All things STOCKS

[Thunder Good-Oil]

If the call option buyer anticipates flipping the shares for a gain 3 months out, then the financing advantage would be significant (in relative terms).

Let’s assume that the stock wanting to be purchased is $1,000,000 today. If margin is 0.5% per month then the cost of borrowing is $15,000 for 3 months. If instead $500k is spent on the 2-month option and another $500k is spent when the call is exercised - the the interest is half as much for the first 2 months ($500k x 0.5% x 2 = $5k) plus $1,000,000 for one month ($5,000). So the total cost to borrow is $10k instead of $15k. All assuming that the shares are sold 3 months after buying the 2-month to expiration calls. The math gets even better if the anticipated exit is in 2 months ($5k versus $10k).

 

[VolAllen]

And out….(I did it in two parts but got .84 both times). They ended up hitting 1.50 but whatever….$7,000 gain that I’ll happily take after getting played last week lol.

 

[Thunder Good-Oil]

What's the point of buying a deep ITM option like this?

Another thought, the change in the option price might exactly equal the change in the share price in that scenario. So if it is a very short term trade, then the cost to participate in the ST gain is half as much (assuming that the option strike is about half of the current market price of the shares).

I’ve never really thought about trades with that many digits left of the decimal places. Institutions and other mega equity traders are a different breed.

 

[Go aeiou]

Long term I’m more bothered by the Netherlands confiscating farms. It’s one thing if that’s happening in a communist ruled country or an unstable one like somewhere in Africa. That’s very Chinese-like by a “free” Northern European country. Who thinks surrendering your farm to the government under the guise of saving the environment is a good idea?

Watch out for the globalists’ agenda gaining more traction. Bill Gates is buying up farmland. The Dutch government is taking farms by force. George Soros and Mark Zuckerbucks have bought a lot of governance. BlackRock (I own a chunk of BLK and feel kind of dirty for it) is taking their enormous AUMs and pushing the ESG agenda on where they invest. Keeping an eye on what Elon is up to.

There is no confiscation of farms without payment. The farmers are being paid for their land. Much of the land is being added to existing natural areas or new natural areas are being created.
The same thing happens in the US. We had land taken to widen the road from Oak Ridge to Oliver Springs from 2 to 4 lanes.
In both cases you have people that believe their property is worth more than offered, often believing they are entitled to the value after improvements are made.
We are fortunate to have many natural areas here. Also many people who die and leave their land to a group or govt entity like TN Dept of Environment and Conservation.

 

[Firebirdparts]

What's the point of buying a deep ITM option like this?

Leveraged investing. Real simple. The Deep ITM calls don't have much decaying time value at all, so that's a plus, but you would not receive a dividend, so that's a minus. You might have many questions about how deep and how far out, and you'd be right to have those questions. You can get dumb beta this way and it works as expected. You pay $100 for a $200 stock. When the $200 stock goes up a dollar (half a percent) your option also goes up a dollar (one percent). Same as what thunder said. Very simple math.

A better question, honestly, is what's the point of selling one? I don't know the answer to that one. They pretty much have to be covered or else I'm just missing it.

 

[Firebirdparts]

Well boys, I snagged me one today. In…..

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Good call. I saw the IV was 10% and went the other way. Bought 100 calls. Oh well.

 

[Jax_Vol]

Well boys, I snagged me one today. In…..

View attachment 520997

You were also correct about XOM going down. Oil confuses me for sure.

 

[Thunder Good-Oil]

There is no confiscation of farms without payment. The farmers are being paid for their land. Much of the land is being added to existing natural areas or new natural areas are being created.
The same thing happens in the US. We had land taken to widen the road from Oak Ridge to Oliver Springs from 2 to 4 lanes.
In both cases you have people that believe their property is worth more than offered, often believing they are entitled to the value after improvements are made.
We are fortunate to have many natural areas here. Also many people who die and leave their land to a group or govt entity like TN Dept of Environment and Conservation.

The eminent domain exercised wasn’t to create a park or a road for the greater good. It was to hit a green agenda quota.

 

[mrorange211]

Sure enough. Given enough time....the stock market always goes up.

I believe things have findamentally changed and that is not necessarily true any longer.

 

[Thunder Good-Oil]

Leveraged investing. Real simple. The Deep ITM calls don't have much decaying time value at all, so that's a plus, but you would not receive a dividend, so that's a minus. You might have many questions about how deep and how far out, and you'd be right to have those questions. You can get dumb beta this way and it works as expected. You pay $100 for a $200 stock. When the $200 stock goes up a dollar (half a percent) your option also goes up a dollar (one percent). Same as what thunder said. Very simple math.

A better question, honestly, is what's the point of selling one? I don't know the answer to that one. They pretty much have to be covered or else I'm just missing it.

Maybe they call writer has held shares for 11 months and wants to raise some cash immediately while preserving the ability to take the LT gain instead of selling the shares and being taxed at the ST rate.

 

[Jax_Vol]

I believe things have findamentally changed and that is not necessarily true any longer.

We shall see. This time last year, I was up 60% with the fun money for the CY. So, a bit early for me to plug the plug on the entire operation. We have upcoming gridlock...always a crowd pleaser.

 

[Go aeiou]

I've been getting a bad feeling about Elon Musk for several months. I'm at the point of viewing him a just another shyster, Sold TSLA in 2 accounts in the last couple of weeks. Looks good today. The price might double tomorrow.

 

[VolAllen]

I've been getting a bad feeling about Elon Musk for several months. I'm at the point of viewing him a just another shyster, Sold TSLA in 2 accounts in the last couple of weeks. Looks good today. The price might double tomorrow.

Haha! I actually bought 300 shares of Tsla afterhours today. I like Elon, but to be honest I’m only looking for a small $2-3 bump and I’ll probably bounce.

 

[bignewt]

Seems like once all the major auto makers get EV down he will lose any market advantage he had.

 

[Jax_Vol]

Seems like once all the major auto makers get EV down he will lose any market advantage he had.

Very difficult to get EV down. But, it can be accomplished. Unsure who will be the winners, but there will be some.

 

[VolAllen]

Very difficult to get EV down. But, it can be accomplished. Unsure who will be the winners, but there will be some.

I have this suspicion it’s going to be like plastic bags. When I was a little kid I remember getting paper bags at the store and milk cartons and all that. Then in the 90’s (I was still a kid) I remember the “plastic makes it possible” campaigns and everyone switched. Now I’m seeing a push to switch back to paper again because of plastic pollution.

EV’s sound like a good idea, but I’m curious to see what the consequences are in 20-30 years.

 

[Jax_Vol]

I have this suspicion it’s going to be like plastic bags. When I was a little kid I remember getting paper bags at the store and milk cartons and all that. Then in the 90’s (I was still a kid) I remember the “plastic makes it possible” campaigns and everyone switched. Now I’m seeing a push to switch back to paper again because of plastic pollution.

EV’s sound like a good idea, but I’m curious to see what the consequences are in 20-30 years.

Yeah, that first 100,000 miles is fun. Then they have to replace the batteries, which somehow cost 50% 0f the value of the car. And, limited options for recycling the old. EV's for rich people as a status symbol (Telsa) are kinda the modern Cadillac. But, for average Joe, I think they are plastic bags. Might be able to justify them as school buses or such.

That cheap little China brand would have the best shot, however don't think that will do well on the safety tests.

There is probably an answer out there. Another Bezos money drain Rivivan with electric trucks might have something. Assuming that 95% of guys driving pickup trucks aren't using them to pull anything.

 

[mr.checkerboards]

I have this suspicion it’s going to be like plastic bags. When I was a little kid I remember getting paper bags at the store and milk cartons and all that. Then in the 90’s (I was still a kid) I remember the “plastic makes it possible” campaigns and everyone switched. Now I’m seeing a push to switch back to paper again because of plastic pollution.

EV’s sound like a good idea, but I’m curious to see what the consequences are in 20-30 years.

Yeah, that first 100,000 miles is fun. Then they have to replace the batteries, which somehow cost 50% 0f the value of the car. And, limited options for recycling the old. EV's for rich people as a status symbol (Telsa) are kinda the modern Cadillac. But, for average Joe, I think they are plastic bags. Might be able to justify them as school buses or such.

That cheap little China brand would have the best shot, however don't think that will do well on the safety tests.

There is probably an answer out there. Another Bezos money drain Rivivan with electric trucks might have something. Assuming that 95% of guys driving pickup trucks aren't using them to pull anything.

Don't forget the fact that we don't even have a power grid strong enough to power every city in the US (rolling blackouts anyone), but yet we are going to add a lot of stress to it by people needing to charge EV. It's just a recipe for disaster.

 

[Thunder Good-Oil]

Seems like once all the major auto makers get EV down he will lose any market advantage he had.

Or he will partner with one or more of them and sell them batteries and energy management software.

 

[VolAllen]

Or he will partner with one or more of them and sell them batteries and energy management software.

Bingo. He needs to make Tesla the next Bosch and be a parts manufacturer. That’s where the money is.

 

[Thunder Good-Oil]

Bingo. He needs to make Tesla the next Bosch and be a parts manufacturer. That’s where the money is.

I could see Tesla evolving into more like a seller of IP. Currently they manufacture batteries and hold patents, but they could deviate from being a manufacturer. If he wasn’t already building the enormous factories to make the batteries he should farm the assembly out and just collect royalties. He could always sell the plants down the road though while retaining the IP.

The other car companies are mainly stylists, marketers, franchisers, and assemblers. Design, promotion, and logistics. Most of the actual manufacturing is done by their vendors.

Tesla has also created enormous value as a brand. In the future it could evolve into Cadillac powered by Tesla and Lexus powered by Tesla and so on. Then there’s a Tesla power management system hanging on the garage wall or outside next to the home’s heat pump. Tesla Solar on the roof. Tesla Generators adjacent to the electric meter.

Bottom line is that I think that there is a flaw if Tesla is simply compared directly with the vehicle assembly companies like GM and Ford and the others. Tesla is a power company. They might be more involved in micro-power distribution concepts rather than vehicle production and sales in the long view.

 

[Thunder Good-Oil]

I might be talking myself into buying some TSLA shares for a long term hold.

 

[Go aeiou]

The eminent domain exercised wasn’t to create a park or a road for the greater good. It was to hit a green agenda quota.

When you consider the Netherlands' pollution problems they are related to agriculture. They have manure and urine eveywhere. It's in all the drainage, streams, rivers and the ocean. When you are a country that is 1/3 at or below sea level it is difficult to get rid of it.
So the Netherlands does not meet EU standards. They take it(Green Agenda Laws) serious there. They try to meet standards by buying the worst offending areas, eminent domain.
Many have suggested that the rules be changed for the Netherlands since they are in such a unique situation.
FWIW, The Netherlands is a beautiful country, and Amsterdam is a great city to visit.
Like Venice the city is supported by poles, but is still sinking, and it has more canals than Venice. It has more bicycles than people. I find that downright dangerous.
The Van Gogh museum is my favorite art museum, great food. Tallest people in the world I believe.
I'd put it together with London, Paris and Rome as best cities to visit in Europe.

 

[Thunder Good-Oil]

I guess the globalists have seizing Florida, Louisiana, Lower Alabama and the Texas gulf coast not far down their checklist. Because they ain’t up on a hill.

Net food exporters and net fossil fuel producers can’t be tolerated. Shut them down. Call it saving the planet. Ignore the biggest polluters in east Asia. Control the peasantry. Freedom sucks after all.

Bill Gates’ runabout motorboat BTW. For s***s and giggles. V V V

 

[VolAllen]

Sold those Tsla shares at like 5am with one eye open +$300. Glad I did!

Then bought Spy, then shorted Spy for +$700 to start the day. Loaded 250 shares of Costco looking for a little pre ER run. Again, I’m out if it bounces a couple of bucks.