Short-Term TSLA Price Movements - 2013

[SuryaDham]

thanks for the answer...

i have IB margin account with less then 110K, how come?

from my 6 months with them i have no complains at all though i wish that part of their service they could block dumb moves that i've done

i still don't get the level thing...

You probably have a Reg T margin account, not a portfolio margin account.
Difference is that in a Reg T margin account the margin is calculated based on each single position, while in portfolio margin account margin is calculated by looking at the overall risk of the portfolio.
Example: You buy a Dez 180 call today, you sell a 190 call tomorrow. In reg T account you need more margin for selling the call than in a portfolio margin account, since portfolio margin sees that you already have a 180 call, so the risk is only 10, not 190.

Also in portfolio margin acct margin requirement for buying stock is only 15%.

 

[redharel]

You probably have a Reg T margin account, not a portfolio margin account.
Difference is that in a Reg T margin account the margin is calculated based on each single position, while in portfolio margin account margin is calculated by looking at the overall risk of the portfolio.
Example: You buy a Dez 180 call today, you sell a 190 call tomorrow. In reg T account you need more margin for selling the call than in a portfolio margin account, since portfolio margin sees that you already have a 180 call, so the risk is only 10, not 190.
Also in portfolio margin acct margin requirement for buying stock is only 15%.

in your example the risk is only the premium as it's a long call spread but also when it's a short call spread even if it's Reg T margin account it's stiil risk of 10 points.
maybe you're right about the buying stock margin but i'll have to check it as i'm not sure about that

- - - Updated - - -

http://www.fool.com/investing/general/2013/09/04/top-insiders-selling-tesla-shares-in-august.aspx
I know its old News, but might be some headlines on it today.

the big buys know about that before it actually executed and it's published last week so it'll have zero affect today

 

[Jonathan Hewitt]

Call your broker and tell him you need level 3. Not sure if it will work, but you can only lose money if you don't have highest level of clearance. What is highest anyway? I have level 3 with Schwab, I think that is highest correct?

I've been thinking of it...I sent in an application a couple weeks ago requesting it and got a rejection form in the mail saying I have "insufficient trading experience." Hopefully talking to someone on the phone can persuade them otherwise, but it could be a rule thing that can't be broken. Maybe threatening to go to another brokerage would help

L3 is spreads, L4 is naked writing. L4 would be awesome but I really need spreads at a minimum...

 

[kevin99]

Margin, margin, margin, you probably don't won't to count on it on a regular basis. You maybe able leverage it once in a while without getting caught. However better reserve it for the catastrophic day. It sure will come if you use margin regularly.

 

[Citizen-T]

The more active you trade the more compounded this effect is over time (Einstein once said compound interest is the strongest force in the universe, one could say something similar about compound "transaction costs").

This is not a compounding affect. The cost of your transaction fees increase linearly with the frequency you trade. You could make the argument that by spending more money on fees you are missing out on the compounding that money could be doing had it been invested instead, but invoking Einstein here is not appropriate, IMO.

Sorry, just a pet peeve of mine. Identifying exponential growth trends is so important, but it is equally important to not mistake linear growth for exponential.

 

[kevin99]

Margin, margin, margin, you probably don't won't to count on it on a regular basis. You maybe able leverage it once in a while without getting caught. However better reserve it for the catastrophic day. It sure will come if you use margin regularly.

 

[twinklejet]

Any comments on e-trade? :/

 

[kevin99]

Margin, margin, margin, you probably don't want to count on it on a regular basis. You may be able to leverage it once in a while without getting caught. However better reserve it for the catastrophic day. It sure will come if you use margin regularly.

 

[Citizen-T]

Any comments on e-trade? :/

Meh. It is pricey and not great technology. I have a account with them, but it isn't the one I actively trade in. Fine for occasional trades. If you want to spend $10 a trade, something like Think or Swim is probably better tech for your money.

 

[redharel]

Margin, margin, margin, you probably don't want to count on it on a regular basis. You may be able to leverage it once in a while without getting caught. However better reserve it for the catastrophic day. It sure will come if you use margin regularly.

i do it on a regular basis though one time i've payed the price for it.
that was the GS downgrade or upgrade day whatever you called it but it was my mistake as my SL got forgoten and i couldn't hold the shares overnight and missed the correction the day after

 

[TSLAopt]

You could make the argument that by spending more money on fees you are missing out on the compounding that money could be doing had it been invested instead, but invoking Einstein here is not appropriate, IMO.

With all do respect this part of your quote is what I am implying...if you make 100 dollars profit from one broker and 102 dollars profit from another from the lower transaction cost then I am assuming you will use the full profit for your next trades (or at least the full profit to gauge how much you want your next trade to be...if your account is now 102 dollars instead do 100 dollars and you want to leave 10 of cash aside then you will invest 92 on your next trade instead of 90) as this is what hedge funds do and what most active traders do as well with their pool of money in their brokerage account. In this case it is 100% absolutely a compounding effect over time and should not be overlooked...the more active one is the more this is compounded adversely in your return on your trading, the same way Einstein phrased compounding interest as being the most powerful force in the universe.

 

[aznt1217]

Hello All,

I think this is an interesting read. MBA Buddy linked me to his professor's blog. Let me know your thoughts. I'm going to give it a thorough read tonight and write my thoughts on it.

Musings on Markets: Valuation of the week 1: A Tesla Test

 

[MikeC]

Hello All,

I think this is an interesting read. MBA Buddy linked me to his professor's blog. Let me know your thoughts. I'm going to give it a thorough read tonight and write my thoughts on it.

Musings on Markets: Valuation of the week 1: A Tesla Test

I'm assuming this professor's blog is the reason that TSLA is down today. Two things I notice is that he writes that Tesla is still paying down the DOE loan and that they are not profitable yet. It could be argued that they aren't profitable on a GAAP basis, but there's no doubt they paid off the loan so the professor loses some credibility there. He also doesn't account for the high number of retail investors who believe in the car and just want a piece of the company regardless of valuation.

I think the article is fair from a "valuation" perspective - i.e. it's useless. Valuation is not the same thing as value.

 

[vgrinshpun]

Margin, margin, margin, you probably don't want to count on it on a regular basis. You may be able to leverage it once in a while without getting caught. However better reserve it for the catastrophic day. It sure will come if you use margin regularly.

I use it regularly since March, and never had a problem, even during the GS dip. The key is to be conservative and use only 70-75% of what is available, and buy insurance in the form of puts in especially uncertain circumstances.

 

[Norbert]

I think the article is fair from a "valuation" perspective - i.e. it's useless. Valuation is not the same thing as value.

The professor might agree...

 

[Robert.Boston]

[moderator's note: discussion of merits of a potential secondary were merged into Should Tesla make another public offering? ]

 

[fjm9898]

Greenage!

 

[james_chen70]

It has been very quiet on this thread here. Posting something just to be sure that the website is still working.

Any thoughts on the close today? Looked pretty weak. Although you can say it is the second highest close, which can be viewed as pretty encouraging.

 

[fjm9898]

Volume was quite low. The quick run up back to even after lunch was the only shinning light. Maybe Elon's tweet about his cross country trip did it?
I guess this being the second slow news week for Tesla most people have a wait and see attitude right now, just waiting for the next bit of news to know what to do with the stock. It would be nice to get some other small catalyst soon or we could see the stock start to break down. (Although I still doubt that) But it just might if people get bored with the lack of movement and think its at a peak

Would like to see some X news come through the wood work.

 

[Cameron]

It has been very quiet on this thread here. Posting something just to be sure that the website is still working.

Any thoughts on the close today? Looked pretty weak. Although you can say it is the second highest close, which can be viewed as pretty encouraging.

Fairly light volume today, I guess not a whole lot of news to really push it one way or another. I'm curious to see how Elons cross country trip goes, I almost feel like he has something special planned..