Even the most cynical TSLA shorter would be insane not to throw money at a brand new Elon Musk venture. (If they have any left, shorting TSLA is an expensive hobby.)
That’s not really true. The stock is flat over the past year. To be a musk investor now, you have to accept that you’re late to the party, and enjoy buying into rich valuations with a lot of hype baked in.
The nature of shorting is that you make money only when stock drops significantly in a short period of time.
If stock is flat, you loose your money. All of it.
If stock drops less than premium you paid for the option, you loose money.
If stock drops a day after your option expiration date, you loose money.
This year there were a couple of dips (~20% in short period of time) where you could have made money shorting. Caveat: if you timed it perfectly and good luck with that.
To put real numbers: a 3 month short will cost you about 10% of stock price. To make money stock price would have to drop more than 10% and you would have to execute the short at the right time in that 3 month window (as opposed to waiting for even bigger drop and loosing because the stock went up).
Even with TSLA stock gyrations in the last year, that's a bet very unlikely to have been profitable for most people.
You’re talking about buying puts, which is different from shorting the stock. If you short a stock that stays flat, you’re out your borrowing costs but nothing more.
