5 ms·
cool, so using $2B i buy TSLA and using another $2B i buy a planet scale truckload of TSLA $10K calls, and the MMs would buy at least some shares to hedge it -
by trhway 6y ago
cool, so using $2B i buy TSLA and using another $2B i buy a planet scale truckload of TSLA $10K calls, and the MMs would buy at least some shares to hedge it - and even some small percentage of that planet scale truckload number is really a large number of shares thus moving the stock high, which in turn increases the MMs' risks associated with the calls, and forces the MMs to buy even more shares to cover that increased risk which naturally drives the price even higher - positive feedback loop! - and now i dump the TSLA i have. Even without the herd of retail and passives amplifying the effect, it is already a wonderful play... Yep, it is great to be a big guy, ie. to have those $Bs to play at that scale. Though i wonder whether it falls under market manipulation and thus prohibited.
- marketgod 6y agoWith TSLA it may not work so well because TSLA has had a high short interest rate historically. So actually, after the split, if we see more shorts come in to drive TSLA down, we may get another substantial move up, hence I have $1000 targets for December.
- brandmeyer 6y agoSome fraction of the short interest will choose to cut their losses on the way up. Since that is yet another entry on the buy side of the books, that would act to drive prices up even higher, no?
- marketgod 6y agoThe short interest has really gone down for TSLA significantly. It was double what it is now so I don't think short covering should push the market up, I'd presume the people who think Tesla is a fraud are going to get back in now as it is cheaper and maybe even look for a $240 target to add more shorts.