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  • Originally posted by Tim View Post

    Day traders are not the objective of a CFO. The volumes are usually insignificant. What a company wants is the big dogs taking investment positions in block trades, that moves the market price and stabilizes the value of the company. A split does bring the capital commitment down to the common person. Day trading is the enemy of a company’s ownership.
    I think Tesla makes up a massive proportion of all options activity (more than 25% I think, maybe a lot more). So if the price goes down, options are cheaper, which make it more likely for everyone (institutions but also day traders) to speculate even more.

    Aren't block trades usually done over the counter or via dark pools? ie they don't affect the market price as much? Not sure about that.

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    • Originally posted by xraygoggles View Post

      I think Tesla makes up a massive proportion of all options activity (more than 25% I think, maybe a lot more). So if the price goes down, options are cheaper, which make it more likely for everyone (institutions but also day traders) to speculate even more.

      Aren't block trades usually done over the counter or via dark pools? ie they don't affect the market price as much? Not sure about that.
      I know FIDO has a special desk for 10k shares or more. Available to retail as well.

      From a company perspective, options are of zero value, actually detrimental. You go on a roadshow and incur a ton of expense to raise capital, equity.
      Debt is better, but might have too much risk, expensive.
      The only time a company uses options is if they need shares for stock options. Yeah, a little insider info there, but they plan to exercise it for commitments.

      Dark pools eventually impact price, just not the execution price desired. Blocks are not that uncommon. WSJ used to publish the volumes.
      https://www.wsj.com/amp/articles/reg...ms-11644875448
      The problem is front running. Not the trade.
      The level 2 order book shows if it needs to be split. The sell side is the problem. You can get screwed, Who would have thought of that?

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      • Tesla loves options bc they are the only reason the price is anywhere near where it is. It’s been gamma squeeze after gamma squeeze. As X-ray said the options are a large portion of the total options volume for the ENTIRE market. There is vast speculation in Tesla which has fueled its rise. This effect is dramatically greater than the actual thoughts on valuation/future of the company and will spontaneously combust in the same manner

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        • Tesla options are a massive part of the market, and with retail being huge buyers, which can drive dealers to hedge by buying of the stock. Decreased stock price, increased option activity, increased likelihood of gamma squeezage. This is the market now. No shock amzn decided to split finally also, it works now that we understand it as a game.

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          • Originally posted by Zaphod View Post
            Tesla options are a massive part of the market, and with retail being huge buyers, which can drive dealers to hedge by buying of the stock. Decreased stock price, increased option activity, increased likelihood of gamma squeezage. This is the market now. No shock amzn decided to split finally also, it works now that we understand it as a game.
            But the company only benefits by issuing new shares. Even employee stock options go underwater. I found it interesting with Elon commenting about potentially 10% company layoffs.
            "Tesla is looking to lay off 10% of its workforce and pause hiring, Reuters reported Friday. CEO Elon Musk said in an email to executives that he had a “super bad feeling about the economy,” Reuters reported. Along with plans for layoffs, Musk said the company will pause hiring worldwide."

            The problem is the unvested golden handcuffs get released and product roadmaps and new construction get slashed. What was an optimistic opportunity gets trashed. In other words the top 10% and bottom 10% are no longer dedicated employees. Not a pretty picture.

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