Comments
Transcript
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STHow is perma Tesla bear Mark Spiegel doing ? He seems more quiet these days
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RGHe was correct
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CMHoly cow! Blast from the past. I remember you from TradeSmart U. From there, to RL, and now RV! Congrats! (great trade too, btw)
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bmA good trade is a lonely trade Jeremy...You remind me of me a little. I learned trading from Andrew Lo and other great teachers on youtube.
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bmIts almost Jan 2020...well done Jeremy
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MLAfter having read Jerremy respond to every person speculative of his abilities with an update on how he made money on this trade, I was hoping Jerremy can respond to me as well and update me on how he made money on this trade.
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JSGood luck!
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PSlol Are there any other shares he likes? This is a low point - what an idiot
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MTI would like to give Mr Newsome a big thumbs up for his approach. I don't view all the RV Trade videos, but this is a first for me to find someone on RV advocating short premium option trading. If one puts in the time, in my case over 14 months of daily total immersion in the subject to become proficient at a basic level, still much to learn, if one is able to grips with short premium trading then the prize at the end being: 1. the option market itself shows the short premium trader where the best opportunities are to be found. 2. no need for stock tips, subsription newsletters, can totally ignore the news, and most importantly absolutely no need for Technical Analysis and charts to find opportunity. 3. In my own trading I stick to underlyings with highly liquid option markets 4. completely agnostic on what underlyings I trade. TSLA btw has been a wonderful trading vehicle for short premium option trading for a long time. 5. at entry most trades are directionally agostic 6. if and when a position starts to go bad, and most will at some point in time, being short premium ie credit's received at opening, there are a whole range of adjustment techniqes all of which receive yet more $$$ credits to keep the position going.
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YBThank you for bringing a Tesla bull! His case is based on two ideas: A. $TSLA will not drop $120 in the next 7 months. We've seen that happen in the past so I am not sure that is such a strong case. B. Elon Musk = Tesla. If that's the bull case, it is not a case. Staying short $TSLA.
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AKMargin ? Option is up to $5.25 today so that is 5.25 % return for 211 days.
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DPOmg 😮 folks from YouTube school now? No credibility
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OCJack of all trades, master of none!!! Selling 7-months Puts on Tesla? I rest my case.
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skSelling a put option at 50% below spot makes one a bull? A real bull would buy a call and not sell insurance. To me a bull would take a view that Tesla stock is going higher from current levels and not take a view that stock won’t fall more that 50%.
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AMSelling naked volatility on TSLA? What could possibly go wrong? There are about half a dozen Mike Green conversations on RV that need to be watched and re-watched before putting on this type of trade. In the example provided, the maximum loss is US$20,000. Maximum gain is the put premium. Not exactly compelling risk-reward. Also buying a put won't protect you if the stock gaps down through your planned strike price. The put spreads don't look half bad, but here I am being a bear again.
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CWI give it a thumbs up because this is a blow up awaiting to happen. I am going to follow this guy on Twitter and grab my popcorn and enjoy the shit show.
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DRThat was funny thank you!
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RTFirst I was like *lol*... but then I was like *LOL*... I wish him good luck though.
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CB"Elon is a visionary," etc. is not a process. It's worse than no process. It's dumb. "$420. Funding secured."
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TT5 minutes of my life gone. Bull thesis: "but Elon Musk is a visionary. In my opinion, he's probably one of the smartest if not the smartest person on Wall Street today." Newsflash, Elon is the CEO of a public company in Fremont, CA. But he is no "person on Wall Street".
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SUJerremy fundamentals was Elon Musk speech. Reminds me of my favourite film - Dumb and Dumber
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MHOh come on? This chart is in a dead cat bounce and it may even be over, frankly, I expected higher but it is not looking great. You want more evidence of a trend break or a better-looking base before you got long this thing! JMO.
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MSSeriously???? I understand realvision wants to bring diverse points of view, but this is the worst trade recommendation ever!
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DG@Jeremy - I'm new to investing but suggesting that the only meaningful downside risk to Tesla is loss of the CEO, regardless of your outlook on the company, seems very dangerous. I expect more from Real Vision and by association, you. I've learned so much from Real Vision videos but in this one I learned you are bullish on Tesla and nothing more. I did not learn why you are bullish. What is your process? What factors are limiting downside risk? How are the probabilities weighted? etc. I, as a complete amateur, could have come on Real Vision and said the exact same things without anywhere near your experience or knowledge - which is what I am here for. Do better!
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SP$800 on $2000 cash secured is 4% for 7 months or about 7% per annum. Seems a strange way to try to earn 7% annualized.
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DJThe risks associated with trying to make $800 on this naked put are huge, pour job at explaining how negatively convex this trade is, stomaching this trade as it goes against you isn’t worth it even if TSLA trades above $100 @ expiration. Wait til a $250 test and sell an OTM call spread to finance a Later dated PUt is a trade I will put on given the opportunity
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KSThis is a joke right? The best trade idea that came from this is to take the other side of anything this guy does.
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DFThe day I hear a Tesla bull not using the word "visionary" as part of their case, I might even pay some attention. If this is the best you could find on the bullish side,. I guess I'll have to buy more puts
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JDThe funny thing is.....I have a better idea of the people bullish on Tesla.....these folks are dumber than rocks. Selling puts? On a company that destroys capital? And your thesis is......Elon Musk? Does he shit gold bricks? The cult of personality is so strong. I can't wait for Tesla to blow up.
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TRTesla will not only survive, but dominate.
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HKcame for the curiosity, stayed for the comments
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LSOh god
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NIAs I write this, TSLA Jan $100 is $5 and Jan $90 is $4. You would be far better off selling a 100/90 spread. 1/9 is nearly 2x the return on risk than 5/95. I agree about the annual meeting, but I'm also old enough to recall that it was the same with "Kenny Boy" and his cronies at the Enron annual meeting. The turnstiles wouldn't be spinning off the hinges with executive departures if Tesla wasn't in very deep trouble. I wouldn't sell the Jan $100 put for less than $100.
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TDMy uncle bought Tucker Automobile stock. Visionary inventor
 Preston Tucker risked everything when he saw his 1948 automobile as a vehicle for change
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KKAre we seriously discussing a trade idea that's gonna make him $800? Just get a job.
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NLDifferent trade ideas are a good thing, even though you might think it's a bad one. But come on, this guest started the video by being a slick snake oil salesman and self promoting his own company for God's sake ... }:o)
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NCJust another example of how bad the content is getting on Real Vision. I mean, where did you find this guy? C'mon Raoul...
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NMWell described. Don’t hate the Tesla, hate yr stubborn ways.
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GMThe final chart illustrating the payoff recommended by this naked put seller is very misleading. This type of chart is useful only for non-convex strategies but should not be used whenever contingent claims are involved.
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NOI see the search for a bull with a detailed, well researched and compelling thesis continues. Surely there must be someone out there?
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TPIt’s like stealing candy from a baby.
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IZWhat a great world be live in......
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BWThis does nothing to highlight the value of a Real Vision subscription.
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PCElon Musk is intelligent, witty, and a visionary. But he does not strike me as being a good CEO. I would feel happier about Tesla if he were something like Director of Technology, and a hard-headed, disciplined business person with experience of the manufacturing industry were in the role of CEO. The main issue with Tesla is: can it start to make a profit and become cash flow positive before it runs out of money? Up until now, investors have been very patient and have bought the bond issues and tolerated the share dilution. If profits do not materialize soon, patience will run out, a financial restructuring will be needed, and the existing shareholders will get a severe wedgie.
JAKE MERL: Welcome to Trade Ideas. I'm Jake Merl, sitting down with Jerremy Newsome of Real Life Trading. Jeremy, great to have you on the show for your very first Real Vision interview.
JERREMY NEWSOME: Yes, man, thank you so much for having me. I appreciate it.
JAKE MERL: So, before we get into your trade idea for today, can you please briefly review your background, who you are and what you do at Real Life Trading?
JERREMY NEWSOME: I went to school for a finance degree and I was learning in college, I want to learn how the stock market works. And as you know, in college, they teach you all about the stock market and how to enter and how to exit and how to hold. And since, purely sarcastic, I didn't learn anything in college and you start hitting the books, man, going to YouTube and just learning how to trade and what I do now is I teach people how to profitably and safely trade the stock market in all avenues- day trading, options, long term investing, swing trading, credit spreads, the whole gambit, futures, cryptocurrencies, forex, all that.
JAKE MERL: And so, with that in mind, what are you looking at right now?
JERREMY NEWSOME: So, specifically, right now, Tesla, I'm a Tesla bull. And I know some people who're watching this are going to be a little shocked by that. Particularly, the plan that I'm looking at, the strategy is actually selling volatility. Right now, Tesla has a lot of volatility, a lot of people are expecting it to crumble, they're more or less expected to go to zero. Balance sheets are terrible. Elon Musk, in an email, said they don't have enough cash for a few months of operations. So, my plan is to sell some premium on the downside, which means selling puts. So, I'm literally planning on selling insurance to someone on Tesla, that's a put sale is that particular strategy.
And I'm looking at the $100 strike price for January of 2020. So, we're talking about seven months away, my number one plan is that Tesla will not crash down to 100. So, when you're selling an option, it is a very bullish position. So, my plan, when you sell put options, your plan normally is to be totally fine actually owning the shares of Tesla. So, my plan, my thought process is how many shares would I like to buy at 100? And the answer is two. Two contracts which is 200 shares, which would be a $20,000 investment. So, owning Tesla at $100 a share, two contracts, 200 shares $20,000 investment, I will get paid to do this particular trade.
So, when I sell the option, you actually go into your account, click sell to open, and it's a trade that requires margin or a lot of cash, $20,000 in cash and you'll actually get paid to do that trade. So, upon submitting it, you're going to receive right now approximately $400 per contract. So, in the trade, you'd actually get paid $800 to just sit back and do nothing.
JAKE MERL: And that's over the course of next seven months?
JERREMY NEWSOME: It's all the course of next seven months, right. And so, the overall perspective is if Tesla does go down all the way to 100, my worst case scenario on this particular stock trade, this option setup is that Tesla goes to zero. That's my worst case scenario. But that's the exact same worst case scenario is if you own shares, the stock goes to zero. So, realistically, I'm personally only going to protect my downside by going long puts if it breaks 150.
JAKE MERL: Gotcha. And so, that would limit your risk you're saying?
JERREMY NEWSOME: Yup, exactly. So, and the cool part is insurance companies do this all the time. It's actually called reinsurance. So, an insurance company like Nationwide, that's a company that used to work at when I was younger, they would ensure their positions, they have all this insurance and they'd actually buy insurance on that just in case a claim actually happens. So, it's great. So, in this particular scenario, I'll be selling a longer term option. And then if Tesla starts breaking these primary levels, about 150 and 140, I could then buy an insurance contract protecting the downside as Tesla continues to go lower, if that happened, which I do not expect it to.
JAKE MERL: And why don't you expect it to?
JERREMY NEWSOME: I think the worst is here. The presentation that Elon Musk just gave at the shareholders' meeting was outstanding. I realized that this will be a controversial interview. That's to be expected. The market is very volatile with Tesla, a lot of people expect it to go to zero, but Elon Musk is a visionary. In my opinion, he's probably one of the smartest if not the smartest person on Wall Street today. And his vision is so compelling and incredible. The shareholders who were in that meeting were like, I love this guy. Love the company and love the team. Love the product, love the vision.
JAKE MERL: So, what would you say is the biggest risk to your thesis?
JERREMY NEWSOME: The biggest risk to my thesis is, realistically, Elon Musk either getting sick, getting fired as CEO, quitting as CEO or something unfortunately happening to him, a loss of life. That's realistically. If Elon Musk is the CEO of Tesla, this trade works.
JAKE MERL: Well, Jerremy, we'll see how it plays out. Thanks so much for joining us.
JERREMY NEWSOME: My pleasure.
JAKE MERL: So, Jerremy is bullish on Tesla. Specifically, he likes selling the January 2020 100 trek put option on Tesla. That was Jerremy Newsome of Real Life Trading and for Real Vision, I'm Jake Merl.