different $ amounts that matter:

1. Intraday Initial Margin: The amount you need in your account to place an Emini day trading order. Varies between approx. $1,155 and $2,625, depending on your broker and current market volatility.
2. Overnight Initial Margin: The amount you need in your account to place an Emini trade during the overnight or after-hours session. This varies between approx. $4,620 and $5,250, again depending on your broker and current market volatility.
3. Minimum to Open Account: The amount you need to open a futures trading account. Varies between $5,000 and $10,000, depending on your broker.

The first thing you need is a futures brokerage account. This is different from a “normal” stock trading account – because it’s governed by different regulations – but works in the same way. Interactive Brokers are an excellent option. I particularly like that they’re geared around being 100% online – for example, their application process is 100% electronic. But they’re not the only option.

Having your brokerage account linked with your charting platform provider is a very cost effective way to go. Both TradeStation and NinjaTrader, the leading charting platforms, now offer futures brokerage services.

 

[Mulligan Jake]

Is anyone else buying TSLA on Mondays or Tuesdays, then Selling covered call option at or near the purchase price, with expiration for that Friday? I let the option be exercised and do the same again next week. This just keeps me in the game and I do not touch my core holdings. THIS IS NOT ADVISE.

 

[elasalle]

Emini post continued:

Trading Volume of the Largest Emini Varieties (monthly)
With the success of the S&P 500 Emini contract, the CME (and other exchanges) decided to launch over 40 other “E-mini” and “E-micro” futures contracts!

These cover additional US indices, metals, commodities and forex, including:

• 
  
  
  • NASDAQ 100 (symbol NQ, 100 largest NASDAQ companies)
  • NASDAQ Composite (symbol QN, all 3,000+ NASDAQ companies)
  • NASDAQ Biotech (symbol BQ)
  • S&P Midcap 400 (symbol EMD)
  • S&P Smallcap 600 (symbol SMC)
  • Dow (symbol YM, traded on CBOT exchange)
  • Russell 2000 (symbol TF, traded on NYBOT/ICE exchange, small cap index, formerly ER2 on CME)
  • Russell 1000 (symbol RF2, traded on NYBOT/ICE exchange, large cap index, formerly RS on CME)
  • Metals and commodities such as Copper, Gold, Silver, Corn, Wheat, Soybeans, Natural Gas, Crude Oil, Heating Oil and Unleaded Gasoline
  • Forex rates versus the US Dollar such as Euro, British Pound, Swiss Franc, Japanese Yen, Australian Dollar, Canadian Dollar and Chinese Renminbi
  • Options on the S&P 500 Emini and NASDAQ 100 Emini

However, the S&P 500 Emini continues to dominate index futures as the chart above of monthly trading volumes shows. And of the 40+ “E-mini” and “E-micro” contracts, only 10 have daily trading volumes over 1,000 contracts. Given these statistics, I wouldn’t be surprised to see the number of “E-mini” and “E-micro” contracts rationalised in the future.

So which Emini futures contract is the best to trade? IMHO the S&P 500 Emini is best, but you could also consider:
<Snip>
What Margin Is Required To Trade Emini Futures?
The answer to this question depends on the futures broker you choose to trade through. And there are 3 different $ amounts that matter:

1. 
   
   
   • Intraday Initial Margin: The amount you need in your account to place an Emini day trading order. Varies between approx. $1,155 and $2,625, depending on your broker and current market volatility.
   • Overnight Initial Margin: The amount you need in your account to place an Emini trade during the overnight or after-hours session. This varies between approx. $4,620 and $5,250, again depending on your broker and current market volatility.
   • Minimum to Open Account: The amount you need to open a futures trading account. Varies between $5,000 and $10,000, depending on your broker.

The first thing you need is a futures brokerage account. This is different from a “normal” stock trading account – because it’s governed by different regulations – but works in the same way. Interactive Brokers are an excellent option. I particularly like that they’re geared around being 100% online – for example, their application process is 100% electronic. But they’re not the only option.

Having your brokerage account linked with your charting platform provider is a very cost effective way to go. Both TradeStation and NinjaTrader, the leading charting platforms, now offer futures brokerage services.

MitchJi with all due respects - why do you think we are going to drop? Any reasons?

My take, is that as long as the tax reform bill is in the works, the overall market trend is going to continue to be Bullish. Per Paul Ryan TownHall(like 2 days back), they still gonna try to pass it by end of year. (&trend is your friend)

The other Macro event for this week is the Fed meeting in Jackson Hole, but I think market already aligned for that.

cheers!!

 

[elasalle]

Option gurus ..
Trying to decide pros and cons b/w selling DITM Puts vs buying DITM calls ? Anyone have any suggestions.

Say I have 36K.
I can Sell Jan 19 450 call for 130$.
Max profit is 13K
if exercised, it will be like buying stock at 320.

For same 36 K,
I can buy 3 Jan 270 DITM calls for like 120$ each
max profits ... unlimited
breakeven is 370$.

To me the DITM calls have more upside and more risk. All suggestions welcome . Anything I am missing?

 

[durkie]

Is anyone else buying TSLA on Mondays or Tuesdays, then Selling covered call option at or near the purchase price, with expiration for that Friday? I let the option be exercised and do the same again next week. This just keeps me in the game and I do not touch my core holdings. THIS IS NOT ADVISE.

I do it a little differently: sell OTM puts and sometimes they get assigned. with those shares, i sell OTM calls, and a little farther out -- usually with expirations before end-of-quarter deliveries are announced. but yeah, if any of them don't get exercised then wash/repeat.

i am comfortable with owning a little extra TSLA on margin, so i tend to sell more puts than calls.