The TSLA Saga Jan 10

Upcoming change

I tried to have a normal quiet life, but it is not meant to be. It seems that I will be dragged back into some really chaotic events and the time table of things that are supposed to happen in September just got moved up to February. I will be able to talk about it one day. I’ll put it up there as one of my life’s crazier moments. As insane as going undercover in a maybe cult and getting surrounded in Morocco in the souks after midnight.

So I will be forced to quit my part time job in order to handle the craziness. I hope I can talk my way into working only 2 days a week.

I am very interested in these investigations that I am doing on various front in the stock market. Currently exploring the algorithm of MmMmM (Maximum Market Maker Money Making) algorithm and the Saudi’s financials. Immediately bumped into several roadblocks. The first road block is data access. I needed fast real time market data to properly do an analysis that doesn’t require me clicking and waiting for 5 minutes each time and dragging on the investigation for a month. Currently I am negotiating API access with my main brokerage “ThinkOrSwim” and doing everything I can to figure out how to get to the data by leveraging my own account. So I am not just waiting around twiddling my thumbs.

I will also need to explore how to get to hidden data that are not available to retail investors. Especially does concerning the Saudi’s oil funds that is shrouded in mystery. All these things can be done freely, but can be done faster with money. So I’ve decided to setup a Paetron page that allows people to do small monthly contributions. If the interest is high, I will keep doing this with more data and time dedication, otherwise I will keep this as a hobby side project that benefits only me and do what I can with freely available information.

MmMmM Investigation on TSLA

The most immediate suspicious trade is the $200 strike put with 17000 options contracts outstanding. If you look into its trading history you see the following: (Bar graph is volume, blue line is open interest)

I originally suspected that the big sell side money who earns premiums have been selling both call and put LEAPS when it got created so that they need to move the Stock price back to the level when the LEAPS were first created. But since most of the options were created during the September to December period, we can almost discard that theory right away. Add to the fact that the first 8000 contracts were created with a premium of approximately $100 per contract, we can safely assume that the sell side have already earned their money and will only suffer a loss if the stock falls below $100.

Instead, the actual forces in play is more recent. About 9000 contracts existed before September and a further 8000 contracts were created between September to December. Around that time, the stock price were trading around the $210 area with a premium of $10. So most of the sell side will need the stock price to be above $190. At $190, we can see the sell side become a net buyer of TSLA shares. But it will probably happen at a higher price as it is more profitable to move the price to above $200 and let all options expire worthless.

To get a complete picture, I will have to go through this same process with each strike price of the January 2016 expiration. Manually doing this for the $200 strike put option took me an hour when the broker is not hiccuping. So a complete analysis is not feasible at the moment.

Disclaimer

This is a generic disclaimer I attach to all financial based posts to catch all disclaimers. I own everything I talk about. If you suspect I own something or have an Agenda just assume yes. Assume the worst. Assume I am not acting on your best interest.