Author Topic: TSLA - Tesla Motors  (Read 438097 times)


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Re: TSLA - Tesla Motors
« Reply #2080 on: Today at 04:27:50 PM »
Puts are fairly expensive $23 for the Dec 21 $300 put. Even if there is no deal, itís not clear to me that those would be winners.

Why so close to the money?

If you believe this is binary ($0 or $420), then OTM puts are the way to go here.  There have been plenty of deals recently too.  I picked up some lottery tickets with a ~1,000:1 payoff. It was the day of the fake bid tweet and they still doubled.

There are really two, three ways to look at these:
1) Buy near dated puts with almost no premium, continue to roll hoping for a blow up
2) Buy long dated ATM or ITM puts to avoid premium
3) Look for mis-pricings within date structures. (This is where I play, just another 'value' type thing).  They do exist.

What fascinates me is the whole short destruction thesis.  Does Musk not realize that most likely 100% of the convertible holders are short the stock as a hedge? Couple that with options makers and there are a lot of shorts who are doing it for structural reasons.

It blows me away that short sellers become a boogie man when companies fail to operate.  Ah yes, short sellers are the cause of manufacturing and delivery disfunction.  Why not get heads down focused on the business and let results take care of themselves?

I firmly believe this is a donut the way Bear Stearns was.  One day they're "fine" and then suddenly they're trading for a buck.


I've been playing around with these. Can you give an example of a 1,000 /1 shot?

A financial can go broke much faster than an industrial. TSLA would need at least 2 quarters to go broke, if they werenít able to raise any money. Likely they would be able to raise some equity or lawn some assets, so it would take longer.

Far out of the money puts are not a speculation on deal breakage, which is what I was looking at, itís a speculation that TSLA goes broke.
To be a realist, one has to believe in miracles.