Short-Term TSLA Price Movements - 2014

[LonghornDub]

A broker could ask "are you buying a naked put or protective put?", and is a useful adjective in that context that's referring to a naked long put.

I've never once had a broker ask me that, because it doesn't matter for my margin requirement and doesn't matter for the execution. A long put is a long put. My broker doesn't care why I'm buying it. (Though I grant you that brokers may differ, and this could be relevant to somebody using a broker with different margin requirements that distinguish between a protective put and a long put with no underlying.)

Again, naked just refers to whether you hold the corresponding position in the underlying and not whether it limits risk in certain ways.

I agree that's what "naked" literally means, but the connotation is such that it ultimately refers, in context, to the limitation of risk (or lack thereof) brought by holding a long or short position in the underlying, as the case may be. I have literally never once heard anybody--whether a broker, a prop trader, or even someone in sales at an i-bank--refer to a long put or call as "naked." Again, you're right that they technically could refer to it that way, but nobody does. It's understood that "naked put" means short.

If a broker wanted to distinguish between a long protective put and a long put with no underlying (as in your example above), I am confident the broker wouldn't use the term "naked." Because of it's common usage, that would be potentially confusing.

 

[DJ Frustration]

Earlier this year Adam Jonas of Morgan Stanley raised the Tesla Motors price target to $320 and reiterated an Overweight rating, while calling it, “…arguably the most important car company in the world.” Last week he downgraded Ford from Overweight to Underweight and reiterated an Underweight rating on GM. He cut his price targets for both of them to beneath that day’s price, while at the same time saying he sees “Tesla Motors as the only US auto manufacturer stock offering any upside to fair value.”

The only significant thing I see changed during the last seven days is that the Nevada government quickly provided full support for the battery Gigafactory.

So what was behind Jonas' development of the thesis he published today? Something doesn't seem right. It was odd the way he hedged his opinion by still praising Tesla, while adding some bizarre new criticism. Jonas' nonsensical commentary seen today leads one to consider the possibilities that he is bowing to pressure from superiors or the auto industry he covers.

What if Adam Jonas also noticed and got some sort of confirmation of the post-retooling ramp up delay? In the order threads, quite a number of folks have noticed a 1 month delay for delivery.

 

[AlMc]

Are they creating space for Alibaba IPO or missing the story for downturn?

This has been one of my concerns recently. I know it is not the only cause for today's drop but I do think taking profits out of one stock to invest in an IPO that everyone thinks will be the next 'momo'/growth stock is a big factor.
Personally, I had gotten out of all my J'15 LEAPS over the last 2-3 weeks to have cash for the J17s and 'possible' Q3ER 'dip' but I have been deploying some of it to buy stock (dip not catch the knife..got at 259) and J16 LEAPS.

 

[FreeOfPge]

Whew, what a morning - sold TSLA w/underlying @ $262.50, for the first time since Dec 2010 I'm without Tesla long position. Not sure why it feels right to say something here, maybe 45 months of obsession has fried my mind!!!

 

[aznt1217]

And here come the next round of shorts. "Pros" are on CNBC suggesting shorting the stock.

 

[JRP3]

What if Adam Jonas also noticed and got some sort of confirmation of the post-retooling ramp up delay? In the order threads, quite a number of folks have noticed a 1 month delay for delivery.

This is my strong suspicion.

 

[hockeythug]

One of the major concerns that the analysts noted is the failure of other electric vehicles across the developed world, which could lead to the industry to lobby for a "substantial revision" of air quality regulations "to slow down the pace of milestones they have little hope of achieving (besides Tesla)."

Can someone explain this?

 

[Jack6591]

How low will it go? To make Elon happy.

 

[aznt1217]

Can someone explain this?

Basically meaning that other EV's are behind schedule for regulation milestones. Instead of increasing the speed of development, they are asking for delays (except for Tesla who is at the forefront and doesn't need to worry about air quality). Translation: Mass market EV adoption will be pushed back and it goes along with MS' thought that Tesla will be a niche player-- this jives with Elon's remark about replacing the entire Auto fleet. Even if Tesla sells 500k cars annually it'll only be like 1% of all the cars in the world.

- - - Updated - - -

How low will it go? To make Elon happy.

At the $250 mark, Elon said he thought the stock was fairly valued in the short run. His words specifically were "about right"

 

[hobbes]

I finally read a wrap-up of the Adam Jonas report, too - it really doesn´t make any sense argumentation-wise. What especially strikes me:

2. China demand growth may be severely limited by Tesla’s ability to develop the supporting dealer and service infrastructure. Tesla is not interested in achieving short term profitability at the risk of disappointing new customers, particular in the world’s largest, fastest growing car market. We believe demand for the model S and X in China will far outstrip Tesla’s ability to meet it…

From: A Tesla Bull - Stocks to Watch - Barrons.com

Contradicting himself within a paragraph.

 

[eepic]

I finally read a wrap-up of the Adam Jonas report, too - it really doesn´t make any sense argumentation-wise. What especially strikes me:

From: A Tesla Bull - Stocks to Watch - Barrons.com

Contradicting himself within a paragraph.

Actually I'm starting to wonder if it's other media spinning AJ's note negatively? I'm reading another citation that ends with this:

But make no mistake, Morgan Stanley is far from bearish on Tesla. The firm is sticking with its overweight rating and $320 price target on the stock despite its cautionary note.
"We are big believers in Tesla's strategy and stand firmly by our claim that it is the world's most important car company," Mr. Jonas said.

 

[yngwie_2012]

bought 10k$ calls on tesla. i like this dip

 

[maoing]

Me too. Add 2 Mar. 2015 calls for $215 strike . Will add more if we can dip to $240 and more + if we get any chance to $220 (close to 200MA) again!

bought 10k$ calls on tesla. i like this dip

 

[FredTMC]

It'll be interesting to see if we bounce off the 50day MA ($248). A great buying opportunity here... Bouncing off support

i doubt we go down to 200d MA unless market comes unglued with Fed action

 

[jhm]

Well, 250 for a stock worth 320 sets you up for a 28% gain.

 

[aznt1217]

Me too. Add 2 Mar. 2015 calls for $215 strike . Will add more if we can dip to $240 and more + if we get any chance to $220 (close to 200MA) again!

The premiums are crazy on those options! May I ask why that particular one?

 

[Newb]

Charged EVs | New report examines Tesla battery technology and costs

Do you think this report might have affected TSLA as well?

 

[FreeOfPge]

FWIW, it appears as if scty is being pulled down today for no reason other than tsla's drop. It's one of the best no brainer buying opportunities to come along in a while...

 

[eepic]

I've never once had a broker ask me that, because it doesn't matter for my margin requirement and doesn't matter for the execution. A long put is a long put. My broker doesn't care why I'm buying it. (Though I grant you that brokers may differ, and this could be relevant to somebody using a broker with different margin requirements that distinguish between a protective put and a long put with no underlying.)



I agree that's what "naked" literally means, but the connotation is such that it ultimately refers, in context, to the limitation of risk (or lack thereof) brought by holding a long or short position in the underlying, as the case may be. I have literally never once heard anybody--whether a broker, a prop trader, or even someone in sales at an i-bank--refer to a long put or call as "naked." Again, you're right that they technically could refer to it that way, but nobody does. It's understood that "naked put" means short.

If a broker wanted to distinguish between a long protective put and a long put with no underlying (as in your example above), I am confident the broker wouldn't use the term "naked." Because of it's common usage, that would be potentially confusing.

A good broker would use terminology that is unambiguous where possible. Empirically, your reference to "naked put" was taken as a naked long put by others in this forum (and myself too at first glance) who could easily be clients of options brokers. Anyway, maybe we'll just have to disagree on this. I do agree with your broader point about put-call parity though.

 

[maoing]

I notice the premium is high. But I paticularly interested in March. 2015 ITM call because big Q4 guidance/delivery, huge 2015 guidance and Model X reveal are all between now and March 2015.

The premiums are crazy on those options! May I ask why that particular one?