A famous Tesla short seller made a big bet: Tesla stock would be under $200 by January 2020.
He purchased a large number of January 2020 $200 puts — contracts that allow him to sell shares of Tesla for $200 until January 2020. If Tesla shares were priced at around $100, he could make a killing buying shares on the market and selling them via his options contract for $200 a share.
However, if January 2020 arrives and the share price is more than $200… the “very large position” of options he bought will be completely worthless. Because Tesla shares can be sold on the market for $350 today, using the contract to sell shares for $200 is completely pointless. As Mark himself would say, his position “is a zero”.
Best of luck to Mark BS as he attempts to recover from this huge loss.
I have a tiny position in July & August puts that- if $TSLA goes $TSLAQ quickly– pay 1500:1 on the July's & 200:1 on the August's. But I have a very large position in January 2020 200s/210s because by then it'll just be a busted growth story, + I have common shorted yesterday.— Mark B. Spiegel (@markbspiegel) June 23, 2018