Thứ Năm, 27 tháng 10, 2016

Social Chat - Short Term TSLA Movements part 13

  • 1/1/2015
    guest
    Elon said on the conference call that there would be more information next week - presumably another call or a press conference.
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  • 1/1/2015
    guest
    To be fair I'm somewhat surprised by the mutedness of the stock movement today. Ok I can understand the gap filling to an extent, but the recovery from there has been slowish. Wonder what we'll reach prior to the gigafactory call as it seems most people are in a wait and see status, kind of like everyone took a breather and the two calls are actually taken as one with most action happening only after the second...
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  • 1/1/2015
    guest
    I'm the reverse. Yesterday I posted I didn't grasp why the stock went bonkers after hours since the ER, while good, was basically what had been known since Tesla announced 6900 cars delivered. The stock retreating to this level makes more sense to me, back to beyond the previous ATH, but not a big jump beyond.

    That's not to say I wouldn't expect more upward movement over time.
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  • 1/1/2015
    guest
    Elon's comments about raising capital no doubt put a cap on the action. Had he just not said that, there would not have been a single reason for shorts to hold on. As soon as he said that, there was hope that the shorts could exit next week. Also, it gives any longs that were interested in adding to their position a reason to wait and see.

    I really which Elon would learn to not answer those kinds of questions.
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  • 1/1/2015
    guest
    That's what he said, so probably within the next three weeks ;-)
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  • 1/1/2015
    guest
    Agrred. But you can't change him, and may not want to....Because you also get comments like the 'X' reservations: 'Like going fishing and the fish just jump in the boat'

    I expect it next week and I think the reason for the delay is that SCTY will be part of it and he did not want to say that before the ER comes out on Monday (I think)



    BTW: The Apple-Musk meeting that happened LAST year seemed to be released at a curious time. Could it be that Elon is hedging on the Giga factory because he is pressuring Apple to get involved?? Wonder how the story got out there.....Hmmmm (time to put on the Tin foil hat?)
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  • 1/1/2015
    guest
    Just for the record, I did not make any trades today. I would have bought some weekly call options when we were at $206, but I didn't have any cash and didn't want to sell anything else either.

    I am holding for tomorrow, since I have a feeling we will get some kind of good news story out of left field, such as NHTSA.
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  • 1/1/2015
    guest
    We are in new terroritory, so it is normal to get uncomfortable, the earnings were good. Outlook was great. Analyst loved the reports and price targets are being raised. Doughtery and Company raised their to $325 and that is discounted
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  • 1/1/2015
    guest
    I am still holding the last third of my weekly 165s and 170 calls (took profit on 1st third Monday and second third yesterday). Since I can't watch the price action constantly I have put very high sell prices on them which I do not think will be hit today but hope they hit tomorrow. Strangely my March 7th protective put has not gone to zero so I guess I will just hold onto it in case the 'giga factory' call next week is not 'market friendly'.
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  • 1/1/2015
    guest
    Saw this today, made me LOL:

    Untitled.jpg
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  • 1/1/2015
    guest
    I de-leveraged mightily this morning, selling my Feb 22 calls and rolling about half of them forward to march. I have some nervous cash on the sidelines doing a wait-and-see. It is a certainty that I would have been better doing nothing at this point, but I always planned to dial down my risk this week.
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  • 1/1/2015
    guest
    ok so Kass of seabreeze management partners who invest in alternative energy has double down today on his short position. he has been tweeting trying to get others to do so as well. ? is there history here that i am unaware of? why would people investing in firm try to bring down an electric car company? any insights
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  • 1/1/2015
    guest
    I know what you mean. Had planned to Write OTM Calls hedged against my LEAPS this week, but as usual Elon outsmarted that move with GigaMonster. Guess I'll hold off on that until next week. When will I ever learn...?
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  • 1/1/2015
    guest
    It's the same reason they try to "bring down" any company -- $$$

    Really though, most shorts aren't trying to bring down a company. I doubt they have an agenda against EVs.
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  • 1/1/2015
    guest
    Exactly. But I think Elon is okay with the stock not rocketing. I'd even guess that the secondary will be fairly significant. I still believe Elon wants TSLA to be more stable. If there are more shares on the market that could possibly help stabilize TSLA (lower percentage of shorts, more supply, etc). Just a couple months ago he laughed at Tesla being valued at $25 billion so he's probably not too comfortable at these levels either.

    I remember at Apple that talking about the stock price over lunch was fairly common. I don't know if it really affected morale or anything, but apparently Elon thinks it does at Tesla and he doesn't want that.

    I think it was luvb2b who had mentioned after the first offering that Elon was really after the shorts by not providing a lot of shares for them to cover. The result was an epic squeeze (i.e. volatility) and I don't know if Elon wants that again.

    Hope I'm wrong though :)
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  • 1/1/2015
    guest
    I'm just commenting on what I want. Like, I wanted to unwind some of my short term bullish bets today. And Elon kinda screwed that up for me by hanging a secondary over our heads.
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  • 1/1/2015
    guest
    Yeah me too. Last time he did a secondary I remember about a week or two before, he said it wasn't necessary to raise more capital and after the short squeeze he did one out of left field it seemed like. When you do a secondary don't you want your stock price as high as you can get it to get the best value?
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  • 1/1/2015
    guest
    I am not convinced an equity offering will occur in the short term, having listened live to the call & reading the transcript I came away with Elon saying we have up to 3 years to raise needed funds but will be oprtunistic near term with some type of raise, not limited to a secondary.

    From the transcript.... Fourth Quarter 2013 Financial Results QA Conference Call - LIVE BLOG - Page 2

    Listen to the webcast here Tesla - Events Presentations

    Adam Jonas MS: Opportunities in the battery business . . . pull in fresh capital to plan for force majeur?

    Elon: That's a smart move. Will talk about that next week about the Gigafactory. I can't say much right now, but your advice is good.

    AJ: Would a capital raising be a prerequisite?

    Elon: I think it's necessary to have it occur in three years. It's not necessary if we allow that time frame to expand.
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  • 1/1/2015
    guest
    anyone else feel like the whole aftermarket/pre-market trading thing is tantamount to inside trading? Tesla should hold the quarterly reports smack in the middle of the day to be fair to everyone and if that's not legal, but it's legal to hold the meetings during after hours trading, then something is terribly wrong!
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  • 1/1/2015
    guest
    You can participate in after hours trading if you want... It is just for shares and not options, and you have to set limit orders.
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  • 1/1/2015
    guest
    A capital raise is definitely iminent. No doubt whatsoever.
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  • 1/1/2015
    guest
    I understood that to mean that it's necessary to do the capital raise now in order to complete the GigaFactory in three years. If they're willing to let the gigafactory timeline slide longer, then a capital raise is not necessary.
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  • 1/1/2015
    guest
    Just want to chime in to agree that capital raise is imminent. Elon's tone of voice sealed it for me when he said he "thinks is a good idea" to raise money at these valuations.
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  • 1/1/2015
    guest
    Hopefully we see a short squeeze tomorrow, shorts hate holding over weekends on bullish stocks :biggrin:
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  • 1/1/2015
    guest
    If I was CEO I would have announced the secondary yesterday, we all kind of expected it back when he first mentioned gigaFactory so no one should be surprised, I simply became suspicious when he quickly agreed with the analyst & pronounced the potential secondary.
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  • 1/1/2015
    guest
    this afternoon - pre closing selloff is getting predictable enough to make some money on. Daily cycles of traders are very consistent
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  • 1/1/2015
    guest
    There's no question about a capital raise, but the big question is to what degree and WHEN. We'll know more next week. What's interesting is I think that's why the Apple meeting took place. Between Samsung, Panasonic, Apple, etc. these guys are all heavily reliant on Li-on tech. There could be a secondary, but Elon also said he doesn't like share price distracting daily operations.

    I call today a sucklessful day.
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  • 1/1/2015
    guest
    I can think of at least four reasons he did not/would not:

    1. He has not lined up/signed up the partner's yet.
    2. He would like to announce where it will be constructed and has not lined up the space.
    3. SCTY is one of the partners and he did not want to release until after their ER next week.
    4. He used the 'non announcement announcement' during the ER call to leverage either the potential partners or sites to, as someone else said, 'get on board because the train is leaving'.

    I am still suspicious that Apple may be a player/potential player in this Gigafactory
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  • 1/1/2015
    guest
    I took it to mean the secondary would be announced with the gigafactory press conference.
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  • 1/1/2015
    guest
    If SCTY is involved, he legally can't because their earnings are coming up.
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  • 1/1/2015
    guest
    He didn't mean it's necessary to raise capital within three years. What he meant is that TSLA will need to raise capital at some point if they want to finish their gigafactory within three years. This raise would be soon, then, because they need the money before they start the project, not after. If they aren't in a hurry and don't mind taking more than 3 years to make the factory, then they could just use their own cash generated from sale of cars to fund it over time. But what he meant is that TSLA won't have enough cash from their business operations to finish the factory in that timeline, and that they would need to raise cash otherwise. Last call he talked about taking on a partner, this call he talked about capital raise. So it'll be one or both of those things.


    ____________

    And since it seems everyone else already said that, I just wanted to get on here and talk about how happy I am about the ER move. Obviously it would have been nice to go to 250 or something insane, but I expected a move of about 5% either direction (probably up) after ER (because the best news was preannounced), and thought premiums were too high given that the move wouldn't be that huge. So we're sitting here at 210 over a previous ATH of 206 or so and 8% up after yesterday's close, and the best call trade could have made about 50% from yesterday today (more if sold in the morning, but I'm never awake at open). So it turns out the idea of a bull put spread was pretty much the perfect trade and made me a bunch of money. Had I gone a little wider with the spread (I went 170/185 so wide enough) or maybe sold it a bit closer I could have made more, but I thought that was optimal given the potential for a 5% swing either direction, and made more money than naked puts would because I didn't need as much margin for this so I could sell 15 contracts instead of 1 or whatever. Feels really good to make exactly the right trade for the right reasons. And glad DaveT chimed in to tell me it was a good idea when I mentioned it a week ago...hope some other people could benefit from it too :)
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  • 1/1/2015
    guest
    If I have learned anything, the truth will be less fancy that TMC theories :)
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  • 1/1/2015
    guest
    Although TSLA was up $16 today, I feel the reaction has been relatively muted, especially considering the stock was down $10 yesterday pre-ER release. While the street seemed to like the numbers and outlook, I'm assuming the capital raise has people waiting for more details. Really, we are only up like $6 (or <3%) from where we were Tuesday. I didn't play the weeklies big because the premiums were so high and I didn't expect a lot of surprising info... I only bought 1 Feb 28 $225 contract yesterday.. rest are in Jan '15 $300/$350/$385 LEAPs (which were rolled up from Jan '15 $150s). If we had held the the gains from AH around $215 or $220, I would have been more confident about a short squeeze over the next few days. It could still happen of course, but less likely now IMO. If anything, the shorts will be adding to their positions, not covering yet.

    I really expect the shorts to start beating their drums again over the capital raise for the gigafactory once it's announced. We may get another nice buying opportunity if that happens. For now, I'm just sitting on the way OTM LEAPS and some cash available to buy more following any secondary offering. The secondary should really only be a one-time dip, if that... I still expect Tesla to smash their expectations this year with ease (and hopefully TSLA will let me pay for our Model X).
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  • 1/1/2015
    guest
    Yea I think this is my lesson from this ER. When IV is really high bull put/call spreads are much better. Best time for calls is when stock has settled down for a while like we did in the 150's and 140's before the 6900 deliveries announcement. Return on those calls were insane. Lesson learned :)
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  • 1/1/2015
    guest
    Has anyone else noticed the Porsche 911 fire recall notice? Porsche warning: 911 GT3s can catch fire

    They asked all drivers to immediately stop driving the 2014 911 GT3

    Porsche stock closed today down ~1.5%
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  • 1/1/2015
    guest
    The DB downgrade to 'hold' did not help either as DB has been one of the few that had stood by TM during the vehicular debris issues.
    �
  • 1/1/2015
    guest
    Agreed
    �
  • 1/1/2015
    guest
    I agree. I think the share price is on a steady but not instant upward path, and that this trend will continue as more pieces of good news arrive. The earnings release was just one important event.

    Giga-factory

    Model X finalization and fully working demos

    China sales/delivery

    NHTSA report

    Ramp up of additional line(s) at the Tesla Factory

    All of this stuff will add up� it's going to be a steady stream of bad news for short sellers.
    �
  • 1/1/2015
    guest
    People are silly, they raised their price targets, but trimmed sentiment. It's essentially a signal that there are better opps if you want hyper growth. They are being conservative.
    �
  • 1/1/2015
    guest
    They did raise price target though did they not?
    �
  • 1/1/2015
    guest
    I agree that people are silly but silly people make up the market and to a large extent the price of a stock. So, if the 'shorts' listen to Kass (silly) and the 'weak longs' listen to DB (maybe not so silly) then we get less positive movement on the stock.

    - - - Updated - - -

    yes to $220 I believe
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  • 1/1/2015
    guest
    So we're up pre-market, by 2.03. I know this means nothing, especially this early in the day, etc. etc. But one thing it *does* mean, is that we're up 2.03...and that's only +0.97%. Less than a year ago, 2 points would have meant ~6-7% or something like that. How far we've come since then.

    Just a happy observation, is all.
    �
  • 1/1/2015
    guest
    It looks like big players are going to maintain the stock at 210 through today - so it will gap either up or down on Monday.
    �
  • 1/1/2015
    guest
    Agreed. I can't be at the computer until after 4pm, so sold out the last of this weekly calls and bought some Feb 28 230s for $1 just in case we see NHTSA and positive response to gigafactory. I was going to sit on the sidelines but the potential for a big 'pop' with minimal investment was too good to pass up.
    �
  • 1/1/2015
    guest
    Anyone buying at the close today?
    �
  • 1/1/2015
    guest
    Was considering it, but I am at a loss as to what play to make :)
    �
  • 1/1/2015
    guest
    So is the market :). I'm thinking hard about a few things, we shall see.
    �
  • 1/1/2015
    guest
    What are yor thoughts? I think this giga factory can be huge but worried about the capital raise.
    �
  • 1/1/2015
    guest
    That is exactly what the market thinks. It will be a battle of the downward pressure from shorts crying about dilution, and the upward pressure from people realizing that with this announcement, Tesla is graduating from startup to historic world-changer, faster than anyone thought possible even a year ago. Not easy to predict short term movements. End of March seems like a good timeframe to me though...
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  • 1/1/2015
    guest
    It's pretty clear the price is being manipulated to end up at $210, so on Monday it will revert to a more genuine reflection of demand for TSLA stock. My personal view leans toward a drop on Monday. I think alot of people bought TSLA to be in on the quarterly report but aren't necessarily interested in maintaining that stake long-term and will sell. We saw this after 2013Q2 (and of course 2013Q3). If we get the drop on Monday, I will try to thread the needle and buy in some before the gigafactory announcement. I don't know which way the stock will go on the gigafactory news, but if the price drops beforehand I will be more comfortable increasing my stake.
    �
  • 1/1/2015
    guest
    The more I read Curt Renz' post about this on the long term thread, the less I am worried. I don't think a dip on dilution makes any sense at all. If Tesla raises $2.5 Billion by increasing the number of shares by 10%, your resulting equity includes that new cash. So your effective stake only drops 1%, not 10%. Any dip in the stock lower than 1% is highly irrational. And such a dip implies that the capital raise does substantially improve the future expected value of your new, slightly diluted stake.
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  • 1/1/2015
    guest
    I am sitting on Mar 22 175's catching up on House of Cards while waiting for the Gigafactory announcement. End of March sounds great.
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  • 1/1/2015
    guest
    Don't worry; concern about dilution from a subsequent offering is nonsense. Musk told Bloomberg that if it takes at least three years to start the giga-factory, retained earnings may be sufficient. If begun in less time, then fresh funds may need to be raised. We're talking about a few years from now when the share price could be substantially higher.

    If new shares of equity are created, indeed each one would be a smaller fraction of the company than previously. But the dollars put into the treasury by the new shareholders increases the value of the company. By just balancing those factors , it�s a wash. But if the money is put to good use, it should be a far greater boon than just sitting in a vault or a savings account. At the May offering, new shares were sold at the day�s closing price. That price continued to soar.
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  • 1/1/2015
    guest
    Second time I have seen you make a similar comment and maybe I am not understanding you correctly, but:

    Elon said that if they want the battery factory FINISHED within 3 years then they have to raise capital now.

    99% chance that raise capital next week.

    He said they could build the factory out of retained earnings but it would take more than 3 years. Which is not really an option.
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  • 1/1/2015
    guest
    This is the way I heard/read it as well. There will be a capital raise soon because they want/need the Gigafactory operational within 3 years to supply Gen III which will start to be produced 2017 in small quantities, then ramped in 2018. If they want to delay the building of the factory beyond opening in 3 years, and thus ramped production of gen III, they can do it without capital raise but through earnings.
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  • 1/1/2015
    guest
    Sold my first successful spread today. Sold 5 monthly Feb 207.5 for $0.43 and bought the 202.5 for $0.09. Collected the full $ 170 premium when tsla finishes above $207.5.

    I would recommend other low level options traders get the spread capability, it is a useful tool.
    �
  • 1/1/2015
    guest
    Does "retained earnings" mean spending money on the factory instead of accumulating cash? Would that affect the earnings per share while the factory is being built?

    The value of TSLA is heavily tied to what the company will be doing 5 years and more from now, so it makes no sense to me that people would care very much what earnings are right now or while the factory is being built. Nevertheless, I think alot of investors do care: I'm reading that the post-announcement jump this week was because Tesla reported 33 cents per share earnings instead of the expected 21 cents. If there were a short-term (3 years) drop in earnings to create long-term earnings growth, I'm not confident that investors will properly reward that.
    �
  • 1/1/2015
    guest
    An order for almost 61k shares(almost $13million worth) just got bought at the bell. Someone is betting on a good next week :).
    �
  • 1/1/2015
    guest
    well, that could have been me if you moved the decimal point to the left three places!:wink:


    I am actually not sure how to 'play' next week. Bought far OTM calls as something to watch/hopefully make a couple dollars on but it could go either way. Overall, I have been lucky recently but I will be the first to admit if I make money next week there will be no skill involved on my part.
    �
  • 1/1/2015
    guest
    In the interview on Wednesday with Betty Liu of Bloomberg after the conference call, Musk said, �We could pay for the giga-factory from retained earnings, if we allowed the time frame to extend beyond three years. If we want the factory to be done in three years, we would probably need to raise some capital.�

    Interview: http://www.bloomberg.com/video/tesla-ceo-musk-on-battery-factor-model-x-apple-LzHPROiTSoCyaQMM5Fg9lQ.html

    No matter how that time frame is interpreted, I still suggest that concern about dilution is moot as expressed in the second paragraph of my post:

    If new shares of equity are created, indeed each one would be a smaller fraction of the company than previously. But the dollars put into the treasury by the new shareholders increases the value of the company. By just balancing those factors, it�s a wash. But if the money is put to good use, it should be a far greater boon than just sitting in a vault or a savings account. At the May offering, new shares were sold at the day�s closing price. That price continued to soar.
    �
  • 1/1/2015
    guest
    Thanks for clarification, Curt. I think Sleepy and most of us agree with you on the appropriate interpretation of this event as "unlocking value in the company" just as Sleepy said on our Roundtable discussion, but I also agree with Sleepy that dilutive events cause temporary price drops in public equities fairly frequently in the market while people try to figure out the benefits. This one could be different, or not.

    Or, are you saying you think there will be no analyst and trader negative reaction to the dilution at all?
    �
  • 1/1/2015
    guest
    After reading this again, I wonder if he meant that it will require new capital for it to be 100% complete in 3 years. But if it only needs to be beginning to ramp up in 2017 to match early Model E production, maybe it doesn't really need to be "completed" until 2018-19. Otherwise, why would he even make a distinction between finishing in 3 years or not, if extending it beyond 3 years was not in the realm of possibility?
    �
  • 1/1/2015
    guest
    that is what I read
    �
  • 1/1/2015
    guest
    You�re welcome. I�ll note that if a company makes a subsequent offering to make up for foolishly burned money, then it often takes a hit. If it�s done for capital improvements that are likely to enhance the value of the company, then no hit should be expected. In fact, the market can react positively. Tesla�s subsequent offering in May was largely done to eliminate criticism for having a government loan, so it was paid off by the receipts. That offering was fully subscribed at that day�s closing price, and the stock continued to soar upward.

    Since we do not presently know what will be learned from the upcoming giga-factory conference, we cannot easily foresee the reaction of analysts or the market. Nevertheless, I am unworried.
    �
  • 1/1/2015
    guest
    What are the chances the capital raise is already done or will be done by the time of the announcement? Those 10 million shares could be sold on the open market..in fact, they could be what has kept the price at 210.
    �
  • 1/1/2015
    guest
    0% chance... they can't just issue new shares and sell them on the open market, they need to register the offering first w/ the SEC. Then, shares are usually issued in blocks by underwriters (investment banks) to investors.
    �
  • 1/1/2015
    guest
    Thanks for the clarification!
    �
  • 1/1/2015
    guest
    That is a good point. That would be awesome if true, but still sounds unlikely, especially after Elon said that it is a "good idea" to raise capital.

    @Curt - I agree with what you are saying. And it is very possible that Tesla announces a secondary with gigafactory and the stock goes up. And in the long run it will be very beneficial for sure to raise capital for the gigafactory.

    But I just wanted to add some caution that it is very possible that the stock pulls back immediately on announcement and maybe even acts weak for a week or so. It is impossible to predict market reaction, and I am bringing this up because a lot of people play weekly options and wouldn't want to see people loading up on OTM calls and then lose money because they chose an expiration date that is too soon.

    That said, I really do not know how the market will react. My initial thought was that we will see a drop in share price of up to 5% or even more if Tesla announces a ~10% dilution. But after reading TMC a lot of people make a good case that the stock might shoot straight up or at least not pull back at all.

    I really don't know what to think now, but I am sticking to my initial gut reaction. I will not be playing the event with short term weeklies, but I am riding all of my other calls unhedged into this event. So I am positioned bullishly by not hedging, but not getting aggressive this time with OTM weeklies.
    �
  • 1/1/2015
    guest
    That makes the most sense to me as well. Tesla probably won't be churning out Model E at 300k/year when they first launch. It comes down to what makes the most business sense: getting the Giga factory up ASAP, or scaling as capacity is needed.
    �
  • 1/1/2015
    guest
    Let me just add that Jinko Solar JKS raised capital last summer when it was at $20 and the stock immediately tanked about 20% to $16 over the next day or so. The capital raise was beneficial and necessary, and the stock doubled from $16 to $33 over the next 1-2 months.

    Markets like to sell first and ask questions later. I hope that TSLA does not pull back on offering announcement, but I would not be excluding that possibility.
    �
  • 1/1/2015
    guest
    The more I think about a possible pull back, would that be bad? Most of us on TMC are bullish on the long term effect of an offering to fund the factory. Should produce a good buying opportunity for 'longs' (stocks and LEAPS) and for well played options.




    It is not the pull back that would be bad. It is the short term uncertainty of what will happen if another offering happens.
    �
  • 1/1/2015
    guest
    Yes. The pullback to <150 in November was a great opportunity for many of us, since we knew it would bounce back to >180 in short order. 20% in two months is pretty good, and more if you timed it right, and even more now that its above 200. I welcome another opportunity like that.
    �
  • 1/1/2015
    guest
    Very interesting point. I didnt know that Tesla had shares to sell on the open market. Its quite the shock to see the price flat line for two days. I (most) were expecting short covering, massive moves up then down. The selling could have started Wed morning which could explain the dip. (I'm short, have a negative bias, looking for a correction and long entry point)
    �
  • 1/1/2015
    guest
    They don't have shares to sell on open market.

    Side note : when I say pull back, I mean like a 5% pull back, but nothing major.
    �
  • 1/1/2015
    guest
  • 1/1/2015
    guest
    Investors Business Daily quoting Andea James

    "There should be a cost benefit for Tesla to produce its own batteries," James wrote. "It is unclear to us just how much, but we estimate it could be as high as 8 cents per watt-hour, which would lower Tesla's cost per kilowatt-hour on its battery pack to about $180."
    Tesla's agreement with Panasonic lets it take delivery of at least 1.8 billion lithium-ion cells over four years, James points out, which would allow Tesla to produce a minimum of 64,000 vehicles a year at 7,000 cells per vehicle.




    Read More At Investor's Business Daily: Tesla Battery Factory Just Might Power Up SolarCity, Apple TSLA SCTY - Investors.com
    Follow us: @IBDinvestors on Twitter | InvestorsBusinessDaily on Facebook
    �
  • 1/1/2015
    guest
  • 1/1/2015
    guest
  • 1/1/2015
    guest
    Are you kidding me? The stock went down. I follow news in solar and CSIQ like a hawk. TSLA has been the only blessed one where people are extremely confident of leadership as they clearly tell investors what they are gonna do with the $.
    �
  • 1/1/2015
    guest
    No, I wasn�t trying to kid you. I saw the news on the 14th. The news came out on the 11th and you are right.
    �
  • 1/1/2015
    guest
    Exactly. When Elon Musk comes to the investment community and says, "I've got a great idea that will only cost a few billion", people open their checkbooks. Maybe someday they will be disappointed, but so far everyone who bought (and held) their IPO/Secondary position in a company that Elon has run has made money -- often, lots of it.

    Dilution is a funny thing. Wisely invested, new capital increases the future dividends by more than the increase in the stock issuance. Therefore, although there are more shares outstanding, there's more profit expected.

    At some point, I wonder when Tesla will issue bonds? Or is their current cost of equity so stupidly low that even corporate bonds seem expensive?
    �
  • 1/1/2015
    guest
    I am in the camp that thinks that if the factory plan is sound the capital raise, while dilutive, won't cause the stock to go down materially. The captital raised will be used to build a factory that will make shareholders a lot of money. TSLA stockholders understand and expect this. It would be worse if they weren't talking about capacity plans.
    �
  • 1/1/2015
    guest
    I am actually hoping that wall street/non TMC investors do cause an initial dip with the potential Gigafactory dilution. From an investment standpoint it would appear to be an excellent opportunity for all of us to add stock, LEAPS or end of March calls as I feel that is about the time when everyone outside the forum will realize that the capital raise was actually a positive catalyst.
    �
  • 1/1/2015
    guest
    Pardon my dumb question, but If Kass is shorting TSLA at $218 to $224 a share, how is this a short?
    �
  • 1/1/2015
    guest
    I don't think he entered at 218 and exited at 224. He placed short sell orders when the price was between 218 to 224 per share, and he has profited by the 10 dollar decline.
    �
  • 1/1/2015
    guest
    He also sold short at 198 and has lost ~$10 on the rise after the ER.
    �
  • 1/1/2015
    guest
    He was shorting the stock on the way up and his orders filled between $218 and $224. He dollar cost averaged on the way up.

    He said that his short position now has a cost basis of $212.
    �
  • 1/1/2015
    guest
    Short Term TSLA Investor Social Chat

    An update on my post-earnings bull put spread. I ended up closing out the 210 puts about 3 minutes prior to closing for $0.70. So, I ended up making $1.20 on this play (out of max gain $1.90 and max pain of $3.10). Overall it was a successful trade although when I sold the spread (stock was at $211) I thought the stock would trend higher but it didn't and ended up getting stuck around $210.

    Yesterday I also sold a put credit spread for next week. Sold Feb28 200 puts for $2.81 and bought Feb28 197.5 puts for $2.21 for credit of $0.60. Max gain is $0.60 and max pain is $1.90.
    �
  • 1/1/2015
    guest
    I must say DaveT, you recent posts have piqued my curiosity about the idea of getting into spreads. Would you mind telling us if you are moving significant dollars in these plays, or just a few contracts at a time?
    �
  • 1/1/2015
    guest
    What's the reason you use bull put spread instead of bull call spread? I know one is credit and other is debit transaction. But they make or loose about same amount of money in the end. Bull put spread will tie up your buying power even it's credit transaction.
    �
  • 1/1/2015
    guest
    Because you win when the stock goes up, stays the same or drops a bit. With a bull call spread, you only win if the stock goes up.

    I had a bull put spread this week for 200/190 that netted $430 per contract, and have one for this coming week at 205/195 that maxes at $230 per contract with max pain at $670. I like these spreads too when you feel the stock will not go down but aren't sure if it will go up. Recent trend for TSLA is to go up and then consolidate for awhile.
    �
  • 1/1/2015
    guest
    That depends in both cases where you place the strikes.
    If you buy the following bull call spread
    buy Feb28 $200 call for 12
    sell Feb28 $210 call for 6
    for a net debit of 6 and the stock doesnt't move and ends at $210 the bcs ends at $10 for a 66% gain.

    One advantage of bull put spreads is, that you you don't have to close them.
    In the above example of a bcs you have to sell the $200 call if the stock ends around $210.

    In this example of a bull put spread:
    sell Feb28 $210 put for 6.50
    buy Feb28 $200 put for 2.70
    for a net credit of 3.80.
    Because you already received the 3.80 upfront and the stock didn't move and ends at $210 you don't have to do anything, you can just let them both expire worthless.

    But I assume that can't be the only reason, why DaveT used BPS instead of BCS. Care to elaborate a bit on your reasoning, Dave?
    �
  • 1/1/2015
    guest
    Another factor in deciding on a bull call or bull put spread is how the time-value of the option is working for, or against you. The bull put spread is also a credit spread, i.e. you make money from the differential theta (time decay) in the options.
    �
  • 1/1/2015
    guest
    One strategy I use is to also write covered calls when the IV is high, near earnings for example.
    You have the time decay working for you, as well as the high IV dropping quickly...

    Worst case scenario, my shares are called away (at a nice profit already), best case scenario, I pocket the premium (Which just happened on Feb 22 $215 calls I sold). These also don't have to be sold, you can just let them expire.

    Of course it's wise to not sell more contracts than you have shares to back the calls up with, in case you are caught.
    With the volatility of TSLA, even if shares are called away, most likely you'll have an opportunity to buy back in at nearly the same price.
    �
  • 1/1/2015
    guest
    Since we are talking spreads, with the options expiry on Friday I just profited from my first delayed construct bull call spread. On January 29th, when the stock was around 175, I bought 10 Feb $175 calls at $12.40 per contract. Two days later on January 31st I sold 10 Feb $185 calls at $12.45 per contract. I was then able to put that money into Jan 15 $250 calls when we dipped back down into the 170's a few days after that. Not too much work and I was easily able to profit $10k with no risk. With all the volatility we are experiencing I really think this type of spread is perfect, especially with LEAPS. All it takes is a few percentage points of movement in the underlying for the LEAPS to move enough to create delayed construct bull call spreads. So far I've been able to create 70 spreads for Jan 15 and I will be aggressively working towards making more this year. I think this strategy will result in a much higher return opposed to just holding LEAPS because you can cycle the same investment over and over again to create an ever increasing number of spreads.

    Anyone else pursuing this strategy??
    �
  • 1/1/2015
    guest
    @gym7rjm
    Sounds interesting. I'm just starting to use something more like @mitch672. I'm holding a large number of j15 and J16 LEAPS for my long term position (rolling up and out as time and price move forward- essentially a leveraged stock replacement). I'm starting to sell OTM calls on price peaks to generate income on downswings. It's a rather safe play. To increase the LEAPS return while staying strong long
    �
  • 1/1/2015
    guest
    This is my strategy playbook (still in formation) for playing TSLA weeklies.

    Disclaimers: These are my personal opinions and they are still in formation as I�m not an expert on weekly options, so they�ll likely to change. Also, these strategies only apply to weekly options. I�ve purposely left out naked OTM weekly calls/puts since the time-value decay (theta) is so great on these and are probably better suited for the experienced options day trader.

    Main strategies for weekly options:
    1. If I�m bullish for the week, bull put spread

    2. If I think it�s range bound, iron condor

    3. If I�m bearish for the week, bear call spread

    Rare strategies for weekly options:

    4. If I�m super bullish for the week, bull call spread

    5. If I�m super bearish for the week, bear put spread

    6. If I�m playing a huge positive catalyst event that has just occurred with huge upside for the week, then naked ATM calls (ie., 7-10 days out).

    7. If I�m playing a huge negative catalyst event that has just occurred with huge downside for the week, then naked ATM puts (ie., 7-10 days out).

    I�ll go a bit more in depth with some of these specific strategies for weekly options.

    1. If I�m bullish for the week, bull put spread

    Here�s some examples.

    Prior to Q4 earnings I was riding March 180 calls (bought when stock was under 135) and Feb14 190 calls (bought when stock was 170). I decided to exit both positions fully the Friday before earnings (when stock was about 200). Then, I wanted to play earnings with some weeklies.

    I could have just kept my March 180 and Feb14 190 calls and sold higher strike calls (ie., 220) and went into earnings with a some bull call spreads. However, going into earnings I was bullish but I wasn�t super bullish. So, I decided to do some bull put spreads instead.

    The day before earnings, I bought a 195/190 bull put spread (sold 195, bought 190) for a credit of $1.75 (and max pain of $3.25 if stock expired at 190 or lower). The reason I chose this bull put spread (vs a OTM bull call spread) is because I felt like TSLA had a 75% chance of closing the week at 195 or higher. And I thought that there was a decent chance of TSLA closing at 195-210 at the end of the week (vs higher than that), so I didn�t want to take a lot of risk with a OTM bull call spread (ie., 205/210) and naked OTM weekly calls were way too risky with the scenarios I was seeing. The trade expired on Friday (3 days later) and I was able to keep the $1.75 credit.

    Post earnings, I wanted to do another weekly play based on my thinking that the earnings was good and we wouldn�t see the stock close on Friday lower than $210. But I was afraid of the stock going higher than $220, so I didn�t want to do an Iron Condor (will explain later). In other words, I was more bullish than neutral. So, I sold a weekly bull put spread 210/205 (sold 210 put, bought 205) for a credit of $1.90 (max pain $3.10) when the stock was at $211 on Thursday. I thought the stock would actually bounce and we would end the week at $215-220, so I thought the 210/205 was fairly safe. The extra safety of margin a bull put spread provides is that if the stock stays stagnant I can still come out on top since I�m benefiting from time-value decay. So, actually the trade turned against my expectations. The stock didn�t end at $215-220 like I expected, rather it ended the week at $209.60. But as long as the stock ended at $208.10 or higher I would still make money on the trade, and that�s what happened.

    My wife also did a post-earnings weekly trade and here�s what it looked like. The day after earnings (Thursday) she bought a 205/200 weekly bull put spread (sold 205 put, bought 200 put) for a credit of $1.12 (max pain $3.88). Then she also bought a bear call weekly spread 225.50/225 (sold 222.5 calls, and bought 225 calls) for a credit of $.20. So, she was counting on the stock to remain within $204-223 range. This set up an iron condor where her max profit was $1.32 (already received up front) and her max pain was $3.68. The stock closed at $209.60 allowing her to keep the full credit.

    The reason why I�m choosing to use a bull put spread (vs a ITM bull call spread like you illustrated) is because the trades are actually almost identical in terms of max profit and max gain (ie., if you can sell the Feb28 210/205 bull put spread for $4 credit, then max pain is $6. That would be the same as the 210/200 bull call spread example you shared). However, in a bull call spread you need to fork over the max pain amount at the beginning of the trade (ie., in the bull call spread example that would be $6 debit) and then you would wait to be able to get that money back and up to $4 more for max profit. This poses some challenges with cash flow since you�re $6 cash is tied up and when you close the BCS you�ll need to wait for the money to clear to be able to trade with that money again. So, you couldn�t close the spread on friday and on the same day use that money to buy another spread. But with the bull put spread, you get the max profit (ie., $4 up front) and only pay the pain (up to $6 net) if the losses are realized. So, if the trade works out and you retain your initial credit, then you can immediately execute another trade (since you�re money doesn�t need to clear like in the case of the bull call spread).

    I�m still relatively new to weekly credit spreads, so I�m taking it slow and doing a relatively small amount for me (I�d rather not share the exact amount, but it�s more than a few contracts at a time). For someone new to this, I would suggest reading up on weekly spreads, iron condors, income plays, etc and getting some training first. Then, starting out with minimal risk and building up from there. For example, start out with the smallest trades possible and build from there. Weekly credit spreads still carry a lot of risk but they�re definitely lower risk than naked weekly OTM calls/puts or even weekly OTM bull/bear spreads.

    I was going to go into the other weekly strategies in my current playbook, but this post is already very long so I�ll just stop here. And for the most part, I'm currently more theory than experience in regards to trading weeklies. But I'm sharing so that others can benefit from my learning experience and so we can crowdsource experiences/lessons to speed up each other's learning experiences.
    �
  • 1/1/2015
    guest
    Short Term TSLA Investor Social Chat

    Thanks DaveT - very informative. Quick questions on your bull put spreads: for these TSLA trades, why choose a strike price difference of 5 vs. 10? With 10, you can achieve a similar a higher gain with a lower break even price and also fewer contracts to achieve the gain you want, which lowers commission fees. The max pain price is also lowered. The trade-off is the worse ratio of gain to pain, but if your conviction is bullish, it seems like the advantages outweigh the disadvantages.
    �
  • 1/1/2015
    guest
    I forgot to share my reasoning for selling a 200/197.50 bull put spread for next week (Feb28 expiry).

    I�m kind of neutral going into next week. I think there�s possibility of TSLA dropping to under $200 if the gigafactory isn�t presented well. But if the gigafactory is presented well (which I think it will be) I think the stock holds at least $200. If I was more bullish I might have sold a higher strike bull put spread (ie., 205/200 or even 210/205), but the gigafactory announcement present some unknown risks imo so I�d like to be cautious. Early in the week, I also might look to sell a bear call spread (ie., sell Feb28 200 calls and buy Feb28 225.50 calls) since dilution talk might make it difficult to close above $220, so the combined trades would form an iron condor with a lower max pain point and a slightly higher max profit.

    All of this is speculation. :)
    Also, I hope no one follows me into these trades as I'd hate for people to lose money when it doesn't work out. Rather, I think it'd be helpful if folks understood these types of trades and we could help grow our knowledge, so when people make their own trading decisions they're better informed.
    �
  • 1/1/2015
    guest
    Short Term TSLA Investor Social Chat

    I've been experimenting with various strike price differences when I place my order. But 10 strike difference is quite wide. So, if we're looking at 210/200 Feb28 bull put spread you can probably get around $4 in credit . But if I sell a 207.5/202.5 Feb28 bull put spread, I might get about $2 credit. I would prefer the 207.5/202.5 bull put spread because my max profit point is lower at 207.5 (vs 210) and I could just buy double the contracts.

    Regarding commissions, I'd advise making sure you are in a brokerage that has low/reasonable options fees so it's not that big of a factor in your decisions.
    �
  • 1/1/2015
    guest
    Max profit point is lower but the max pain point is higher in your version. Probably a wash overall. Thanks for the insight. I have started trying these sorts of non-delayed spreads the last few weeks and they seem to do well without the stress of naked options.
    �
  • 1/1/2015
    guest
    So, at what point do even the most optimistic of us thing the stock has hit it's limit for the time being? We're nearly 1/2 the market cap of Ford and GM. We can extrapolate some really high values with the assumptions of Gen3, but all assumptions have some counter due to the risk.
    �
  • 1/1/2015
    guest
    I think that using the market cap for these other car companies is incorrect so it's not fair to say "two teslas make up a gm but they have 1/1000000th of the production" (as a recent article said). These car companies are the epitome of how to run the business wrong. "let's add middlemen to take 10% of our profit". "let's make buying stressful!". "Let's make service terrible!". "let's keep pension plans". Etc.

    I believe the stock has stabilized at 210 and will now proceed upward, mostly because the short float is so high. I think we're closer to 40% short show, and I think that we now need to spark that movement upward. Tesla is firing on all cylinders and I think that 280 or 300 would begin to be seen as overvalued and force a downward correction, but 220 is a fair price now. I've done some shorting, and buying to cover on an upward move like this stops being about "is the company at a rational price or irrational" and becomes more of "i'm on the wrong side of this trade and need to get out".
    �
  • 1/1/2015
    guest
    I think this giga-factory announcement is going to be the biggest thing Tesla has ever announced up until this point. Not just because the factory will physically be very large, but also because this is the missing link between Tesla being just a small niche company, and a juggernaut completely changing the world as we know it. I find it amazing you have guys like Mr. Kass shorting this announcement thinking "dilution" is going to scare investors when we are talking about the single most important part of the companies future. That's telling me people are underestimating whats to come, and are in for a rude awakening. I am betting this will be the start of a run to 300.
    �
  • 1/1/2015
    guest
    Even though I think that there might be a small pullback due to dilution (because of people like Kass), I am starting to think exactly like what you wrote in your post.
    �
  • 1/1/2015
    guest
    I agree. Up until now we have had knowledge and support for 50k model S and via Elon at least 50 k of the model X,

    Until now the gen 111 has been all talk . We understand the it require primarily a huge drop in battery costs

    The Giga factory brings the first signs that this will happen , no longer just a pipe dream.

    this could underpin the institutionall buying and send the stock toward $ 350 this year
    �
  • 1/1/2015
    guest
    While I agree in principle with your analysis of the company/companies, let's not forget that we on this board are probably an informed minority and the market in general may very well stampede for irrelevant reasons. But I'm pressing my thumbs, as we say, and hope to be able to secure a little profit bit by bit and hold the rest for longer-term, if possible in a more real-time based account. This wild volatility combined with pay-out delays is bad for me.
    �
  • 1/1/2015
    guest
    Short Term TSLA Investor Social Chat

    Sold a weekly 225/227.5 bear call spread for a credit of $0.55. This forms an iron condor with my previous Feb28 197.5/200 bull put spread (previous credit of $0.60). New max profit from trade is $1.15 and max pain of $1.35. If TSLA closes this Friday between 200 and 225, I keep all the credit received.
    �
  • 1/1/2015
    guest
    With such a big catalyst on the horizon, I would gladly take the opposite end of that trade.

    Good luck but I hope TSLA finishes above $230 this week.
    �
  • 1/1/2015
    guest
    Short Term TSLA Investor Social Chat

    :)

    Just sold another weekly bear call spread 230/232.5 for credit of $0.37 (max pain of $2.17). If TSLA drops in the next couple days to around 210 then I'll try to complete an iron condor by buying a 197.5/200 bull put spread.
    �
  • 1/1/2015
    guest
    Picking up nickles in front of a steamroller.

    I would wait a couple of weeks for the stock to settle before using such strategies. Too much volatility in the stock right now and not enough IV in options to be going short IV.

    Chances are that your iron condors will all finish at max payout, but the risk is not worth the reward.
    �
  • 1/1/2015
    guest
    Short Term TSLA Investor Social Chat

    I hope TSLA closes this week at $224.99. :)
    �
  • 1/1/2015
    guest
    Been there, done that in January. Too much stress.

    Now I am riding unhedged for the most part. The higher TSLA goes, the better for me.
    �
  • 1/1/2015
    guest
    You may be correct but I'm seeing things a bit different. I think we're somewhat range bound this week with the gigafactory/secondary announcement. I think closing this week over $225 is a 25-30% chance and closing over $230 is a 10% chance. Those odds are how I'm viewing it. We'll see what happens.
    �
  • 1/1/2015
    guest
    Looks like the market might be starting to realize how much value the GigaFactory announcement is going to inject into TSLA. Go March calls, go.
    �
  • 1/1/2015
    guest
    +1 - I also unhedged my positions last week and am letting it ride as I also believe the GigaFactory announcement will stir the pot and have the institutions take a serious look at the stock. Also with Kass jumping up and down about his short position last week, I suspect a lot of shorts who just follow the herd were drawn in over the past couple of days which kept a lid on the stock after earnings. I suspect that herd starting to run out of steam and the momentum will swing back in favor of the bulls, especially if the GigaFactory financing doesn't dilute as the market expects.
    �
  • 1/1/2015
    guest
    Did you edit a post? I swear it said 1.15/3.85 but now it says 1.15/1.35.

    That is a big difference and not as bad a play as I was alluding to.

    Still think it is a bad idea to be short IV this week.
    �
  • 1/1/2015
    guest
    Short Term TSLA Investor Social Chat

    Yeah I edited it shortly after posting it since $3.85 was a mistake (I was calculating off of a $5 spread but realized I had $2.5 spreads so the max pain is profit minus $2.5) so it was a $1.15 max profit and $1.35 max pain.
    �
  • 1/1/2015
    guest
    i think this is just TSLA moving with major market indicies that are hitting ATHs today.
    �
  • 1/1/2015
    guest
    That risk/reward profile makes a lot more sense. You are getting over 80% potential return on money at risk. A lot better than before editing, i.e. less than 30%.
    �
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