Yup. The market can stay irrational longer than you can stay solvent.
I feel like if you work under the theory that you have no idea when the TSLA crash will happen, but when it does it will be swift and gigantic, you could just keep buying way out of the money puts until it happens.
Just got some nudes via Snap
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I insta liked thinking that was from the Machinist, but then I thought maybe it’s that boxing trainer movie he did?
hahahaha yeah it’s from The Fighter, great movie. Didn’t even think of The Machinist, but that would have been good too.
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Well in the last one he’s definitely not shorting shortcake
Burry on Twitter is like, um, he’s one of them.
Did you pay anything for them or click on any ads?
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Ok guys I’m buying $10k of TSLA on Monday. Gonna put an end to this thing.
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Point taken
Going by your 2020, TSLA going to $2k
I had freaking TSLA about this time last year - sold it because it was too ridiculous.
We still have some shares because my wife wouldn’t let me sell them. I have unloaded about 40% of our position between $425-$810 and will sell 10% more around $1000 but it was her idea to buy it so I can’t sell it all. My marriage would be better off holding those shares and buying puts than selling.
It has done so well it is more than 50% of our non retirement portfolio even though I am offloading it gradually.
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Been trying to short through TD Ameritrade. But they’re being acquired by Schwab, so maybe that’s going to open the door to me losing lots of money!
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It’s enormously expensive. Let’s say that I expected TSLA to drop from 880 to 600 in the next year - that’s a pretty big drop! How do I take advantage of it? I could buy a put with a strike price of 700, but that would cost me $154, so I don’t make a profit unless TSLA falls below $546. And buying puts at lower strike prices makes that problem even worse - a $600 strike put costs $106, so no profit unless TSLA falls below $494.
In general, deep-in-the-money calls and strikes behave pretty similarly to the underlying stock (for deep-in-the-money calls) and shorting the underlying stock (for deep-in-the-money puts). So if I wanted to replicate a short position, I’d be looking at puts with around a $1,500 strike (that seems to be the highest with any open interest). That’s priced around $750 right now. So the best possible negative bet I can make that comes closest to shorting the stock doesn’t pay off unless TSLA drops from 880 to 750 in the next year.
Suppose I’m right and TSLA does drop from 880 to 600. That put earns 150/750 for a 20% return. Which is maybe a good bet. Actually, I might be talking myself into doing this.
I thought another advantage of puts over shorting is avoiding the possibility of getting caught flat-footed if the stock price begins to soar?