Title says it all
Rx I hope. But am willing to wait it out
Covered calls or funky straddles and stuff? Those are great numbers maybe you should have been a quant :-).
Tpilot - nothing esoteric. Mostly selling SPY naked puts, after a selloff and a pop of the VIX. Some vertical spreads, too. An acquaintance of mine who used to run the derivatives desk at a major brokerage in NYC once told me it's better to sell insurance than buy it.
It would seem to me that someone might analyze the Model S and X Order & Delivery spreadsheets and figure out how many cars that Tesla has shipped in Q3 and that might give them a leg up in figuring where the stock will go when Q3 numbers are announced. Just sayin'
IF the stockholders vote AGAINST the merger in October, will the shares go back up???
Was haggy speaking another language?
The one thing I wish I could absorb is trading.
Haggy sold a monthly $200 put which gave him an $11 premium and dropped his net purchase price down to $189 if it were exercised.
I'll buy more after the bounce...
@Silver - I think he meant to have another t on the end of "put." He was bragging about his golf game. Makes total sense to me; I don't know what your problem is.
PhillyGuy agrees... he jumped back in Friday.
"The one thing I wish I could absorb is trading."
Options can be complicated. At its core, there are puts and calls, and they aren't too hard to understand, but there are all sorts of complex strategies that you'd have to read books on to understand. And since I don't like long posts, I won't get into all that.
A put gives you the right to sell, but not the obligation to sell, a given security at a given price by a certain date. You pay a certain amount of money for that put. If you buy a put for Tesla at $190 that expires next month, you are betting that the price will go below $190. If it doesn't, your put expires worthless. If Tesla drops to $100 before your put expires, you essentially buy shares for $100 and sell them to whoever sold you the put, who has to pay you $190 for them. In practice, you'd likely sell your put to somebody else before it expires (i.e. tell your broker to sell it and you don't know or care who is at the other end.) Most people who buy puts lose their entire premium, but are hoping that on the ones that do make them money, they will win big. They rarely do.
At the other end, somebody is selling the put. It might be somebody who bought it and wants to get rid of it, either to get some money back or to make a profit. Or it might be somebody who is "writing" a put, meaning selling a put as an opening transaction, not one he owns. If I write a put, I have the obligation to buy the shares at a given price before a given date if whoever bought the put wants to put the shares to me. In real life, the person is likely to sell the put, or hold it until expiration, at which point if it's in the money, the broker puts the shares to me automatically and gives the person the difference between what I'd have to pay for the shares and the market value of them.
While buying a put is a gamble, since you don't really know where a stock price is going in the short term, you can't lose more than what you paid for the put. So if you are new to options, your broker will probably let you buy puts. I see writing puts as less of a gamble, but brokers see it the opposite way. I need to be able to cover the value of the shares even if the price drops to zero.
The reason I see it as less of a gamble is that if it's a stock I would buy anyway, and I write the put at a price I would be willing to pay anyway, then I'll be no worse off than if I had bought the shares at that price -- except I get to keep the money that a person paid for buying the put no matter what, so it really means I get it cheaper.
So for years, I've been writing puts on Tesla, I've been getting paid for them, they expire worthless, and I start again. This time around, if the price stays under 200, it will be as if I bought them for $189/share. If the shares drop to $180 by expiration, you can think of it as if I lost $20/share (minus premium, meaning I lost $9 per share) but I think of it as if I bought the stock for $189 and it went down for now, but I think it's worth more than that.
Once I own the shares I could write a covered call, but that's another story.
"And since I don't like long posts"--What have you done with Haggy?
It's not that complicated & very common practice among many investors.
The best way to invest is to buy something of value that will increase in value and trade as little as possible. Buying something that's undervalued when the underlying company is doing well and will continue to do well is even better. Buying shares in a company that's not making money but has enormous potential makes sense only when you understand the ramifications of the long term business plan, but that also means not trading much because it could take years or decades. That's where the line between investing and speculating can get blurry.
Options typically require more frequent trading although there are some (LEAPS) that go out more than a year. Buffett would call that short term. Options trading isn't investing, but can work in conjunction with investing to generate income, get long shares at lower prices, or to agree to get rid of shares you'd sell anyway at a price that's too high and get even more than that amount if it gets there, It's also a way to speculate and potentially make a lot more as a percentage if you are correct, but for most people that backfires. There's a good reason that brokers won't let most people trade certain types of options.
Totally agree and you're a smart investor. BTW Buffet does invest in long term option trading as he writes 10~15 year puts. He does that when he sees good value in there. It's still long term investment not trading. He's also known to have wrote puts when he's ready to acquire certain stocks he sees with good value like you did with TSLA
not much use to Buffet in 15 years
Bh, that post of Haggy's was so terse, I'm still trying to decode it. I wish he would give a bit more explanation. ;-)
Abridged version. Buy low, sell high.
"Abridged version. Buy low, sell high."
No wonder I have been losing money. I keep doing the opposite. :-)
Mathew98 | September 4, 2016
Abridged version. Buy low, sell high.
Options version - Sell high, expire worthless.
I don't think a hypothetical delay announcement for the Model ≡ in the middle of next year will affect the stock too much because that possibility is already built into the current price. So long as Tesla performs in the future as it has in the past (warts and all), the stock should meander. A surprise, like EARLY shipment of the Model ≡, would change the game. The stock is discounted due to uncertainty, and the way up for it is to remove uncertainty.
Tesla in talks for an expansion in the Philippines, says country’s biggest electric utility
Honestly trying to recall bad decision made by Tesla. I can't.
Remember all that talk about falcon doors? It was all noise. Model X is a beautiful gorgeous car, and falcon doors are an important part of it.
Tesla continues its positive expansion and I am willing to give them as much support as I can.
^^^^ thank you.
If you are a long term investor then buying now, or at $180 or $220 will make little difference. If you are a trader then it makes a great deal of difference.
I do not recommend people do any 'option' trading with money they can not stand to part with. Anyone who has done option trading will tell you all about their 10 baggers...and if they are honest, admit they lost their entire invested amount. Basically, option trading is legalized gambling...and yes, I have had 10 baggers and other times where I have lost my entire investment.
Seems like a great strategy to me. Thanks Haggy, that really was very helpful.
Tell us the truth, did your keyboard batteries die at the end of the first short post?
Thanks Haggy, that really was very helpful.
I think he said that because I joke with him about his long ppsts.
Cover options are much safer in limiting loss than naked ones.
It's also might be more financially beneficial to trade prior to expiration date.
"AlMc | September 4, 2016
If you are a long term investor then buying now, or at $180 or $220 will make little difference."
Say what? you can own 18% more shares by paying $180
@sp-tesla: Point is that if you think TSLA will be worth $500-1000+ one day you will be a Teslanaire either way.
In addition, my point was more to show the difference between investing and trading (as the discussion had turned to options). You can make money either way..but 'safer' to do 'investing'
It is almost never wise to buy before a follow-on share offer. Better strategy is to buy the offer, with discount. Tesla will be raising $3 billion by year end. Why get in front of that overhang? Tesla will "tell" you what it thinks the shares are worth when it sells them. Notwithstanding Elon's attempts at pumping the stock, for which he may get an SEC visit, there is obviously near term news risk to the downside - he says so in his plea to employees. Running against that scenario is the definition of gambling.
The shorts only look at boiler room bs. The fact that 28 million shares need to be covered can mean UNLIMITED losses. Some analysts list Tesla at 350/share. If the stock were to go there they would need $10 billion to cover.
Fear doesn't work with those who have the facts and can see the big Gamble by shorting. I continue to buy on weakness and am grateful for those who do gamble.
Agreed. Look for value and forget about timing the market. That never works. Although two strategies, dollar cost average in and buy on dip are frequently used by smart investors (not traders) ready to pick up good shares. People like Warren Buffet and Peter Lynch always say don't try to predict short term market variation because nobody can. That simple realization separates a smart investor from a smart ass investor.
This turned into a good learning thread. Interesting views..
Many people have misconceptions about stock ownership and stock trading. Stock ownership is pure and simple to let investors to own a piece of the business. Trading on stock markets is just to add liquidity to a stock to make it more attractive but is not an absolute necessity. Many private companies are do well without having to be listed on exchanges. Stock trading is certainly useful but unfortunately many on the Wall Street took it as a tool to generate profit. They would do anything to increase their chance to make more profit from stock trading without regard to the underlying business.
Real investors understand this well. Warren Buffett once said he would buy a stock only if he'd still do it even if he knew the stock marktet will be closed for three years after he made the purchase. That's what you do when you want to invest instead of trade. Just pick a good company and ignore what those people (traders) who have an entirely different objective say. When you invest in a company only things you should care are how successful the company could be and what's the chance that company will be successful. To me Tesla is by far the best company I want to own.
Many private companies do well...
Short stock position increased over 1.8 million to 27.9 million shares.Should be interesting very soon. Watch the trolls post.
i'm ready for them! :)
Me too. Can't wait!
With the market down big the propaganda flows. Like Millenniums take huge risk with Tesla, Was AP to blame?
Can Tesla live up to guidance?(Who's guidance?) , no more discounts(where?) and so on. Yet Volume is weak suggesting the shorts can't seem to piggyback on a down market.
Friday options will invite some degree of manipulations with continued downward pressure in the morning. The shorts will cover by the afternoon as they don't want to hold the bag over the weekend when the (positive) Q3 delivery numbers are announced. Look for a bounce back into next week.
Only if I have more dry powder...
How's my prediction so far?
With an 8 to 1 merger of SolarCity I like that stock with its low today. I have been accumulating it also.
The shorts have been at it with their paint shop concerns, buses and other very non-serious news.
picked some up this morning
Oh, I feel a tingling sensation down my shorts. Is this the beginning of the short squeeze?
Were my predictions working out for y'all?
@Mathew98: It is a mini squeeze now. Hopefully EM will announce that Q3 was profitable either now or at Q3ER. I am very happy with the delivery number as it is 10% higher than my best case scenario.
However, we still have to get through the merger with SCTY.
Short term I do not have the tingling feeling. I hope you are correct. It is still not to late to buy TSLA and I would be surprised if at some point you can't buy it sub $200. In fact, buying SCTY now arbitrages you to well below $200.
TSLA is a rollercoaster ride. We are on the ascension part of the 'loop-d-loop'. Eventually we will arrive above ATH, but it is not in 2016 IMO.
As I said earlier I don't care about my stock holding but I sure like to see those disgusting shorts get killed. I don't even mind if stock price comes down later after everyone of them got the margin call.
I have been accumulating Tesla for 4 year's+. A few years ago some have pegged the stock at $2200/share in eight years. But with the energy sector growing that price may be conservative. You ain't seen nothing yet.
The arbitrage works out to a 25% discount at 8to 1 SolarCity to Tesla, according to my calculations