Intro to options

[Peds]

not a tesla thread....move there.

[Tim]

The battery pack costs are about 50% of current cost with in house battery lines that come online in next 12-18 months and capex per unit is 79% reduced from 4170 cells. The large casting machines reduce complexity and capex per unit. Not shipping all vehicles round the world is huge reduction in cost of goods sold. They sell $10K software packages to 30% of all deliveries for which historically has only had small percentage go to bottom line. As FSD reaches wide release they will recognize all of the deferred revenue and take rate on software upgrades will reach larger proportion of users. They also are releasing a monthly subscription service of fsd that will be 90% plus margin recurring revenue. They have been cash flow positive almost $3B from operations in trailing 4 quarters. I don’t know how to get through your thick head that Tesla is the best business you will ever see in your lifetime.

AGAIN! TESLA has become a cult. I pm’d Nysoz at the very beginning. The WCI article about shutting WCI FB down. Options education and strategies are great. Try using alternate examples. No no no. What the heck are you selling?

“ I don’t know how to get through your thick head that Tesla is the best business you will ever see in your lifetime.”
This has nothing to do with investing. Is Tesla a brand, a product, a division or a way of life? It’s addictive.

[Tim]

Run the numbers quarter by quarter. Just curious how profitable that have been and how profitable they will be. You say they are profitable. I don't know.

Just a hint, cost efficiencies are greatly diminishing returns. That is why mature companies squeeze to achieve pennies in cost reductions and productivity improvements.
They can work really hard and save $5 bucks. That is manufacturing. They reported losses, including the losses, not anyone else. I don't think they choose Austin for the weather, they chose it because it costs less to produce a car. Pretty simple.

[Tim]

Mainly commenting on the ignorance to the current state of Tesla. You can say the stock price is overvalued or that it assumes a lot of future growth but saying that they are not profitable is simply not true and will continue to not be true forever.

As I have said the only reason to not buy Tesla now is because one does not understand Tesla. They have reached scale on several of the largest addressable markets in the world with very weak competition that will not be able to match their scale in a foreseeable future. At a minimum they will be valued at $8T in 2030. If one perseverates on P/E they will miss it. Fine by me...

Not to dispute, but I am sure you have heard of "adjusted" and "proforma" earnings. A well known and acceptable technique of management telling their story for "continuing operations". The bad news is addressed as not having an impact. Tons of disclosure in the 10k footnotes, sometimes restatements and proforma statements.
The idea is a clear picture of the profitability when non-reoccurring items impact profitability.
I did see one analyst that brought up the massive government credits. Did a restatement and concluded that Tesla has not been able to master the art of selling cars at a profit without the credits. Of course proforma statements pulling out all the government credits would tell a different story. They are expiring, not continuing. Makes it tough to determine just how profitable they are at building cars. Not saying it is misleading, simply saying pull the credits out and see how their profitability is. Or loss as the analyst claimed. Just another story in the tale of Tesla. No idea if they will be profitable or whether government subsidies will increase or decrease. It would be nice to have Tesla provide a proforma without credits. They know the numbers, a lot of smoke intentionally.

[fatlittlepig]

also if you’re trading spreads on Robin Hood a few things to know.

as the greeks change/theta decays sometimes can make it look like you’re losing even though the trade is moving in your direction.

Robin Hood closes some trades automatically I think 3-4 pm est day of expiration or something. Some horror stories come from that. So you may want to close profitable positions before that, before it does something dumb for you

I'm not planning on holding any of the spreads until expiration

[Nysoz]

Check this website out my feathered friend. Really cool to model call debit spreads:

https://www.optionsprofitcalculator.com/

also if you’re trading spreads on Robin Hood a few things to know.

as the greeks change/theta decays sometimes can make it look like you’re losing even though the trade is moving in your direction.

Robin Hood closes some trades automatically I think 3-4 pm est day of expiration or something. Some horror stories come from that. So you may want to close profitable positions before that, before it does something dumb for you

[Panscan]

Well if I'm being honest. I've never really understood options and just assumed id lose my shirt until I read this thread. I literally had no idea what a debt spread was until you brought it up in your post. Here is a timeline of my experience.

1-8-21 Read this thread and learned the practicality of options and finally had enough confidence to try trading options.
1-11-21 Activated my account for options so I could sell covered calls on stocks I own and make money like Nysoz
1-13-21 Bought and Sold a few REIT options, made $140 on a $560 trade. Felt pretty invincible.
1-19-21 Bragged about my wins to a friend(who is finance guru) and he sent me over to wall street bets and told me to buy GME.
1-20-21 Took half of my emergency fund and bought GME calls.
1-22-21 Got on WCI to brag about my winnings.

1-29-21 I'll either be worth twice as much as I was at the beginning of the year or I'll have lost half my emergency fund and my wife will kill me.

I think you’d fit in great over there haha

[fatlittlepig]

Check this website out my feathered friend. Really cool to model call debit spreads:

https://www.optionsprofitcalculator.com/

[Jack_Sparrow]

What other option plays are you looking at, I’m looking for some good candidates for call debit spreads. I’m thinking amzn if it goes lower.

Well if I'm being honest. I've never really understood options and just assumed id lose my shirt until I read this thread. I literally had no idea what a debt spread was until you brought it up in your post. Here is a timeline of my experience.

1-8-21 Read this thread and learned the practicality of options and finally had enough confidence to try trading options.
1-11-21 Activated my account for options so I could sell covered calls on stocks I own and make money like Nysoz
1-13-21 Bought and Sold a few REIT options, made $140 on a $560 trade. Felt pretty invincible.
1-19-21 Bragged about my wins to a friend(who is finance guru) and he sent me over to wall street bets and told me to buy GME.
1-20-21 Took half of my emergency fund and bought GME calls.
1-22-21 Got on WCI to brag about my winnings.

1-29-21 I'll either be worth twice as much as I was at the beginning of the year or I'll have lost half my emergency fund and my wife will kill me.

[fatlittlepig]

Excellent, Its a good start. But the short squeeze is going to happen next Friday so you sold too early. I'm going to sell half when the shares hit $100 and then see how close it gets to $200.

What other option plays are you looking at, I’m looking for some good candidates for call debit spreads. I’m thinking amzn if it goes lower.

[fatlittlepig]

buying 2/12 50c on GME.

Im happy 4 u.

[fatlittlepig]

here's my second trade for the day:
if these two trades go belly up, that may be a good thing as i'll retire my amateur options trading at that point.

Underlying stock symbol

Symbol: Get price ?
Current price:$ Long Call

Buy or write: Buy Write
Option:5^th Feb $750.00 Call Select option
Price per option:$
Contracts:# x 100 ?
Total cost:$
Short Call

Buy or write: Buy Write
Option:5^th Feb $800.00 Call Select option
Price per option:$
Contracts:# x 100 ?
Total cost:$
Spread

Spread price:$-34.95 (net debit)?
Graph range:$ - $?
Add calculation in new tab

Estimated returns

TSLA at $847.87 on 22nd Jan 2021


Entry cost: $3495 (net debit) see details

Maximum risk: $3495 at a price of $750 at expiry

Maximum return: $1505 at a price of $800 at expiry

Breakevens at expiry: $784.96

[Nysoz]

You can also look up credit spreads. Where max profit is the premium and max loss is the delta-premium. All different but kinda similar at the same time

I do like discussing TSLA the company but refraining as I’m trying to keep this thread for the discussion of options and using TSLA as an example. There’s a different thread for discussion about TSLA the investment/company.

[fatlittlepig]

Here's my latest trade:

Underlying stock symbol

Symbol: Get price ?
Current price:$ Long Call

Buy or write: Buy Write
Option:5^th Feb $130.00 Call Select option
Price per option:$
Contracts:# x 100 ?
Total cost:$
Manual entry optionsShort Call

Buy or write: Buy Write
Option:5^th Feb $136.00 Call Select option
Price per option:$
Contracts:# x 100 ?
Total cost:$
Manual entry optionsSpread

Spread price:$-64 (net debit)?
Graph range:$ - $?
Add calculation in new tab

More output optionsEstimated returns

AAPL at $135.91 on 22nd Jan 2021


Entry cost: $6400 (net debit) see details

Maximum risk: $6400 at a price of $130 at expiry

Maximum return: $5600 at a price of $136 at expiry

Breakevens at expiry: $133.20

[Nysoz]

Yep you can slide the strikes/deltas around to see what fits your risk/reward trade.

just when dealing with itm options, depending on how far itm, the bid/ask may not get these theoretical numbers or might not get filled. So everything may get shifted by a bit.