Thứ Sáu, 28 tháng 10, 2016

TSLA Investor Discussions part 19

  • 1/1/2015
    guest
    Another investing strategy that you may wish to consider is to sell some August $28 put options. You can sell those for ~$2.00 each, so if the stock drops below $28.00 and the option is exercised then you will have bought TSLA at $26.00 share. If TSLA increases in price, it would have to be above $31.10 for you to 'beat' the break even. This assumes that you paid $1.10 for the August $28 call options. $31.10 - $2.00 = $29.10. $28.00 + 1.10 = $29.10.

    Thoughts?
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  • 1/1/2015
    guest
    WTH is happening? This is not volatility!! What happened today?
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  • 1/1/2015
    guest
    Please read the prior posts. Same reason.
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  • 1/1/2015
    guest
    I have another strategy. You can buy some $29 Aug calls from me for $3, and I will buy you lunch.:smile:
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  • 1/1/2015
    guest
    Welcome back. Where have you been?
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  • 1/1/2015
    guest
    They have 50% short interest and trade at way more than book value...for companies that fall into those categories this is very low volatility.
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  • 1/1/2015
    guest
    Found the answer as to why: 42
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  • 1/1/2015
    guest
    For what it's worth, sold some Ensco stock (oil services) today to have seed money to buy more Tesla stock tomorrow. Giving up the +3% dividend, however I have done very well with Tesla by moving in and out of my positions due to its volatility.
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  • 1/1/2015
    guest
    10 yrs of losing money. Losing money faster than ever, making less money than ever, only enough cash for 1 qtr like this. Half of stakeholders betting against it. Some uncertainty as to the ability to actually produce promised product. Lot's of macro uncertainty/weakness. The next quarter will certainly not look pretty on paper. One big bet that will either come to fruition or crash in the next 2-3 qtrs= a vary volatile publicly traded stock that will only become more volatile in the coming months.

    There, now everyone owes me lunch. Or you can chip in for a Model S. Or at least that remote controlled Roadster.
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  • 1/1/2015
    guest
  • 1/1/2015
    guest
    [Some inappropriate posts and responses to same have been moved to Iamthecaliflower -mod.]
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  • 1/1/2015
    guest
    For as old as I imagine most of you are, there are some real babies in here.

    I am long TSLA and am fully accepting that I may lose my entire 125 shares if this company goes belly up, but if you say you're long then mean it. Days like this where TSLA is down 7.32% actually make me smile. I'm contemplating buying another 25-50 shares, and when the stock shoots to $45 within a year, I'll be smiling even more. In the meantime, viva tesla!
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  • 1/1/2015
    guest
    It doesn't sound like there is much of anything that would have any real stock impact for a while. We were always in a waiting mode, but previously it was punctuated by demos, events, etc. Now it's just wait and see if their line ramps up. Other than the super charger announcement a couple months from now, I'm not sure what sort of tangible news we'll see.
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  • 1/1/2015
    guest
    EDIT,,
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  • 1/1/2015
    guest
    [I just moved Cali's last message, and some responses to it, over to Iamthecaliflower simply because they were off topic for this thread. -mod]
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  • 1/1/2015
    guest
    I'm a bit of a novice investor, I'm hoping some other people talking about their put or call options here could shed a little light for me. I've done a little research into what puts and calls are but I'm having a hard time understanding the proper practical application. The example I looked at basically described a put as a fee you could pay to sell shares and a pre-arranged price anytime you want in the future up to a certain date, and a call would be the opposite.

    I'm currently long on Tesla, have been buying shares under $28.50, and think that Tesla is heavily undervalued at 27-28. I'm predicting 31-32 per share around the September 22 call date based on general public deliveries and hopefully the Supercharger announcement , and 36+ by the December 22 call date based on being on track for 2012 production goals. I'm trying to understand my options, but its all gibberish to me. Tesla Motors, Inc. (TSLA) Options Chain - Stock Puts Calls - NASDAQ.com

    Any clarity anyone can shine on this would be greatly appreciated.
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  • 1/1/2015
    guest
    You may have moved my post there accidentally, I just want to know about puts and calls. (sadpanda)

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  • 1/1/2015
    guest
    I had to grab another 100 today, couldn't resist. Didn't get the bottom though. I might get more tomorrow if it keeps dropping, but then I have to stop. Just say "no" and walk away from the "Buy" button.
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  • 1/1/2015
    guest
    EDIT,,
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  • 1/1/2015
    guest
    It appears you accidentally posted there... maybe VBulletin got confused if you hit reply while messages were being moved. I'll bring it back here.
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  • 1/1/2015
    guest
    Hi,

    A "put" gives the owner the right to sell a fixed number of shares at a particular "strike price." A call is the opposite: it gives the owner the right to buy a fixed number of shares at a particular strike price. These are rights, not obligations. The rights expire as of a particular date.

    Options can be used to hedge a particular position. Suppose I hold 1000 shares of TSLA, and I want to ensure that their value doesn't fall below $25/share. I can buy puts at a $25 strike price, buying downside insurance by giving me the right to unload my shares at $25, regardless of the market price. I might choose to fund that insurance by selling calls, which will generate some cash at the expense of capping my upside, because I'm giving someone the right to buy my TSLA shares at, say, $30, regardless of the market price. I will, in effect, have used puts and calls to reduce the volatility of my position.

    With modern trading platforms, a lot of this hedge value can be replicated by putting in "limit orders" to buy or sell a security. These don't cost anything (until they're executed), but run some risk of not having the liquidity to execute at your desired price, whereas options will always do what you expect them to.

    I would counsel you, as a novice investor, to stick with straight purchases of equities. Options are in the "advanced techniques" category of investing. You can lose a lot of money, fast, if you screw up your portfolio while holding options. In the above example, if I sold my TSLA shares but forgot to buy back the call options, I would have a "naked" call position with potentially unlimited financial exposure. Not a good place to be if TSLA were to climb to over $100....
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  • 1/1/2015
    guest
    Agree with Robert. Until you self-ascribe as "non-novice" investor, don't go anywhere near calls or puts.
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  • 1/1/2015
    guest
    EDIT,,
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  • 1/1/2015
    guest
    Novice investors should not trade options. Expanding on the comments above ...

    In the 'spectrum' of option trading, some options have more risk than others. Writing (selling) options is very different than buying options. While buying options creates a right to purchase or sell the underlying security, writing (selling) options creates and obligation to sell (or buy) the underlying stock.

    Regarding risk, options have much more leverage than holding the stock itself. As pointed out above, selling 'naked calls' can have unlimited risk, which is similar to shorting the stock. On the other hand, writing 'covered calls' where you own the stock and write (sell) a call option only limits one's upside in the stock. Covered calls can allow an investor to generate a rate of return on a non-dividend paying stock if the options expire out-of-the-money and are not exercised.

    The risks inherent in writing (selling) 'naked puts' is similar to owning the underlying security, with much greater leverage. If you believe in TSLA and are willing to buy the stock, you can write (sell) a put option that, if exercised, will have you owning the stock. The benefit of naked puts are that you can reduce your investment cost since the premium reduces the cost of your investment. On the other hand, if you write (sell) some, say, August $27 puts on TSLA and the stock is above $27 at expiry then you keep the premium. You can then use that money to buy the stock. If TSLA goes higher than the premium you wrote the put for then you missed a chance to invest (i.e., you limited your upside).

    Investing in stocks has its risks. Investing in options has greater leverage, which can increase the risk and, at the same time, reduce other risks while generating a return.

    Again, novice investors should not trade options. Advanced investors may want to consider using options to increase their rate of return, particularly if they are following the stock closely.
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  • 1/1/2015
    guest
    Where do you find the volume for after (and pre-) hours? Also, does anyone know if there's a good site where you can get plots that include pre/after market action?
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  • 1/1/2015
    guest
  • 1/1/2015
    guest
    I'm already short the August 28's and august 31's... :)

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  • 1/1/2015
    guest
    Covered calls? Or, did you sell puts?
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  • 1/1/2015
    guest
    Also finance.google.com. Choose Settings, then check Extended hours.
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  • 1/1/2015
    guest
    I sold the puts...
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  • 1/1/2015
    guest
    Well done ... nice premiums. Either you will enjoy the premiums or own more TSLA at a good price.
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  • 1/1/2015
    guest
    ok premiums... I'm early as usual. I sold the 28's @ $1.55 (now 1.85 x 2.00) and then 31's I sold at $2.50... (now 4.00 x 4.30).
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  • 1/1/2015
    guest
    Ok, one minute to go... can they make that 3 cents disappear? 8^D

    on edit: Nope! 8^P
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  • 1/1/2015
    guest
    EDIT,,
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  • 1/1/2015
    guest
    After the recent ups and downs (and downs) I could no longer wait and had to get in. Since I hadn't bought any stocks in the last few years I even had to go to the bank to reopen my account. Anyway: bought 100 TSLA @ 27.88. Might buy more on the way down.
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  • 1/1/2015
    guest
    EDIT,,
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  • 1/1/2015
    guest
    Killing the shorts

    Just wondering... how much money would one need to make the shorts (run for) cover?

    What percentage of the 64M floating shares would one need to buy (somewhere between $27 and - say $45) to have the shorts cover? Would 10% of the float (6M x $36 = $200M) do to get the price up to $45?

    If we all pulled together, would that be a first: flash-mob stock manipulation?

    I think we should promise not to sell below $60. Who's in? :wink:

    Dear SEC commissioner, should the price of TSLA stock sudden rise at high volume we might have nothing to do with that. Really. Promise.
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  • 1/1/2015
    guest
    $60 is a great first target!
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  • 1/1/2015
    guest
    I've had $60 as my first target for about a month now. I'm never going to sell at a level below my basis though.
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  • 1/1/2015
    guest
    26.50 buy order just executed. This was sitting on the books for 6 months. Fingers crossed share price is testing its bottom at this level.
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  • 1/1/2015
    guest
    10% of the float is probably about right. Trades are monitored and recorded though, so you'll get caught - Shame, it would have been a nice idea if it was legal.
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  • 1/1/2015
    guest
    It looks like Chrysler sales are up (~13%) and GM and Ford sales are down (~6%) so there is some 'industry news' today that is negative. It could be a good time to write some August $25 puts. Lots of 'headline news' this week with announcements by the Fed, ECB and then the jobs report on Friday. Plenty of volatility ahead ...
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  • 1/1/2015
    guest
    So, it's illegal for a bunch of people to agree to buy 6.5 million shares of Tesla? Doesn't this get down to intent (which is blown considering the public posting, but if done in person over lunch....)?

    As for buying now that the price is down, I'm wary of catching the falling knife. Selling Puts in the amount of shares you might otherwise buy today is, for me, a safer way to go. If the price goes down further, you're getting a better price, and if the price goes up, you keep the Put premium and still have the opportunity to buy on the open market before it gets really high. But, watch out for August, and be cautious about September.

    Why do I think we might be catching a falling knife now? Well, deliveries are going to be slow in Q3, the 5000 total this year is in question, and Tesla seems likely to do a capital raise this calendar year. I think Tesla knows that just issuing more shares will dilute and make the stock tank, so my guess is they're talking with existing investors (Toyota, Mercedes, Panasonic) or new big investors and will do a private placement. That will still hurt the stock price, I'm guessing. Q3 deliveries look to be starting off from zero - and they need to average 10 cars/day to make the 50o. Three weeks from now may not be enough time to know how things are shaking out, with the result that the stock price won't recover before then.
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  • 1/1/2015
    guest
    Smorg, solid take on things. Although one thing I was thinking about regarding the capital raise (I am probably just biased and optimistic because I'm long for now) is that a capital raise could actually help the stock price. I say this because a relatively small capital raise would minimize dilution, but at the same time give them more time to "sell" more reservations and make sure that demand is in line with production and more importantly breakeven capacity.
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  • 1/1/2015
    guest
    More reservations won't make the stock go up. It's going to take deliveries and happy customers.

    Short term the capital raise will hurt the stock price. I suspect the weakness in the stock right now is that people who are thinking of buying are waiting for the raise to happen and then take advantage of the expected decline to pick up shares. So, those of you with funds available might want to consider keeping some powder dry for a spell. Of course, I could be totally wrong - it's happened before. I'm really bad at short term technicals.
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  • 1/1/2015
    guest
    Intent, and the fact that it would be coordinated, is the problem.
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  • 1/1/2015
    guest
    Raymond, next time you have a bright idea, talk to people about it in person after checking them for hidden microphones or cell phones that are recording.

    The whole thing about "wearing a wire" is so last century, after all.
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  • 1/1/2015
    guest
    more reservations could cause Tesla to raise guidance which would in turn send the stock up. Of course, this is longer term not anytime soon.
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  • 1/1/2015
    guest
  • 1/1/2015
    guest
    $26.50 Buy Order executed - sitting on the books for 2 DAYS!
    Now we will see if my nex Buy Order will be executed.
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  • 1/1/2015
    guest
    WTH is causing this breakdown? Back to my question about what the heck do shorts know that I don't!!!! Someone is manipulating the hell out of this. Wtf!!
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  • 1/1/2015
    guest
    Lawsuits will also scare away investors (ie New Mexico developer suing Tesla over lost electric car factory Cleantech News and Analysis )



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  • 1/1/2015
    guest
    Lots.

    They know how hard it is to get a new car company going on a tight schedule and tighter budget.
    They know how hard it is to be a disrupting technology in a field that has big bucks invested in preserving the status quo.
    They know how resistant Americans in particular are to change.
    They know how hard it is to get production correct right off the bat.
    They know that Tesla will likely be raising cash this year.
    They know that Tesla hasn't shipped more than a dozen or so cars yet.
    They know that Tesla may not make the 5000 car target this year.
    They know that even if Tesla makes 20K cars next year, the stock is still priced at more then 10X future earnings. And those future earnings may not occur.

    But, mostly, they know that Tesla is a volatile stock and don't get all worked up as the price bounces around.
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  • 1/1/2015
    guest
    They also about missing cupholders and vanity lights. :smile:

    Sorry couldn't resist.

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  • 1/1/2015
    guest
    If tesla rolls over and dies I may drive off a cliff. In too deep to sell here. Guess I'll just be miserable for the rest of the year. I'm going back to sleep. Absolutely no reason to be awake.
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  • 1/1/2015
    guest
    Out of curiosity, to try to understand how you can let yourself get so upset and carried away, would you share with us just how "deep" you're in? (especially what your average buying price is for the stock you currently own).
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  • 1/1/2015
    guest
    If you're not going to actually talk about investing in Tesla and have anything of substance to say, please keep it to yourself. Not a good look my man. You're an emotional hot mess, and should really just spare us.
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  • 1/1/2015
    guest
    $34.50 cost. Total loss = A lot.
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  • 1/1/2015
    guest
    Meh. That's nothing. Look at the graph, not the day. It's headed up. It's just down for the day. Go back to sleep.
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  • 1/1/2015
    guest
    Quote of the day that I'd like to copy and paste in about a dozen threads on this forum:

    Elon Musk [email�protected]

    "People ought to think more about who wrote the software that's running in their head (sigh). It probably wasn't them."
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  • 1/1/2015
    guest
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  • 1/1/2015
    guest
    Anybody actually worried (aside from Cali) about the price dip? If I had any extra money I'd be buying a lot more right now.
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  • 1/1/2015
    guest
    Only "worry" is that at these levels some (many) of the shorts may be covering and thereby 1) profiting (had hoped no shorts would) 2) decreasing the short interest so that any future short squeeze may be smaller. This would imply of course new investors coming into the stock, or current long holders increasing their positions.
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  • 1/1/2015
    guest

    That is Awesome!
    Elon rocks ( did he write the software we run??? :smile:)
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  • 1/1/2015
    guest
    I'm a bit worried. The stock is lower than it was a year ago. It's not terribly far off the lows for the last year (ignored that 1-day "2 executives leave" blip). I can't afford to be any more invested in TSLA than I am, so buying more isn't an option for me.

    Seems like there's more to be nervous about than at any point in the last year. Before now, it was always progressing along: new factory, factory event, early cars going through crash testing, etc. Now Tesla is having delays, some quality issues (causing the delays), all creating a much more ambitious ramp up than before, discussing raising more capital when I thought the DOE loan was supposed to be more than sufficient margin for error.

    I don't see any "slack" left. Their burn rate ramping up the X (and Gen3?) early has left no margin for error with the S.
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  • 1/1/2015
    guest
    Unless part of the reason it's going down is additional shorts coming in.
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  • 1/1/2015
    guest
    To elaborate on that, somehow I don't have a bad feeling about this. It's either shorts coming in who get smashed later, or it's people selling who wouldn't have had the confidence to go up very high any way. So we might get a more stable "foundation". Could be wrong of course, just how I feel about it.
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  • 1/1/2015
    guest
    Not worried for my shares at all, great buying opportunity. But I'm not too optimistic about my Aug calls!
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  • 1/1/2015
    guest
    EDIT,,
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  • 1/1/2015
    guest
    Unless you think Tesla will close its doors in the next year, selling a January $15 put @ $0.95 is looking pretty interesting.
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  • 1/1/2015
    guest
    Not worried... I'm setting up a new investment account...
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  • 1/1/2015
    guest
    Only a little sad that I didn't sell at $36. I was about too but I didn't think it would have another big dip like this. I'm just sad for the missed opportunity to grow my stake, again.
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  • 1/1/2015
    guest
    EDIT,,
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  • 1/1/2015
    guest
    Nope. Along with everyone else's thoughts, as long as you're only investing with what you can afford to lose, you're fine.
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  • 1/1/2015
    guest
    @UncleRon

    I'll try to put it in prose; constructive feedback appreciated.

    January $15 put @ $0.95
    You're basically giving someone the option to make you buy 100 shares of the stock between now and January at $15/share. And they're paying you $0.95/share (so $95 for all 100 shares) today for that option.

    After doing so, one of 4 things can happen:
    (1) Tesla stock is under $15/share in January, and the option holder exercises the option (making you buy the stock at the $15 price).
    (2) Tesla stock is above $15/share in January, and the option holder lets the option expire.
    (3) Sometime before January the option holder gets nervous, and behaves like (1) but immediately.
    (4) Tesla doesn't exist in January. Sometime before that (3) happens.

    For all 4 outcomes you either pocket $95 or you buy the stock for an effective cost of $14.05/share.

    Actually, you can do a bit better. Technically, you could put the $95 in an interest bearing checking account and earn some interest until/unless the exercise (1, 3, or 4) occurs. Doing so would make your effective cost less than $14.05 (1, 3, or 4) or your cash more than $95 (2).
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  • 1/1/2015
    guest
    Tesla Motors (TSLA) Weekly Ratings Changes | Daily Political

    Thought you guys might want to see this.
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  • 1/1/2015
    guest
    Yep. I just hope we're getting rid of all the fainthearted.
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  • 1/1/2015
    guest
    Well, going in to short now is like getting in for a long position when it was at $39, but yes I see your point, some may take this dip (on no news mind you) as a signal that TSLA is going to crash somehow. Extremely unlikely IMO.

    And I like to thought of the "foundation getting stronger".
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  • 1/1/2015
    guest
    EDIT,,
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  • 1/1/2015
    guest
    Mr. Musk stated, repeatedly, that any capital they 'might' raise is NOT required. It would be used for 'cushion' and/or to put the pedal to the metal for R&D on GenIII car. So, I'm not understanding why it's being viewed by many as a negative thing, unless you think he and his finance specialist are lying?

    I also see no reason for the jitters (or however you want to label the sediments) because they're taking their time building the car and correcting things they aren't 100% satisfied with, swapping out suppliers who aren't on board and can't obtain the high standards et al... This IS a positive, not a negative. The negative would be a recall.

    People need to stop over-analyzing things, distorting comments and taking them out of context, and probably not have that sixth cup of java. :wink:
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  • 1/1/2015
    guest
    I'll try to clarify.

    The reason to buy a put is to lock in the ability to buy stock at a specific price (regardless of what the market does with the stock). Puts have an expiration date. Anytime (during market hours) prior to the expiration date, the option holder can pull the trigger -- exercise, force the option seller to make good by buying the shares at that price.

    My previous phrasing could have been better: The option holder doesn't have to wait for the stock to dip below the price on the put ($15) to choose to exercise, it just doesn't usually make sense to exercise an option when the stock is above the put price. [It doesn't make sense because the holder would be better off just selling the stock at market price in that case and then reselling the option.]
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  • 1/1/2015
    guest
    Tesla Motors' CEO Discusses Q2 2012 Results - Earnings Call Transcript - Seeking Alpha
    The guy can't make it any clearer that Model S funding and company cash flow are currently fine -- not in need of a capital raise and when/if they do a capital raise it won't be in the very near future and it would be spent on X and beyond.

    You have to decide whether you believe him or not. It's that simple, IMO.
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  • 1/1/2015
    guest
    EDIT,,
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  • 1/1/2015
    guest
    Slight correction in red, but generally you've got it.

    With the stock currently at $26.25, that's a return of 3.6% for a ~5 1/2 month period. Not a great return but it's a very low risk bet, IMO.

    If you were to get more aggressive, Jan $25 puts are $4.60/share which maps to 17.5% return (for the same ~5 1/2 month period) but with much higher risk of exercise and a higher buy price if that happens.


    If we have financial skilled folks on the forum, feel free to PM me the corresponding annualized rates of return for those two examples and I'll update the post.
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  • 1/1/2015
    guest
    You should understand what the person at the other end of your transaction is thinking. Remember that the person buying the Put from you is thinking the stock will (or at least may) go down.

    An easy way to short a stock you think is going to tank is to buy PUT options. You buy the Aug $28 Put for, say, $1.50 and if the stock goes to $20 you can simply buy the stock at $20 and then turn around and immediately sell it to the Put writer for $28. You end up making $8.00 - $1.50, or $6.50 per share. If the stock takes off on you, your maximum loss is the $1.50 you paid for the option. I think there's a lot of this going on with Tesla, although not for such near-terms like August.

    Another reason to buy Puts is to protect gains in stock you own. Let's say you bought TSLA around its IPO for $19. You're scared that if Elon makes a mistake, the stock will drop to $5. Buying a March $20 Put for a couple bucks protects you from that loss. If the stock drops to $5, you still get to sell yours at $20 - and it only cost you $2 for that insurance. If the stock drops before March, you could even decide you don't need the insurance and sell the Put for even more than you paid for it. And even if the stock goes up, the Put is still worth something for a while.

    New Put writers sometimes get panicky when the stock drops to near or slightly below the strike price. That doesn't mean you're going to get exercised, though. The $28 Put option you sold cost someone $1.50. If the stock is $27 and they make you buy at $28, you're still ahead $0.50 even if you turn around and resell that stock for $27. And even if the stock drops below your $26.50 break-even, that doesn't mean you're going to get exercised. The option itself may be worth more than $1.50 price delta due to what's called time value - that is, over time the stock could drop further and the option become even more valuable. So as long as the stock doesn't pay a dividend (Tesla doesn't), you could be sitting underwater on the Put for weeks.

    A few times I've been on the wrong side of selling a Put or a Covered Call that ended up not getting exercised because the stock price recovered by options expiration. And remember that if you sold the Put instead of buying the stock that day, getting exercised means that you ended up buying the stock cheaper than you could have bought it that day. That keeps you sane and solvent.
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  • 1/1/2015
    guest
    Figures, I picked up some more yesterday and it went further south today, but not by that much. I really am done at this point. Unless it really drops some more....
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  • 1/1/2015
    guest
    EDIT,,
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  • 1/1/2015
    guest
    The informaton above is accurate. Here is some additional information regarding options ...

    'American options' can be excerised at any time prior to expiration. If the options are 'in-the-money' at expiration then they are exercised on your behalf.

    The (theory is that the) value of an option is, among other things, a function of the volatility of the underlying stock, the amount that the option is in-the-money (or out-of-the-money) and the time to expiration. Even if an option is 'in-the-money' it should trade higher than its intrinisic value (current price less the strike price). Thus (theory says) options should never be exercised prior to expiration as the value of the option is higher than the stock price plue the intrinsic price.

    Reality is that I have written options that were 'in-the-money' and have had more than a month to expiration. To my surprise, the option was exercised! For some reasons, the option holder decided to exercise the option even though they could have sold the option for higher proceeds. There may have been tax reasons and transaction costs that made them exercise the option before its expiration.

    The lesson here? Be prepared for the option holder to exercise the option prior to the expiration date. And, please note that the probability of exercise prior to expiration increases with deep 'in-the-money' options.

    The Jan $15 puts are way out-of-the-money. Some of the higher August puts, with less than a month to go, could get exercised prior to expiration.
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  • 1/1/2015
    guest
    EDIT,,
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  • 1/1/2015
    guest
    My only real worry is my December 30 dollar options.... and a couple 35 dollar options i have for December that i bought on the way up.... shame on me :)



    Edit: all options i have are basic call options
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  • 1/1/2015
    guest
    Not to be debbie downer but those who may be a little over their skis should be aware that Elon bought 1.4 million shares last May using an enhanced $50 million line of credit from Goldman Sachs Bank. The share price has been lower since, most particulary before the October Ride Event and briefly when Rawlinson unexpectedly departed in January, but the company still had plenty of time to deliver. The details of the loan have not been publicized, but it wouldn't surprise me if GS Bank now has a tighter string on its money since the delivery timefrande has shortened. The share price is now about $2.5o below Elon's purchase price. If the decline continues, and GS Bank were to ask for additional security, Elon might have to sell some of his interest to cover. That event would not be viewed favorably by mutual funds who have not carefully investigated the longer term opportunity of this stock. I am in no way predicting this will happend, but those who are over-extended should be aware of the possibility and protect themselves accordingly.

    Permission to flame granted.
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  • 1/1/2015
    guest

    The current stock price doesn't really have much to do with the return in this case since the strike price is $15 and that is where you will buy in if your puts are called. First let's talk about selling 'naked' puts in which you are not SHORT Telsa shares. If you happen to be long Tesla shares, the puts you sell are still naked because you will be buying the shares at $15 if the put options are called, not selling them.

    Your return if the puts are called at the strike price would be 0.95 / 15 = 6.3%. that annualizes to 13.6% since there are 170 days left on the contract (6.3% x 365/170= 13.6%). Sounds great so far, but.... if the stock drops below $15 it's a different story. Between $14.05 and $15 you still make money on the trade, but anything below $14.05 puts you into the red, and it gets ugly fast. If the stock price closed at $13.10, for example, you lose double your 95 cent premium, a return of -100%.

    So how do you protect yourself? You could write 'covered' put options by being short an equal number of Tesla shares to the number of puts your write. If the share prices drops below $15, the shares you are short will simply be cancelled out with the shares you buy at $15.00. You keep your $0.95 per share premium for writing the puts, and you also made a handsome profit on the decline of the shares from their current value down to $15. A decline of $26 to $15 or below, for example, gives you a profit of $11 per share -- much greater than your 95 cent per share premium. If Tesla shares are flat you don't make anything from the shorted shares, but you still keep your 95 cent premium in any case.

    That sounds like a pretty good deal until you think about what happens if Tesla's stock price goes up rather than down. You pocket the 95 cents per share for the puts you sold, but any price gains above 95 cents put you into the red as your losses mount on the shorted shares. If the stock currently trades at $26, you are in the black up to $26.95, and you lose money as the stock continues to rise from there. If the stock settles into the mid 30's or more, your loss would be catastrophic.

    It's interesting that in selling either naked or covered puts, there is a distinct set of risks that could wipe out your whole stake or worse. Selling naked puts is a bullish because if the stock goes up, stays flat, or at the very least stays at or above $15, you pocket the entire premium. The downside as explained above is that if the stock drops below $14.05, you start to lose money very rapidly. Worst-case scenario: the stock is delisted. Before the delisting date option positions will be liquidated, and you end up buying worthless shares for $15 per share.

    Selling covered puts on the other hand is taking a bearish stance on the shares since all of your upside depends on the shares dropping right down to the strike price where your maximum gain is realized. The risk factor here is if the shares rise in value from wherever you short them, the $0.95 premium will get eaten up pretty quickly. Any takers still? :smile:
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  • 1/1/2015
    guest
    My analysis was in comparison to just buying the stock at market price today. As such, the return calculations are relative to that.

    Further, there's no downside "risk of having to cover" if you actually want the shares. You're just charging the market a premium to maybe make you buy later instead of choosing to buy now. There's definitely upside risk in what I was describing -- you don't actually own the shares and thus don't get rewarded if it spikes between now and January.
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  • 1/1/2015
    guest
    I would never write puts unless I was totally comfortable buying the stock at the strike price less the premium for the put. And, I would monitor the price movements until expiration as if I was long on the stock.

    In the current market, if I wrote some August puts and the options are excercised then I'd write covered calls to play the volatility.

    Options have tremendous leverage and one must always be prepared to lose ...
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  • 1/1/2015
    guest
    Still the same calculation since you'll be able to by 26/15 as many shares as you would buying it at the current price.

    That's true. If you are happy at getting in at $14.05 regardless of potential downside from there, it is a pretty good strategy. And if it never goes below $15 you just walk away with $0.95 no questions asked.
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  • 1/1/2015
    guest
    sold the August 25$ puts today.

    cmon TSLA time to bounce...
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  • 1/1/2015
    guest
    I read somewhere that Fidelity is selling their stake? Is there any validity to this? Is the only explanation for this much selling on no news. WTH!
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  • 1/1/2015
    guest
    I'm not sure I'd get into puts regardless of my level of understanding, but its a tempting concept if I'm understanding this correctly.

    At the moment, I'm seeing Jan 19 puts with a $24 strike for $2.40. Now I'm long Tesla (1 year +) and I'm not planning on trying to sell on crests (besides obviously on a short squeeze), and I'd be very happy to get to get in at $21.60 a share as its far lower than my average purchase price so far. On top of that, I'd ideally like to pick up another 25 or so shares anyway.

    In this circumstance, is there really any downside in selling a put other than I might not end up getting the shares I wanted? If it stays high, I either pocket the $2.40 per share, or I get the shares at below market price. If it goes low, I have to buy the shares but at a price that I'd be happy paying since I'm long anyway, and its lower than my average buy, current price, and the level at which I'd be setting a limit buy.

    If I were to do it, I'd probably stay away from the 24 put, but the concept of the 15 one is intriguing. I can't foresee any circumstance where the price would go that low besides near total failure of the company, and even then I'd expect Diamler or Toyota to attempt a buyout.
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  • 1/1/2015
    guest
    Woohoo! Picked up another batch of shares this morning. Glad my broker didn't get back to me yesterday, it means I get a bit of a better deal.

    This drop makes sense. A lot of big investors shorted when the stock was well over $30 and if I understand correctly they'll be selling now and buying back in to make a hefty profit off of those they have been manipulating. Once they're back in, you'll see good ratings and analysis and the price will rise.
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  • 1/1/2015
    guest
    How long can this insanity go on!!!! The entire year went own the toilet during the past week for no reason. Where is support?
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  • 1/1/2015
    guest
    Time to buy, Cali.
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  • 1/1/2015
    guest
    Isn't this exciting?! I wonder if we'll get below the January flash crash?

    I kind of feel sorry for folks who are speculating in the stock in the hope that it will help pay for their car. For me, I'm in it for the long run. I believe in Elon and Tesla; this short term stuff is mere noise.
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  • 1/1/2015
    guest
    I'm one of those guys and getting a bit nervous now...
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  • 1/1/2015
    guest
    The stock price does not determine if I will buy a Model S or not, but it will have a big impact on if I go with a 40 kWh or a 60 kWh battery.
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  • 1/1/2015
    guest
    If you are long on TSLA then you may consider selling some September $31 covered calls. If the stock climbs past $31 then you will be feeling good anyway. At that point, then you can do an 'up and out' strategy and close the position while opening a new position. If the stock is less than $31 then you will earn $0.50 per share and reduce your cost base.

    If you are long then covered calls should help a margin position.
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  • 1/1/2015
    guest
    Except for Nissan which is up .27 and Toyota which is at 0 (no change), all the car manufacturers are down today. Some are down significantly more than Tesla.
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  • 1/1/2015
    guest
    So, define short term for me. The stock is lower than it was 20 months ago.
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  • 1/1/2015
    guest
    Until they are regularly shipping, the stock price will rollercoaster. The reason for the dips is a lack of knowledge. Large investors get very nervous when shipments are delayed with no communication from the company. We think that we have a good understanding of the delays and that the delays are a good thing.

    If Fisker had been public, they'd probably have gone bankrupt.
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  • 1/1/2015
    guest
    Delete
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  • 1/1/2015
    guest
    Cali, WTH are you asking the same question over and over again for the last six months??
    �
  • 1/1/2015
    guest
    The New Mexico lawsuit+trickle of production+ inflated stock price and financial position with little margin for error.
    �
  • 1/1/2015
    guest
    Very simple... the market is skittish because it's not hearing about cars being delivered. I predicted this would happen a long time ago, and have been waiting for it. I'm about to buy in.

    Now speaking as the moderator, if you post another redundant WTH message I'll evict it to your OffTopic thread.
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  • 1/1/2015
    guest
    As far as i can tell the stock is down only because I wanted to buy more. 25$ was always pretty close to the low line (and 40$ for the high) if you draw straight lines on the highs and lows for all of the TSLA history.

    By September I'd guess we'll see if this will have been the time to bail out of Shorts and buy long long.
    �
  • 1/1/2015
    guest
    interesting direction it's taking right now.
    �
  • 1/1/2015
    guest
    Thank you for the deep, analytical contribution to this thread.
    �
  • 1/1/2015
    guest
    Don't get so steamed :biggrin:

    dscn0954.jpg
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  • 1/1/2015
    guest
    LOL !!
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  • 1/1/2015
    guest
    Guys, be nice. Eviction notice served. -mod
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  • 1/1/2015
    guest
    My broker said it was low because the auto industry is taking a hit, and he was in agreement with me that we should pick more up and sell these extra shares when he get up into the mid-30's again. Like others, I'm keeping a core position and just playing around with a few hundred shares to make the wait interesting (and hopefully profitable). If you don't know that the stock market is a game that is easily manipulated by Wall Street, you shouldn't play with volatile stocks like TSLA. The vast majority of my portfolio is in much more boring stocks that give consistent dividends. I rarely watch prices, and let my broker call if there is something up that we need to take advantage of (he can do the sweating if necessary). I'm prepared to lose everything that I've invested, although it would suck, but I don't have to threaten to jump off a bridge every time there is bad news.
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  • 1/1/2015
    guest
    I see T/A support around $25. I don't believe in T/A support lines, and plan to buy some more around $22. Fingers crossed!
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