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Tsunami update (of hurt)

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Total short losses 26oct12 - 27feb14 (close):


Trading: $5,985 million
Interest paid: $275 million
Total losses from shorting: $6,261 million




Note that these are only the losses in the common. It is fair to assume a lot of shorting has taken place by means of options as well, in particular during the time when there were no shares available to short. So the Tsunamometer© probably underestimates the hurt of the shorts significantly.
 
Total short losses 26oct12 - 27feb14 (close):


Trading: $5,985 million
Interest paid: $275 million
Total losses from shorting: $6,261 million




Note that these are only the losses in the common. It is fair to assume a lot of shorting has taken place by means of options as well, in particular during the time when there were no shares available to short. So the Tsunamometer© probably underestimates the hurt of the shorts significantly.

Thanks for updating the patented Tsunamometer, DonPedro!

How's your portfolio doing these days?
 
(LMB spouse)

@DonPedro - Are you assuming "naked" shorts? I don't really understand this stuff, but I assumed that professional investors would backstop their short sales with call options to limit risk. Thanks for any light you can shed on this.

I don't think you mean "naked short" in the way that term is usually meant. A regular short position means I went to someone who had shares, borrowed those shares from that person and then sold them. A naked short means I simply sold shares without even having access to any (see: Naked short selling - Wikipedia, the free encyclopedia).

What you are asking is basically what strategies Tesla shorts have used, if any, to protect themselves. The strategy you describe, being short in the stock but buying a call to limit risk, is viable. However, I would not assume that it would be a typical part of, say, a hedge fund manager's approach to shorting the stock. For one, such a position would give exactly the same payout as buying a put, so why not just do that in the first place. Second, and more importantly, the implied volatility of TSLA means that the put would be a costly insurance policy. Third, if you were so sure that the stock is going down, then buying an OTM call would not rhyme with the outlook.

So I don't have reason to believe that Tesla shorts have made profits in options to cancel out some of the losses in the common. To the contrary, I think that they have probably lost quite a lot of money in that market as well, on top of what the Tsunamometer records.