I couldn't resist rolling the dice

2 jul 2020

I rolled the dice on a far out-of-the-money July 31 Tesla put this afternoon after Elon Musk tweeted at the SEC to suck his cock. If I'm wrong, it's no big deal to lose $60. If I'm right, maybe I'll make a quick c-note when news of an accounting fraud investigation breaks.

Possibly relevant:

valuewalk.com/2020/04/tesla-warranty-fraud-shortseller/

twitter.com/sftechworker/status/1278462814739300352

Tesla is also under investigation by the NHTSA for allegedly covering up an issue with their battery cooling system that they knew could set the car on fire. My put might pay off if that investigation were to turn something up, too. On top of all that, Tesla shot up over the last few days on hype around its delivery numbers. So we may be in the "sell the news" part of the stock's cycle as we head into next week. I promised myself I would never short this stock, but what can I say? I'm an inveterate gambler, apparently. XD

7 jul 2020

Nota

Actually managed to sell my put for a little more than I paid for it this morning, despite Tesla's big 13% move up yesterday. That's the nice thing about far out of the money puts, is the volume is low enough that sometimes you can take advantage of temporary price distortions. I got lucky! :)

7 jul 2020

Nota

Had I held my put till the end of the day, I could have sold it for even more. Interest in these out-of-the-money puts seems to be increasing, despite the bullish price action.

Tesla has earnings coming up on July 22, and Elon Musk has been signaling that Tesla may break even for the quarter. With current Wall Street consensus at -$0.67, Tesla is likely to beat estimates unless analysts adjust them in coming weeks in light of Elon's signals.