Short a stock, TSLA
The first experience to short a stock, TSLA
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From last week to this week, I have a little joy in investment, and I will share with you.
TSLA has risen from below US$800 per share in early October to more than US$1200 per share in early November, an increase of more than 50%.
However, I didn’t even have a share!
Then, …
I just spent $5,300 on November 2 last week to buy a Put Option of TSLA. (Note: 1 contract = 100 shares)
The characteristic of this kind of thing is that when its corresponding stock falls, it will rise.
I think TSLA has risen by 50% in a month, that is too much. If I have stocks on hand, I will sell them immediately.
But I don’t have any TSLA stocks in my hands, and I wish I could also get benefit from it when it somehow rises to an unattainable level.
So I bought a Put Option and waited for it to fall, and then I will be profitable….
As a result, Musk held an unprecedented online poll last weekend, asking fans whether he would like to sell 10% of TSLA stocks he owns, that may be an astronomical figure for me. As a result, there are more than 50% of his fans vote for “Yes” Musk should sells …
As a result, on Monday and Tuesday, TSLA stock fell from US$1200 to about US$1000, a drop of about 20%.
Then, my TSLA Put Option bought for US$5,300 rose to US$10,000 within 2 days, the increase percentage = 4700/5300 = 88%!
I don’t have the best luck to sell at $10,000, however, I just have a second luck to sell at $9,700, so the net profit is 9700–5300–0.65*2 = 4,398.7 (about 4400) US dollars.
Thank you Musk.
Maybe in the next few days, TSLA stock will continue to fall, and my sold option will continue to rise… However, this amount of Bonus is enough to help me buy a new mobile phone for my love. Therefore, the rest is just left to others to earn.
I’ll take a break and then look for other opportunities.
PS: The so-called “Put Option” is a kind of commercial contract.
When I bought a one from a certain institution (similar to our stock exchange company or futures exchange company), that is to say, before the specified date, I have the right to sell them the stocks at a mutually agreed price (commonly known as the Strike price). In my current example, the Strike price is US$900, so when TSLA keeps falling, e.g., falling to US$500 (just assuming), then I have the right to sell them with the promised price US$900. Of course, I will be sure to go get a stock worth US$500 and then sell them for US$900.
The most extreme situation is that TSLA will be bankrupted, and then its stock will be worth 0. Then I would also be happy spend US$0.1 to buy a stock, and then sell it for US$900!
That’s why it is said that when you buy a Put Option, it is best that the stock falls as much as possible, and it is best to fall to bankruptcy! !
This is the so-called “short” a stock.
PS2:
When shorting a stock, what is the risk?
That is, the corresponding stocks have been rising, or have not fallen enough, such that it is below the agreed price of US$900 within the time limit. Of course, I am not willing to get a TSLA stock worth more than US$900 and then just to sell them. for US$900. So I will give up this selling right directly at that time, and then the my initial investing money $5,300 will say ByeBye to me….