Note to Sig: Not every piece of twitter is interesting or accurate, even if it is Tesla bullish. Some twitterers are bullish but bullshitting. "Value Analyst" is anything but, and is a great example of the BS type. It's better to stick to actual Tesla news than to the ramblings of the cheerleaders. Just my humble opinion.
Big day tomorrow (Friday)? A 3.6 million dollar bet (stock call) has been placed that $TSLA closes over 1500 tomorrow.
No big news I am aware of; Musk reiterated at the China AI conference that Tesla FSD will be available Real Soon Now. And Giga Berlin construction is proceeding even faster than Giga Shanghai did….
Could it be that institutional managers are simply starting to “get it” — to understand where Tesla, and TSLA, is going? And that S&P 500 inclusion is essentially inevitable at this point (if not after Q2, then certainly after Q3).
“I estimate the amount of $$$ that will have to buy $TSLA once added to the S&P 500 or will try to front-run the inclusion in the next few weeks at ~$100B; still, this is not why the stock price is surging.”
“Index funds can’t front-run purchases, can they?”
“No, but active managers can and will.”
CentralScrutinizer (@Central27178711) 7/9/20, 4:58 PM
on another note.. 18,000 July 1500 Calls that expire TOMORROW traded today..closed at $2 bucks with 24 hours on the clock.. 3.6 million dollar bet the stock closes over 1500 tomorrow $TSLA
https://twitter.com/central27178711/status/1281332029632720896
< If the stock tomorrow closes at $1504 this guy makes $3.6M.
If it closes at $1514 he makes $21.6M.
If it closes at $1600 he makes $176.4M.
If it closes below $1502 he loses $3.6M though...
afaik
Volume (amount traded - 18000) is NOT open interest (amount outstanding - 6000).
So "the guy" does not exist, in any case it's not "a guy" it's the whole market.
Besides, options are often a part of portfolio, hedged against other options or the stock itself.
Volume of C1400 was 29000 (open interest 6000). Volume of C1450 was 12500 (open interest 2300).
Chances of TSLA closing above $1500 tomorrow are slim to non-existent.
One could buy C1450 for $5.70, and sell C1500 for $2.1, a cheap trade with much better payout profile than straight C1500.
One could buy C1400 for $16.70 and sell C 1450 for $5.70, maybe this is even better.
https://finance.yahoo.com/quote/TSLA/options?p=TSLAIt could very well be that the C1500 volume was due to holders of the options taking their losses, realizing it's expiring worthless so cashing out at $2.
Or holders of the stock that use a "write covered call" strategy, making money off call premiums while keeping the stock and hoping for a slow but steady rise, deciding to close the position for cheap and open a new one for next month.
Or traders needing the small option for margin while selling bigger options they think will expire worthless as well.
As for the addition to the S&P 500, I estimate that hedge funds and active managers have been front-running this for a while already. This story is getting old, and the crowded trade is often the losing trade, as evidenced by the shorts killing themselves over the past year. The longs don't always have it right either, that's just how the game works.