NKLA

[BlackBellamy]

When Coleco came out with Colecovision in mid 1982 I knew the hype was real because everyone was starving to upgrade their shitty Atari 2600's so I checked the Coleco stock and it trading at like $8.

I went to my father and said father father you have buy Coleco because it's going to be a fucking rocket. And my father said son you are only 15 years old why don't you leave adult things to adults. So I told him here, here is $350 it's all I have buy Coleco for me and he was like nah it's ok. So I said I'm 15 but I have hair on my balls do you want to see? Can you please buy me 40 shares? So he bought me my 40.

11 months later we sold that shit for $65 per.

I bought a Honda CR480, a BB rifle, and an IBM Personal Computer with a CGA display. I spent the summer of 1983 playing M.U.L.E. and Ultima III and recklessly and illegally tearing through the local woods with a rifle on my back.

[Patriam1066]

Originally Posted by zodium [You must be logged in to view images. Log in or Register.]

this is the correct position, you already know as much about options as you need to.

Yeah I’ll never understand options

Nikola is a bad name, and it’s basically copyright infringement on the name “Tesla.” All around poor taste

[zodium]

Originally Posted by Patriam1066 [You must be logged in to view images. Log in or Register.]

Yeah I’ll never understand options

Nikola is a bad name, and it’s basically copyright infringement on the name “Tesla.” All around poor taste

as Gwaihir sort of gets at, viewed as independent bets, options are pretty much random noise. options make more sense when you view them as balancing tools, or side bets, that you use in conjunction with main bets. it's easiest to understand why they're random noise if you break down and interpret your bets. (obviously always crunch the numbers. the numbers are how we operationalize belief, but never forget the numbers are only as good as the information they represent.)

what am I betting on? what specific information supports my bet? can I know that? when I buy a value stock, I'm betting primarily on the future performance of executives, over time. when I buy a speculative stock with an eye to sell later, I'm betting on the future behavior of other traders, over time. "executives will pay more dividends/other traders will pay more, starting now." these are bets based on past and present information that's likely to be predictive over time, and hence profitable given disciplined investing. (anyone who incorrectly invokes "past behavior does not predict future performance" at this juncture will be summarily executed.)

if I bought options as a standalone bet, I'd be making a specific bet about one moment in time, in the future, while doing it in a manner which conflates information about company and market behavior. "this will be worth more or less than X, on this future date." what specific information supports my belief that Stock A going to be worth more or less than X dollars on exactly this date? do I have specific information the executives, or the market, will do something the days before? or even that they might? almost invariably, no. I have no information, nor could I. that makes no sense. this is a bet for rubes.

an option is a hedge, and a hedge supports a main bet. "I'll bet the market that NKLA will behave in this way over the next so-and-so-long, but just in case, since I'm not omniscient, I'll make a side bet with part of the market that it behaves this, this or this other way, to obtain a better overall profile." a good hedge is still informed by the same information as the main bet. it just expresses it differently. it's a bit like the difference between a point estimate and a confidence/credible interval, the interval goes around the point estimate. it doesn't make sense independently. options are like that too.

[Gwaihir]

Originally Posted by zodium [You must be logged in to view images. Log in or Register.]

as Gwaihir sort of gets at, viewed as independent bets, options are pretty much random noise. options make more sense when you view them as balancing tools, or side bets, that you use in conjunction with main bets. it's easiest to understand why they're random noise if you break down and interpret your bets. (obviously always crunch the numbers. the numbers are how we operationalize belief, but never forget the numbers are only as good as the information they represent.)

what am I betting on? what specific information supports my bet? can I know that? when I buy a value stock, I'm betting primarily on the future performance of executives, over time. when I buy a speculative stock with an eye to sell later, I'm betting on the future behavior of other traders, over time. "executives will pay more dividends/other traders will pay more, starting now." these are bets based on past and present information that's likely to be predictive over time, and hence profitable given disciplined investing. (anyone who incorrectly invokes "past behavior does not predict future performance" at this juncture will be summarily executed.)

if I bought options as a standalone bet, I'd be making a specific bet about one moment in time, in the future, while doing it in a manner which conflates information about company and market behavior. "this will be worth more or less than X, on this future date." what specific information supports my belief that Stock A going to be worth more or less than X dollars on exactly this date? do I have specific information the executives, or the market, will do something the days before? or even that they might? almost invariably, no. I have no information, nor could I. that makes no sense. this is a bet for rubes.

an option is a hedge, and a hedge supports a main bet. "I'll bet the market that NKLA will behave in this way over the next so-and-so-long, but just in case, since I'm not omniscient, I'll make a side bet with part of the market that it behaves this, this or this other way, to obtain a better overall profile." a good hedge is still informed by the same information as the main bet. it just expresses it differently. it's a bit like the difference between a point estimate and a confidence/credible interval, the interval goes around the point estimate. it doesn't make sense independently. options are like that too.

Correct, for "buying" options. The "advantage" in trading an option always goes to the seller of the option, since "time remaining until contract expiration" always carries a value that isn't commenstruate with the existing price schema.

This is why i suggest selling a below-market put, in addition to buying 100 shares and selling an above-market call that indicates your respectable "exit-point.

Investing in anything, without clearly setting criteria in which youd be willing to walk away happily is a fool's errand. How do you ever realize profits, if you have no exit point?

Anyhow, by hedging in this manner, only a major price pullback can thwart profitability, whereas minor pullbacks, flat pricing, and upward surges all net profitable, albeit you're limiting your exponential profit potential. Plus if its a dividend paying stock, youll still get any dividends dispersed on the 100 shares of underlying stock during the tenure of awaiting expiration on the entirety of the hedge. Furthermore, in the event of a major price 0ullback, the losses are mitigated in comparison to an unhedged buy with lambo expectations of mooning where you still won't sell, because now youre shooting for the moon's moon.

M-O-O-N, that spells greed.

BTW, DFEN is currently a far more lucrative etf for a buy+ put/call hedge, with a 43.5% max gain and profitability coverage on a 35% pullback for a 7-month haul with Boeing, Raytheon, Northropp Gruman et al not having recovered from the march pullback, and the threat of war with China looming on the horizon. We're far less likely to see the US Gov refuse a handout to the defense industry in the event of fiscal insolvency than you are a Tesla knockoff when institutional money is already backing its pet EV manufacturer Tesla. NIO is highly risky too, for that matter.

The natural logarithm (1.435)/7.5months indicates the underlying etf would need to outpace an exponential gain rate of %4.82/month to return more than 8$ put strike, and 16$ call strike set to april on an etf trading circa 11.50/share now. So, you're looking at a total investment of $1950 for an initial entry, with a max return of 2798 as it approaches and exceeds 16$/share in april 2021

[Gwaihir]

You should also note, TSLA is being valued differently than you would expect from a vehicle manufacturer even in the realm of electric vehicles.

TSLA, foremost, is in AI development, with their cars merely representing 1 practical example of the potential for the technology on the whole.

Correct me if I'm wrong, but is nikola making autonomous ai software, or just making electric vehicles?

[Mario 7]

Strong Buy ( Get in now ) Going to 1k + within a year or two

PS Sold my tesla yesterday for 26k profit

PSS Gwaihir has no money at all in real life and knows nothing

[Gwaihir]

Invested $5250 in selling 3x January 2021 17.50 puts today at 3.82/share in premiums.

Total return on 4 month investment 1146$

21.83% with a 50% downturn required to begin eroding.

Good luck with ur moon bet though.

[Patriam1066]

Originally Posted by Mario 7 [You must be logged in to view images. Log in or Register.]

Strong Buy ( Get in now ) Going to 1k + within a year or two

PS Sold my tesla yesterday for 26k profit

PSS Gwaihir has no money at all in real life and knows nothing

Haha I sold my Tesla earlier for 52k profit

[Patriam1066]

Originally Posted by Gwaihir [You must be logged in to view images. Log in or Register.]

Invested $5250 in selling 3x January 2021 17.50 puts today at 3.82/share in premiums.

Total return on 4 month investment 1146$

21.83% with a 50% downturn required to begin eroding.

Good luck with ur moon bet though.

I don’t understand this at all. It’s Greek to me

[Gwaihir]

Originally Posted by Patriam1066 [You must be logged in to view images. Log in or Register.]

I don’t understand this at all. It’s Greek to me

It means in return for guaranteeing i will pay 17.50/share for 300 shares in January, 3 people each paid me 382$ per 100 share contract.

The people who bought the contracts either
A) think the price is going to drop below (17.50 - 3.82 =) 13.86, in which event, on expiration day, at market close, plans to buy 100 shares from the market at the going rate (say for example 12.00) and then force me to pay them 17.50 for it (netting themselves 100 x 5.50 in net profit minus the 382 they paid up front, so 166$)

Or

B) someone is using my obligation to buy 100 shares at 17.50 to hedge against further losses below 17.50, since they own shares and are worried about a major price drop such as one which would occur in insolvency leading to bankruptcy.

Or

C) bought the contract as part of an options spread, such as a put-credit spread, or an iron condor spread etc.