TSLA Investor Discussions

[ckessel]

I'm a noob investor and trying to understand your strategy.

That's ok, I clearly know even less as I wasn't even sure if it was actually english .

[Zextraterrestrial]

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

[agelston]

I'm a noob investor and trying to understand your strategy. I understand the basics of put/call options. Basically buying a call option gives you the right to buy at the strike price on or before the expiration date, and buying a put options gives you the right to sell (short) the stock at the strike price on or before the expiration date (and make a profit by buying it back at a lower price) - but what do you mean by "I picked up a few more jan 14 15 strike puts cause someone was on the ask at 1.55."?? Does that mean you bought or sold the put option? Does that mean you 'bought' the put Jan `14 @ 15 strike price option, e.g. the right to sell the stock at a price of 15? At least that's the way I interpret it, but like I said I'm a bit of a noob when it comes to options and I don't really know option-speak very well. Did you mean something else or do you really think the stock is going to drop that low in the next few years to make a profit by selling the stock at a price of 15?

K so after basic puts and calls, you gotta understand spreads. bull or bear and calendar.

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.

https://dl.dropbox.com/u/27431/Scree...09.53%20PM.png

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)

https://dl.dropbox.com/u/27431/Scree...11.39%20PM.png

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.

[agileone]

... I think people who are getting cars a little later and using some stock money are lucky to be waiting a bit.

My plan exactly : just since 10 days now, my jan 13 calls are up just over 100% . Gets me a few "free" options on the car, and I am hoping the my June 13 call will pay for some more. I was holding 500 shares until early nov, but needed the cash to put more into ORT (another favorite of mine) and decided to keep some skin in the game with calls. I added Jan 14 calls today. Might have paid a bit much...

Agelson trades are too ballsy for me, but intriguing ...

[agelston]

My plan exactly : just since 10 days now, my jan 13 calls are up just over 100% . Gets me a few "free" options on the car, and I am hoping the my June 13 call will pay for some more. I was holding 500 shares until early nov, but needed the cash to put more into ORT (another favorite of mine) and decided to keep some skin in the game with calls. I added Jan 14 calls today. Might have paid a bit much...

Agelson trades are too ballsy for me, but intriguing ...

The Jan 14 calls have so much premium you might as well just hold less stock. But call spreads work 35/45 Jan 14 spread has about a 1:2 risk/reward which is good.

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)

Spread: https://dl.dropbox.com/u/27431/Scree...32.20%20PM.png
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.

- - - Updated - - -

Yah there should definitely be one more run (probably to 36) before a pullback if we close above 34.25 tomorrow.

30m
https://dl.dropbox.com/u/27431/Scree...53.16%20PM.png

[agelston]

Cash flow positive

Twitter / elonmusk: Am happy to report that Tesla ...

Sorry everyone who sold today. This is big. Gapworthy

[vfx]

Elon is the king of proclamations. Bet they were positive by less than a hundred dollars..

[brianman]

Elon is the king of proclamations. Bet they were positive by less than a hundred dollars..

They were wiating for your check, Eric.

[ahimberg]

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)

[Bardlebee]

Cash flow positive

Twitter / elonmusk: Am happy to report that Tesla ...

Sorry everyone who sold today. This is big. Gapworthy

Welp, I don't suppose they will be sub-30 any time soon.

I wanted to purchase more. Good news either way I suppose.