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These articles never take into account what investor’s NET exposure is. An investor who has a lot of tesla shares might write calls to collect premium. Or buy

by gizmo 3y ago

These articles never take into account what investor’s NET exposure is. An investor who has a lot of tesla shares might write calls to collect premium. Or buy puts for downside protection. Or short tesla shares to offset out-of-the-money calls. Or maybe an investor has a large position in an ETF that has a position in tesla. If the investor wants to be neutral tesla he has to short the stock in order to cancel out the tesla exposure through the ETF. I don’t know why the subject of short selling makes peoples brains melt.

o11c 3y ago
> I don’t know why the subject of short selling makes peoples brains melt. Because it's an easy target among the financial world, which is divorced from reality in general.
- jakderrida 3y ago
  > which is divorced from reality in general. It's not exactly divorced from reality. You can synthetically create the very same position. While it sounds like what they're doing is attacking markets and economy, that's just not the case. Unless they made both the options and derivatives markets illegal and also made borrowing and lending stock shares illegal, shorting the security is a position that can easily be created. It was organically discovered at the Amsterdam Stock Exchange within like a couple years after it was founded. The exchange didn't invent it and start offering it either. The traders simply realized that if they could borrow/lend and buy/sell, then they can take an inverse position.
  - o11c 3y ago
    Oh, I agree that the hate for short-sellers is overdone. But the financial world (and the stock market in particular) forces the detachment of "profit" from "(useful) productivity", and this is clear to everyone, even if they don't express it like that.
nateglims 3y ago
With Tesla specifically, Elon promotes a "short sellers are evil" line.
- threeseed 3y ago
  Which is an integral part of Tesla's PR and marketing strategy. The idea being to cultivate an underdog attitude amongst owners. Even on Reddit's EV and Tesla forums you will see people default to wild conspiracy theories in order to defend the actions of the company or explain why EVs are having issues in certain areas.
  - grecy 3y ago
    I don't think you need a huge conspiracy theory when one of the richest people in the world has a billion dollar short position on an EV company.
    - nateglims 3y ago
      I know it's fun to hate on billionaires these days, but it's not a conspiracy to short sell. If you look at the PE ratio and look at the automotive market and other telsa ventures, it's perfectly reasonable to believe it will not "clear the runway" with growth. The short sellers also happened to be really wrong this year.
      - grecy 3y ago
        Why does an extremely rich person want to bet a billion dollars against EVs?
        ozfive 3y ago
        I'm assuming here: It was a hunch where he probably was thinking that the incumbent auto-makers would catch up and squash the new guy. People make these decisions all of the time based on what they know and how history has played out.
        3y ago

by gizmo 3y ago

o11c 3y ago

> I don’t know why the subject of short selling makes peoples brains melt. Because it's an easy target among the financial world, which is divorced from reality in general.

jakderrida 3y ago
> which is divorced from reality in general. It's not exactly divorced from reality. You can synthetically create the very same position. While it sounds like what they're doing is attacking markets and economy, that's just not the case. Unless they made both the options and derivatives markets illegal and also made borrowing and lending stock shares illegal, shorting the security is a position that can easily be created. It was organically discovered at the Amsterdam Stock Exchange within like a couple years after it was founded. The exchange didn't invent it and start offering it either. The traders simply realized that if they could borrow/lend and buy/sell, then they can take an inverse position.
- o11c 3y ago
  Oh, I agree that the hate for short-sellers is overdone. But the financial world (and the stock market in particular) forces the detachment of "profit" from "(useful) productivity", and this is clear to everyone, even if they don't express it like that.

nateglims 3y ago

With Tesla specifically, Elon promotes a "short sellers are evil" line.

threeseed 3y ago
Which is an integral part of Tesla's PR and marketing strategy. The idea being to cultivate an underdog attitude amongst owners. Even on Reddit's EV and Tesla forums you will see people default to wild conspiracy theories in order to defend the actions of the company or explain why EVs are having issues in certain areas.
- grecy 3y ago
  I don't think you need a huge conspiracy theory when one of the richest people in the world has a billion dollar short position on an EV company.
  - nateglims 3y ago
    I know it's fun to hate on billionaires these days, but it's not a conspiracy to short sell. If you look at the PE ratio and look at the automotive market and other telsa ventures, it's perfectly reasonable to believe it will not "clear the runway" with growth. The short sellers also happened to be really wrong this year.
    - grecy 3y ago
      Why does an extremely rich person want to bet a billion dollars against EVs?
      - ozfive 3y ago
        I'm assuming here: It was a hunch where he probably was thinking that the incumbent auto-makers would catch up and squash the new guy. People make these decisions all of the time based on what they know and how history has played out.
      - 3y ago