4 ms·

This kind of uninformed negativity is why I'm loaded up on GM calls. GM btw, has no debt (at least in the way you are thinking).

totalZero 6y ago
If there is a cash takeout, the IV will go down. If there is a share component to a hypothetical acquisition, the IV will potentially increase. However, I'm not sure how likely that is. Just be aware that your Vega p&l could be negative, so extremely long dated calls with a lot of Vega may need a big gap between a cash takeout price and spot in order to be profitable.
- rlonn 6y ago
  This reads like finance buzz bingo
  - totalZero 6y ago
    I'm just saying that long-dated calls can lose money in a cash acquisition.
- friedman23 6y ago
  I'm already up 200% on my $150k bet. The IV was basically nothing a month ago.
pmorici 6y ago
Yeah I’m sure Tesla is just chomping at the bit to take on a debt portfolio backed by ICE vehicle loans and leases. The assets underlying all that debt are going to have a drastic revaluation as electric takes over. I would bet on a GM bankruptcy within 5 years. GM is blackberry it’s 2008.
pokerhobo 6y ago
GM has about $100B in debt https://www.benzinga.com/news/20/09/17407586/a-look-into-general-motorss-debt#/:~:text=General%20Motors's%20Debt%20According%20to%20the%20General%20Motors’s,company%20has%20a%20net%20debt%20of%20$98.94%20billion https://www.benzinga.com/news/20/09/17407586/a-look-into-gen.... Help me understand how I’m misinterpreting this.
- pmorici 6y ago
  He probably means that a lot of that debt is related to loans and leasing.
- nickik 6y ago
  People make the argument that this is not a bad thing because these loans are backed. In my opinion this is crazy. With EV at an inflection point, the value of used ICE cars will totally collapse and newly produced ICE cars will lose massive amounts of value as well. The whole structure of how GM does business will make no sense in the future. Why anybody would invest in a GM when there are amazing plays in the battery industry that is growing 50-100% every year is beyond me.
- friedman23 6y ago
  Almost all of the debt is in GM Financial which is a subsidiary. If GM Financial debt goes bad GM can just shutter the company. Also the debt is from leases, people right now during the pandemic are prioritizing paying their leases over the home loans and rent.

totalZero 6y ago

If there is a cash takeout, the IV will go down. If there is a share component to a hypothetical acquisition, the IV will potentially increase. However, I'm not sure how likely that is. Just be aware that your Vega p&l could be negative, so extremely long dated calls with a lot of Vega may need a big gap between a cash takeout price and spot in order to be profitable.

rlonn 6y ago
This reads like finance buzz bingo
- totalZero 6y ago
  I'm just saying that long-dated calls can lose money in a cash acquisition.
friedman23 6y ago
I'm already up 200% on my $150k bet. The IV was basically nothing a month ago.

pmorici 6y ago

Yeah I’m sure Tesla is just chomping at the bit to take on a debt portfolio backed by ICE vehicle loans and leases. The assets underlying all that debt are going to have a drastic revaluation as electric takes over. I would bet on a GM bankruptcy within 5 years. GM is blackberry it’s 2008.

pokerhobo 6y ago

GM has about $100B in debt https://www.benzinga.com/news/20/09/17407586/a-look-into-general-motorss-debt#/:~:text=General%20Motors's%20Debt%20According%20to%20the%20General%20Motors’s,company%20has%20a%20net%20debt%20of%20$98.94%20billion https://www.benzinga.com/news/20/09/17407586/a-look-into-gen.... Help me understand how I’m misinterpreting this.

pmorici 6y ago
He probably means that a lot of that debt is related to loans and leasing.
nickik 6y ago
People make the argument that this is not a bad thing because these loans are backed. In my opinion this is crazy. With EV at an inflection point, the value of used ICE cars will totally collapse and newly produced ICE cars will lose massive amounts of value as well. The whole structure of how GM does business will make no sense in the future. Why anybody would invest in a GM when there are amazing plays in the battery industry that is growing 50-100% every year is beyond me.
friedman23 6y ago
Almost all of the debt is in GM Financial which is a subsidiary. If GM Financial debt goes bad GM can just shutter the company. Also the debt is from leases, people right now during the pandemic are prioritizing paying their leases over the home loans and rent.