Mike Khouw spotted an options opportunity. The opportunity involves Tesla. Specifically, the Roadster. More specifically, the reveal of the Roadster on October 1st. Most specifically, the fact that retail traders will see an expensive car and immediately start buying calls like they're collecting Pokémon cards.
The Roadster will be Tesla's most expensive vehicle. This is the unique opportunity. A car that costs more than other cars creates a chance to sell options to people who think expensive means good. These are the same people who bought Peloton at $160 because the bike had an iPad attached to it.
Khouw's thesis rests on a reveal. Not the car reveal. The reveal that happens inside the brain of a Robinhood user when they see Elon Musk stand next to something shiny. That reveal triggers a purchase. The purchase triggers theta decay. Theta decay triggers a margin call. The margin call triggers a Reddit post about market manipulation.
Tesla already makes expensive cars. The Roadster will simply be more expensive. This is somehow a catalyst. In the same way that adding a thirteenth item to a twelve-item menu is a catalyst. Or the way changing your profile picture is a catalyst. It's not a catalyst. It's a f*cking car.
The options opportunity exists because someone will pay $400 for a weekly call on October 2nd after watching a livestream at 2am. They'll wake up Friday, check their account, and see that implied volatility collapsed faster than their parents' hope for grandchildren. Then they'll tweet that options are rigged and go back to work at the vape shop.
Khouw gets paid to find these opportunities. You get paid to lose money on them.
Photo by Tesla Fans Schweiz on Unsplash
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