I wish Tesla would take the cash out of my account for the car I got on Saturday. I just want to use it for stock, seeing it sit there. I think people who are getting cars a little later and using some stock money are lucky to be waiting a bit. I think I sold 30% of what I had for my deposit and it has gone up a couple of dollars now.
Rock solid car
cant wait for the next gen or the one after that
- Joules 12/1/12 - Classic P85 - Grey&Lace #369 Zextraterrestials S(tory)
This has simple examples of bull and bear spreads, for both calls and puts.
Verticals - Basic Option Spread - Hedging Strategies - Options Spread Trading
This has examples of bull and bear calendar spreads (i.e. postions at different time strikes)
Time Spreads Diagonals - Diagonal Spreads - Time Spreads - Option Spread Trading
What I'm doing is a long put time spread but the shorter dated put is not at the same price as the longer dated put, i will sell as tesla pulls back to support (mid 33s). This is a diagonal which can be read about at the bottom of the time spread explanation page.
"Using a diagonal spread, is simply another way to modify a bull vertical spread or bear vertical spread and for a trader to optimize his or her market objectives based on an analysis of implied volatility levels."
Thats essentially what I'm trying to do, because front month implied volatility for puts on tesla is dramatically lower then implied volatility for longer puts, I'm trying to capture this decay. So sell the March puts, buy them back in january/february when IV has decayed, sell august puts, buy back in march/april when they have decayed, sell july puts, buy back in june/july when they have decayed, etc. Should be able to do it able 3-4 times before Jan 14. The Jan 14 15 strike calls act as the hedge in all of these trades, reducing my margin to a much smaller amount then if I was doing naked puts.
Again, Here are the current IVs for puts of different strikes at different months.
Whats key is difference in IVs. They are dramatic, which should not happen in a 'perfect market' because they are exploitable. This decay is also what makes Tesla incredibly expensive to short with puts.
Here are the current IVs for puts on SPY (sp500 ETF)
Much less difference in month IV, a strategy like mine would not work here. There is no decay to capture.
Basically, this strategy will work incredibly well if Tesla trades in the 28-40 range for the year. It will work very well, but not as well, if tesla slowly declines to the mid 20s and establishes a trading range there. It will be slightly, but not significantly profitably if tesla skyrockets fast. If it tanks sub 20 within 2 months, complete loss on my set margin (Because I have to purchase tesla stock because the shorter dated puts are exercised) but the Jan 14 15 strike puts save me from loosing more $ then in my account.
Basically this postion is that Tesla's going to establish a range >40 and stick with it. If it goes <40 my naked call postion is soooo profitable. i'll be happy either way.
Agelson trades are too ballsy for me, but intriguing ...
Here's the P&L of a Jan 14 Call spread vs just a Jan 14 naked call, assuming about the same amount of capital risked (3.20 vs 3.90)
Naked Call: https://dl.dropbox.com/u/27431/Scree...33.31%20PM.png
If you think its going to 100 just buy the calls. Otherwise, spreads cause IV is high.
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Yah there should definitely be one more run (probably to 36) before a pullback if we close above 34.25 tomorrow.
Elon is the king of proclamations. Bet they were positive by less than a hundred dollars..
TesS: P85 Sig. | Mercury: Petunia ate five donuts.
Truly Electric Spaceship-Like Adventure ~ Signature Model Spaceship
PLEASE NOTE: these musings are the copyrighted intellectual property of the author, and are intended as part of a conversation among the Tesla Motors Clubs membership. My words may not be quoted by any third party outside the Tesla Motors Clubs forums, without my expressed consent. Especially the NYT, which is clearly ethically challenged.
I got out today too with my last bits of my TSLA play money. I've been selling when I get >10% positive, buying back in on the dips, will probably get back in when it dips under 32 again. (made 20-25% this year, only holding TSLA for about 6 months of it)
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