Kirk's Market Thoughts Message Board

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Non-Tech : Kirk's Market Thoughts

COHR 188.98

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Dec 29 3:59 PM EST

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To: Kirk © who wrote (6997)	4/18/2019 12:38:11 PM
From: robert b furman	Read Replies (1) of 26881

On a stock so volatile as TSLA I was not looking out to 2021 - with EV's that's a new car generation away possibly. g/ng I was looking at January 17th, 2020's. Since the 3 year high is 389.61 and the 3 year low is 178.19 the midpoint is 283.90. If Tesla got a pop up the the midpoint of the BB 307.70,and the premium was the same as where it was in the money now a put would have a premium of where it is now at @275 (2 bucks in the money 47.50 to 47.80) Say sell it at 47.65. Just one contract would bring 47.65 x 100 = $4765 dollars. Ten contracts would be $47,650. If tesla stayed below 305 ish to310ish it would give you 47,650 cash in your account. screencast.com Right now Tesla has very low MO (the blue line on the volume box). Macd is flat lining on the lowest line. Not a time to be shorting. A good time to short would be when: Stochastics (both top out on the top line) and begin to show some oversold divergences The BB midaverage line is surpassed by just a bit If that coincided with the BB midpoint showing some resistance, I'm thinking to pull the trigger on a put and add (sell a few more) if it starts to go down. If a guy had cajones and did 10 contracts the number of days to expiration (now) is 247 So $47650 / 247 = $173.90 a day in decay if the price stayed below 310ish. That's a bit simplified in that time decay accelerates at a much faster rate when 30-90 days before expiration. The point I'm trying to make is a $45.00 premium for a put that is at the money is so huge! The 275 put is bid / ask is 47.20 / 47.50 With price at 274 - 1 dollar in the money. Now premium always is maxed as price goes down. Tesla's price has been going down of late 47.35 divided by 274 days till expiration is still a lot of premium for time to decay. I think it is much more efficient to sell a put vs pay big money to short the stock. I'd like to sell a put after a weak bounce up in price vs when it appears to be in a bottoming stage. Big chunks of MONEYT CAN BE MADE BY SELLING AT THE MONEY PUTS IN A STOCK THAT HAS BOUNCED ANEMICALLY WHILE TRENDING SIDEWAYS IN A LONGER TERM DECLINE SUCH AS TSLA IS IN NOW. LRCX had a similar event at 170ish in July. It bounced and it was a good short at 196 (when it went marginally above the BB mid average at july month end. I think a longer term time period is safer with Tsla, as their S and X models are showing age fade. They have not been refreshed and their competitors will be introducing exciting new styling new models. Over the course of 9 months I think that will become more evident. New models will have a tax credit rebate as Tesla has outsold their credit. Luxury car buyers don't care about the price - they love to brag at what they paid for it - they seek status of owning the new and exciting, not the value and the deal of yesterday's hit car. Both of those events will catch up with Tesla. Tesla has debt repayments to make, not refresh expenditures to make. I think that by January 17 2020 a lot of the bloom will be off of Tesla. That's easy to say and I'm tempted to sell a put and average down, if I get some equity to average my "Buy to close" limit price. Ten will be way more than I'll venture. Just thinking out loud at this point. What do you think? Bob

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