Investments Trade Log

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Dream of Freedom
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Re: Investments Trade Log

Post by Dream of Freedom »

@Seppia

The January 2022 620 puts currently trades at $146 per share. Every contact is for 100 shares meaning $14600 per contact. I don't know what position size you have in mind, but that's why you would want a spread to lower the cost.

So let's go over some possibilities.

A. You buy January 2022 630 puts and sell January 2022 600 put of course you can play with the strike prices
It does cap your upside some but with the lower outlay it's better from a risk/reward point of view

B. You buy January 2022 630 puts and sell February 7 2020 610 puts. When the February leg expires or you buy it back just before it expires if it is in the money. Then you sell one for next week and repeat. The idea here is that the time value of the contact decreases faster and faster as the expiration date nears. So you can collect the difference in theta between the short and long term contacts.This is a bit more work than A

C Pair trade. You can short Tesla and go long a different automaker you like. This would help to lower market risk. So if the market as a whole goes up you won't be hurt as much.

D you simply short the thing with a stop loss at what you are willing to risk.

Seppia
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Re: Investments Trade Log

Post by Seppia »

Thanks all for the kind answers.
I just figured out I would need to open an account with interactive brokers just for that, instruments aren’t available in my trading accounts.
This would generate the need to produce much more tax documents (interactive brokers isn’t based in Italy).
I guess the idea of shorting TSLA will be put in my “too hard” pile.

thedollar
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Re: Investments Trade Log

Post by thedollar »

@Seppia

I'm glad. I think we all agree that the intrinsic value does not match market cap, but shorting or buying put options for the next 1-3 years would be a bet on market irrationality/current valuation method changing in addition to a bet on Tesla not continuing its high growth. We have different views on the growth, probably, but market irrationality seems to have been carrying on for years looking at tsla. Why would it suddenly end in the next few years? Just my opinion the valuation is currently mostly based on 'forward looking statements' and I don't think it will suddenly change to a P/E valuation comparable to other car companies. They'll continue putting out forward looking statements and people will continue to bet on those.

thedollar
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Re: Investments Trade Log

Post by thedollar »

For the log:

tsla @ USD 758

Gonna hold onto my position despite the massive gains

theanimal
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Re: Investments Trade Log

Post by theanimal »

That's insane

Jason
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Re: Investments Trade Log

Post by Jason »

I have some Zoom Video. Popped 15% yesterday due to a Microsoft issue as well as CoronaVirus fears. Video conferencing preferable to traveling and face to face meetings.

IlliniDave
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Re: Investments Trade Log

Post by IlliniDave »

Jason wrote:
Tue Feb 04, 2020 6:43 am
I have some Zoom Video. Popped 15% yesterday due to a Microsoft issue as well as CoronaVirus fears. Video conferencing preferable to traveling and face to face meetings.
Interesting observation re VTC. Had a little surge after 9/11 too, but ultimately people missed their frequent flier miles. I'm not a stock-picker but I've heard indications some companies are rethinking their supply chains and if the Chinese lockdown persists they might start acting to shorten them. That'll potentially be an additional boost to N. American manufacturing, and Mexico could benefit a lot.

Jason
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Re: Investments Trade Log

Post by Jason »

I was reluctant to pick Zoom but an in depth analysis on the Motley Fool Board swayed me. I always remember the sub-plot in Infinite Jest re: teleconferencing.

However, more and more people work remotely. Also, after this health event, I could see it being necessary in the same way data centers/Wall Street firms have disaster recovery facilities always at the ready - not used on a day to day basis but there in case of crisis.

RE China in General: The bottom line is promoting capitalism while maintaining Communism will always have an air of suspicion and this crisis is a reminder of that. The cultural/social/political structures of republican/democratic regimes are more conducive to capitalistic enterprise. I don't own any Chinese stocks. The impact of this will dwarf SARS on their economy.

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Lemur
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Re: Investments Trade Log

Post by Lemur »

@thedollar

I'm not touching TSLA because the price just doesn't make sense...its ludicrous high..and I won't buy puts either because I can't gauge how long the FOMO will last. Oh well.

Seppia
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Re: Investments Trade Log

Post by Seppia »

thedollar wrote:
Fri Jan 31, 2020 6:15 am
market irrationality seems to have been carrying on for years looking at tsla. Why would it suddenly end in the next few years?
Not being sure about it is why I considered betting on price declines, but only without the infinite downside of actually shorting.
I believe nobody with a brain should be sure of anything wrt the markets, so I personally like to think in probabilistic terms.
Tesla is now trading at around 7 times revenue, has been losing money since its inception, has an impossible accounts receivable position that they refuse to explain and has now stopped growing its top line since a few quarters (look closely).
My bet is that they are running out of bullshit.
Also, these price movements have a gigantic
neon BLOWOFF! sign flashing above them.
I can totally see this going to $1500, but similarly to bitcoin closing in on $20k, I believe gravity is going to take hold at a certain point.
Lastly, when fundamentals aren’t there, the only thing realistically keeping this run alive is the greater fool theory. Issue with that is as soon as it stops working, it drops fast.
We shall see.
I would bet $5000 with anybody that within 5 years TSLA is closer to zero in value than it is to today’s market cap (meaning: it will at least halve in value)*.


*If there’s anybody willing to take this bet here we can look into ways of making it happen.

5ts
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Re: Investments Trade Log

Post by 5ts »

If anyone can predict TSLA then you obviously can read the source of the Matrix.

George the original one
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Re: Investments Trade Log

Post by George the original one »

Seppia wrote:
Tue Feb 04, 2020 6:25 pm
I would bet $5000 with anybody that within 5 years TSLA is closer to zero in value than it is to today’s market cap (meaning: it will at least halve in value).
Are any of Elon Musk's companies making money? Because as far as I can tell, he finances the existing companies by creating a new one (using a very good story).

jacob
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Re: Investments Trade Log

Post by jacob »

Seppia wrote:
Tue Feb 04, 2020 6:25 pm
I would bet $5000 with anybody that within 5 years TSLA is closer to zero in value than it is to today’s market cap (meaning: it will at least halve in value)*.
*If there’s anybody willing to take this bet here we can look into ways of making it happen.
That's technically a barrier option which probably doesn't exist for this "problem". However, Jun2022 puts at ~half price strikes currently cost $50ish (x100 for the contract), so you could buy one contract. You'd start making money at $50 below the strike, so set strike at $425 and start making money below $375.

Check out the ivol chart first though: https://marketchameleon.com/Overview/TSLA/IV/ ... TSLA options are currently very pricey. Cf the average market which over the past several years has been in the 10-20% range.

Seppia
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Re: Investments Trade Log

Post by Seppia »

Lol this stock is completely insane, lost 17% today.

5ts
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Re: Investments Trade Log

Post by 5ts »

I think it's going to bounce all over the place for a while. I considered options but I'm not going anywhere near this beast, too volatile.

theanimal
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Re: Investments Trade Log

Post by theanimal »

George the original one wrote:
Wed Feb 05, 2020 12:07 pm
Are any of Elon Musk's companies making money? Because as far as I can tell, he finances the existing companies by creating a new one (using a very good story).
Supposedly SpaceX is profitable.

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Bankai
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Joined: Fri Jul 25, 2014 5:28 am

Re: Investments Trade Log

Post by Bankai »

Somewhat timely WSP post on why not to short Tesla

https://wallstreetplayboys.com/investin ... -disaster/

ToFI
Posts: 124
Joined: Thu Jun 16, 2011 1:22 am

Re: Investments Trade Log

Post by ToFI »

My portfolio is fully allocated and I am in withdrawal mode so I won't add to existing positions. I am focused on getting a couple new IPOS per year.
Just bought full positions for:
-i3 Verticals, Inc. (IIIV)
-Schrodinger, Inc. (SDGR): This company is in simulation software for bio science, material science, got early funding from Gate and Melinda foundation. I think it'll be good growth stock. Its performance is crazy during the first 2 days of IPO.. It's like Tesla.
-Bill.com


On watchlist, bought a partial position meaning less value than a full position:
Datadog, Inc. (DDOG)
Last edited by ToFI on Sat Feb 08, 2020 6:47 pm, edited 1 time in total.

ToFI
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Re: Investments Trade Log

Post by ToFI »

A lot of people don't get it. If a company has positive gross margin, it can reach profit by not spending too much money for expansion. TSLA's gross profit margin is 20% and just turned a net profit for 2 quarters in a row. Tesla reached a turning point in scale and profitability. It's insane to bet against Tesla at this point. I bought 2 shares just to join the EV revolution and witness history. In 5 to 10 years, Tesla probably reach 1 trillion market cap. it'll become "Apple" in the Car world. Tesla not only make car. It's not a car company in traditional sense. It's a tech company. It has its own AI chip for full autonomous self driving, self driving AI algorithm, massive real world driving mileage(needed for self driving algorithm), energy storage business(growing fast).
Lastly, Elon is a serial entrepreneur. He'll prove many doubter wrongs. He founded Zip, X.COM which become part of Paypal, SpaceX, Neuralink.

Similarly, Virgin Galatic, It's just IPO recently. I bought a small position. It'll likely to become the first successful space tourism company. Richard Branson is a serial entrepreneur. I believe he'll likely to be successful. Initial customers will be rich people like pop stars, business men/women. Later, the price comes down and regular people can afford the ticket.

IlliniDave
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Re: Investments Trade Log

Post by IlliniDave »

I sold another ~4.5% of my US stock funds Friday. Still having trouble staying below 60/40. And starting to think I might be more comfortable with an even more conservative deployment.

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