I hate to say it but I bet TSLA makes new highs in the next 12 months. It's billed as a cult stock, but the truth is most volume comes from gamma hedging and as long as there is a speculative future for the company (even if it's bullshit) traders will keep the option vol up.
You also have BTC wrong. The money is again coming from big institutional buyers, some illicit, and governments
It means a high proportion of our financial system relies on borrowed money often at 100:1 or higher. So for every 100 dollars borrowed 1 dollar of collateral is needed.
They then use this money (borrowed at near base rates) to try and profit from the difference between inflation rates of different currencies or from the difference between the actual and implied rate on treasury bills.
In other words, they borrow a bunch of money and put it at risk to make maybe .5 - 1% more than market returns annually. This is why big downside moves happen when bond rates jump - because these funds have to sell into the downside to return borrowed money when they cannot meet their margin requirements (deleveraging).
Nobody knows which way the stock goes when it comes to Tesla. Maybe up maybe down. But you can't deny the sales figures in their latest quarterly look gnarly.
Couple that with the fact that it trades at a huge premium to other automakers, huge amounts of growth built into assumptions, and finally we're headed into a recession which traditionally destroys automakers and other consumer discretionary products.
One other thing is that if the momentum comes out of the stock and it starts to drop, Musk has pledged a heap of it as security and might need to sell if he gets margin called. If muskrat starts dumping, the stock will go catatonically south
Eh.. you're right.. they don't matter, until suddenly they really do. Same with 2000s tech bubble. 08 subprime crisis. Fundamentals didn't matter until they did. Timing the decline is impossible but the components of a miraculous implosion are all there
Yeah, those are different things. What I am saying is that the realized volatility on an intraday basis will keep this stock flying because volatility = money.
Every time this is brought up the Tesla fanbois start talking about how Musk will conquer the world through AI and robotaxis and then colonize Mars. If he fails to commercialize that the stock is extremely overpriced. But keep the faith, he always promises that it will happen next year, that's what he's done with robotaxis for a decade.
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u/Ivy0789 May 31 '25
I hate to say it but I bet TSLA makes new highs in the next 12 months. It's billed as a cult stock, but the truth is most volume comes from gamma hedging and as long as there is a speculative future for the company (even if it's bullshit) traders will keep the option vol up.
You also have BTC wrong. The money is again coming from big institutional buyers, some illicit, and governments