Derivative instruments and their role

in modern economy

By,
Ctlin Mihai Nstru

Under the guidance of

Prof Jakub Keller

Content:
1. Short description of the instrument
2. Info spot price, historical data
3. Stock analysis
- Fundamental analysis
- Sentimental analysis
- Technical analysis
- Interpreting the results for 3 months
- Calculate the volatility of the stock using modern portfolio theory
4. Option chain
- Pricing the option using BSM
- Use of a simple strategy
5. Results
- How investing in options is more profitable than buy and hold stock strategy
6. Complex Strategy
- Strategy for bull market
- Strategy for bear market
7. Conclusion

1. Short description of the instrument:

Tesla Motors, Inc. (TSLA) designs, develops, manufactures, and sells electric vehicles and
electric vehicle powertrain components. The company also provides services for the development of
electric powertrain systems and components, and sells electric vehicle powertrain components to other
automotive manufacturers. It markets and sells its vehicles through Tesla stores and galleries, as well
as over the Internet. The company operates a network of 80 stores and galleries in North America,
Europe, and Asia. Tesla Motors, Inc. was founded in 2003 and is headquartered in Palo Alto,
California.1
On June 29, 2010, Tesla Motors launched its initial public offering on NASDAQ. The IPO raised US$226
million for the company.

Tesla's strategy has been to emulate typical technological-product life cycles and initially enter
the automotive market with an expensive, high-end product targeted at affluent buyers. As the
company, its products, and consumer acceptance matured, it is moving into larger, more competitive
markets at lower price points.2
2. Stocks information

Figure 1 Source: http://finance.yahoo.com (06.01.2015)

Annex 1: Historical prices

3. Stock analysis
3.1.

Fundamental and sentimental analysis

1 http://finance.yahoo.com/q/pr?s=TSLA+Profile
2 http://en.wikipedia.org/wiki/Tesla_Motors
3

a. Financial ratios
Current
SHARE VALUES
Earnings Per Share - TTM
Dividends Per Share - TTM
Book Value Per Share
Free Cash Flow Per Share
Sales Per Share

YoY

2010

2011

2012

2013

($2.53)
$0.00
$2.14
($3.86)
$2.03

($3.69)
$0.00
$1.09
($5.11)
$3.85

($0.62)
$0.00
$5.42
($1.10)
$16.86

($1.12)
$0.00
$5.42
($1.10)
$16.86

495.52%
79.85%
364.67%
77.17%

($3.04)
$0.00
$2.18
($3.09)
$2.30

-18.695
-2.9796
22.66
-3.0436

1115.44%
1354.54%
67.89%
3034.73%

-63.566
-39.762
26.323
-125.78

-118.03
-46.271
30.158
-123.13

-227.22
-43.34
7.2756
-95.409

-18.695
-2.9796
22.66
-3.0436

6.0035
-3.6759

71.97%
2508.23%

1.3663
-132.19

1.8358
-124.56

1.683
-95.876

6.0035
-3.6759

ACTIVITY RATIOS
Total Asset Turnover
Inventory Turnover

0.83308
4.7668

55.48%
53.33%

0.30238
2.2043

0.28627
2.6396

0.3709
2.2246

0.83308
4.7668

FINANCIAL RATIOS
Long-term Debt to Capital
Financial Leverage (Assets/Equity)
Fixed Charge Coverage Ratio
Dividend Payout (% of Earnings)
Quick Ratio
Current Ratio

47.309
3.6229
-1.0565
0
1.3301
1.875

-62.22%
-146.62%
4670.29%

25.888
1.8647
-154.4
0
2.1021
2.7568

54.758
3.1844
-49.364
0
1.6376
1.9486

76.742
8.935
-50.398
0
0.4597
0.9734

47.309
3.6229
-1.0565
0
1.3301
1.875

PROFITABILITY
Return on Equity (ROE)
Return on Assets (ROA)
Gross Profit Margin
Operating Profit Margin
Tax Rate
Interest Rate - Estimated Average
Net Profit Margin

65.44%
48.09%

Table 1. Source: TD Ameritrade paperMoney - Thinkorswim trading software

Based on financials we can observe a YoY increased sharply for every ratio, which can be
translated into the company fast growing and a bet for bullish stocks. Yet we cant only buy stocks
based only on the financial ratio, we need more information about the company.

Price / Earnings Ratio estimates3

Forecast Earnings Growth

3 http://www.nasdaq.com/
4

b. Press released
On October 4, 2014, Tesla announced the 60D,
85D, and P85D dual-motor all-wheel drive variants of
the Model S. The high-end P85D can accelerate from 0
to 60 mph in 3.2 seconds and has a top speed of 155
miles per hour (249 km/h).4
On November 26, 2014 Tesla Motors announced
the completion of upgrades to its Fremont, California factory.
The Tesla Model X was unveiled at the
company's
design
studios
in Hawthorne,
California February 9, 2012. However, Tesla
announced in February 2014 that in order to focus on
overseas roll outs of the Model S during 2014, the
company expects to have production design Model X
prototypes by the end of 2014, to begin high-volume
deliveries for retail customers in the second quarter of
2015. In November 2014 Tesla delayed one more time
the start of deliveries to retail customers, and
announced the company expects Model X deliveries to begin in the third quarter of 2015.
On 4th September Teslas founder, Elon Musk,
announce a project for $5 billion in wich is planning for
building a facility as a key step toward making electric
cars more affordable, while ending reliance on oil and
reducing greenhouse gas emissions. The facility will
produce high-voltage battery and will be entirely
powered by renewable energy.5
Tesla said it lost $62 million in the second
quarter, when they delivered 7,579 vehicles. The
company says it's on track to deliver 35,000 cars by the
end of 2014. A Tesla Model S retails for $71,070, according to the Tesla website.6
On 18th February we expect annual financial report of the company, so we should take this in
consideration when trading company.
4 http://en.wikipedia.org/wiki/Tesla_Motors
5 http://www.bloomberg.com/news/2014-12-05/musk-battery-works-fill-utilities-with-fearand-promise.html
6 http://www.businessinsider.com/r-tesla-factory-near-reno-is-bet-old-nevada-will-meetthe-new--2014-10
5

So, in order to asses better a company valuation we need to understand their products, services,
and future projects. Based on some announces made by the company and the founder Elon Musk we
can see that is planning to expand. Also we can see that the cars companys manufactures are in great
demand by customers, and orders are rising. This can be a sign of company power and financial
strength.
3.2.

Analyst Opinion sentimental analysis

Date

Research Firm

Action

From

To

17-Oct-14

MLV & Co

Initiated

Buy

08-Oct-14

Tigress Financial

Initiated

Neutral

02-Sep-14

Stifel

Upgrade

Hold

Buy

11-Aug-14

Deutsche Bank

Upgrade

Hold

Buy

26-Mar-14

UBS

Initiated

20-Feb-14

Deutsche Bank

19-Feb-14

FBR Capital

Initiated

07-Nov-13

Standpoint Research

Upgrade

Sell

Hold

02-Oct-13

Robert W. Baird

Downgrade

Outperform

Neutral

22-Aug-13

Stifel

08-Aug-13

Barclays

Downgrade

Overweight

Equal Weight

Deutsche Bank

Upgrade

Hold

Buy

Northland Capital

Initiated

26-Jul-13
01-Mar-13

Downgrade

Neutral
Buy

Hold
Mkt Perform

Initiated

Hold

Outperform

Table 2. Source: http://finance.yahoo.com/q/ud?s=TSLA

Recommendation Trends
Current Month

Last Month

Two Months Ago

Three Months Ago

Strong Buy

Buy

10

11

Hold

Underperform

Sell

Table 3. Source: http://finance.yahoo.com/q/ao?s=TSLA+Analyst+Opinion

From the analyst point of view we can see that the recommendation is to buy and hold.
Actually the company shares are forming an uptrend as we can see in the figure 1.
Overall if we look on the fundamental analysis of the company we can see a strong bullish
trend. But relying only on fundamentals and sentimental analysis is like we stay on a stool with only
two legs. We risk falling and hurting ourselves. So we need to see what is happening at technical level.
3.3.

Technical analysis

Technical analysis is the framework in which traders study price movement.The theory is that a
person can look at historical price movements and determine the current trading conditions and
potential price movement.

Fibonacci
Traders use the Fibonacci retracement levels as potential support and resistance areas. Since
so many traders watch these same levels and place buy and sell orders on them to enter trades or place
stops, the support and resistance levels tend to become a self-fulfilling prophecy.
Traders use the Fibonacci extension levels as profit taking levels. Again, since so many traders
are watching these levels to place buy and sell orders to take profits, this tool tends to work more often
than not due to self-fulfilling expectations.
I use a Fibonacci retracement in 1 year chart window, with a low of 136.67 and a high of
291.42, and for Fibonacci extension level I also use 17.12.15 lower level of 192.65. Annex 2

Fibonacci Retracement Levels

Fibonacci Extension Levels

0.236 - 252.88

0.382 - 230.44

0.382 - 252.88

0.500 - 212.31

0.618 - 290.14

0.618 - 194.18

1.000 - 348.01

- 192.2

0.764 - 168.36

3.4.

Interpreting the results

By using the Fibonacci retracement and extension levels I can analyze the past 3 months:
04.09.2014 we can see that in the beginning of the September the price has reached the
maximum value 291.42, which is the 0.0 level of my retracement level.
15.09.2014 we can see an downtrend after the maximum value until this date where 0.236
level acts like support and the price bounce back from 249.13, only is just for a short period, because
on 22.09.2014 price pierce the 0.236 support level bringing the price lower as 235.65 on 01.10.2014.
On this moment we can see a downtrend forming; we expect the price to fall even more.
04.10.2014 but on this date, Tesla announce new motors for the car Model S witch upgrade the
performance of the car, and new orders for this car are availed and also the price meet the 0.382
support level, making the price of the actions rise again to maximum 265.54 on 09.10.2014. Now we
can say its time to buy.
10.10.2014 if we had bought a day earlier just assuming the price will rise due to the press
released, we would have suffered hard, because in this date the market fall 187 points, and influence
our stock, even if beta is lower than other public companies. Fortunately the 0.500 fib level holds,
pushing the price back up from 217.32 on 17.10.2014.
17.10.2014 18.11.2014 in this time the market uptrend resumes moving our actions back
again to 259.99 and we can see the 0.236 fib level acting like resistance pushing the price back again.
7

19.11.2014 Morgan Stanley lowered Tesla 2014 and 2015 earnings expectations, while leaving
the target price unchanged at $320. Teslas 2015 earnings estimate have been reduced to $2.45 from
the previous estimate of $4.39. Shares began a downward trend, being helped by the market which lost
100 points during 05.12.2014 15.12.2014, pushing our shares toward a lower of 192.62 on
17.12.2017, level that coincides with our 0.618 fib level.
18.12.2014 in this moment the market growth resumes, and we can see that our stock price
starts to rise, breaking the 0.500 resistance fib level, but stopping their growth at 0.382 fib level to a
maximum of 228.5 on 26.12.2014. Also this growth can be attributed to 10.12.2014 announcement in
which is said that Tesla car registration in USA increased with 153% .
01.01.2014 present we can see the 0.382 resistance fib level holds, and the price of stocks
bounce back to the previous level, currently standing at the 0.500 fib level with a stock price of
206.75.
For the first part of this year we can see the price fluctuates between 205-225 per share. We can
expect the price to decrease, especially because will follow the financial report release on 18.02.2015,
but we need to consider the other factors.
3.5.
Calculate the volatility of the stock
Volatility refers to the amount of uncertainty or risk about the size of changes in a security's
value. A higher volatility means that a security's value can potentially be spread out over a larger range
of values. This means that the price of the security can change dramatically over a short time period in
either direction. A lower volatility means that a security's value does not fluctuate dramatically, but
changes in value at a steady pace over a period of time.7
a. Calculate historical volatility using standard deviation:
The standard deviation essentially reports stocks volatility, which indicates the tendency of the
returns to rise or fall drastically in a short period of time. A security that is volatile is also considered
higher risk because its performance may change quickly in either direction at any moment.8
I calculate standard deviation from historical price of the TSLA stocks with a timeframe of 2
and 1 and 0.5 years and the results are as follows based on Annex 1 excel calculation:
HV (2 years) = 0.579644
HV (1year) = 0.478902
HV (0.5 year) = 0.414575
Source: Annex 1: Excel sheet with calculation

b. Calculate stock beta

Determines the volatility (or risk) of a fund in comparison to that of its index or benchmark. A fund with a
beta very close to 1 means the fund's performance closely matches the index or benchmark. A beta greater than 1
indicates greater volatility than the overall market, and a beta less than 1 indicates less volatility than the benchmark. 9

Beta is calculated in excel using slope function:

Beta = 1.831541
Source: Annex 1: Excel sheet with calculation

7 http://www.investopedia.com/terms/v/volatility.asp
8 http://www.investopedia.com/articles/mutualfund/03/072303.asp
9 http://www.investopedia.com/articles/mutualfund/03/072303.asp
8

c. Calculate the stock alpha

Measures how much if any of this extra risk helped the stock outperform its corresponding
benchmark.
= Rp [Rf + (Rm Rf) ]
Where:
Rp = Realized return of portfolio
Rm = Market return
Rf = risk-free rate
= 1.9023%
Source: Annex 1: Excel sheet with calculation

d. Capital Asset Pricing Model CAMP

Using the CAPM model and the following assumptions, we
can compute the expected return of a stock in this CAPM example: if
the risk-free rate is 2%, the beta (risk measure) of the stock is
1.831541 and the expected market return over the period is 10%, the
stock is expected to return 16.65% (2%+1.831541(10%-2%))

e. Sharpe Ratio
The Sharpe ratio tells us whether a stock or portfolio's
returns are due to smart investment decisions or a result of
excess risk. The greater a portfolio's Sharpe ratio, the better its
risk-adjusted performance has been.10
If the risk-free rate is 2%, the standard deviation of the
stock is 0.478902 and the expected market return over the
period is 10%, the stock is expected to return 16.70% (10%2%) / 0.478902.
Interpreting the results
Based on the calculation, we can say that investing in Tesla stock is much riskier than investing
in the S&P 500, but also is more rewarding. From the beta calculation we can see that movement in
the S&P500 influence by 1.81 movements in TSLA stock, but also TSLA stock is more rewarding,
beating the index return by 1.9023%. Using CAMP and Sharpe Ratio we can determine that an
investment return must be above 16.65% for the risk worth taking.
4. Option chain
Because of the small amount of return and big capital requirements for investing in stocks and
for hedging our risk we should look into the option chain for a smart investment strategy.
I take the option chain for 27 days time frame with a strike price between 185-230, prices that
coincides with 0,618 fib support level and 0.382 fib resistance level. I want to examine what would be
the price of the options using Black-Scholes pricing model.
10 http://www.investopedia.com/terms/s/sharperatio.asp
9

Impl
Vol

Prob.OT
M

Delt
a

BID

43.54
%
42.73
%
41.84
%
44.56
%
43.64
%
42.84
%
42.11%

19.50%

0.84

22.22%

0.81

25.17%

0.78

22.9
5
20.8
5
18.8

30.32%

0.74

18

33.66%

0.71

16.1

37.28%

0.67

14.4

41.13%

0.63

41.07
%
40.38
%
40.11%
39.37
%
38.58
%
38.78
%
38.15
%
38.37
%
38.57
%
38.15
%
37.45
%
37.62
%

45.08%

0.59

12.7
5
11.15

49.28%

0.55

9.7

53.60%
57.92%

0.51
0.46

8.5
7.1

62.27%

0.42

66.29%

0.38

5.2

70.37%

0.33

4.25

73.89%

0.3

3.7

77.13%

0.26

3.1

80.40%

0.23

2.49

83.56%

0.19

1.95

85.94%

0.17

1.64

ASK

25

Exp
(days
)
27

Strik
e
185

BID

2.5

ASK

Impl
Vol

Prob.OT
M

Delta

3.2

47.45
78.19%
-0.18
%
22.9 27
187.5
2.9
3.45 45.86
75.94%
-0.2
%
20.8 27
190
3.3
3.9 44.61
73.25%
-0.23
5
%
19 27
192.5
3.85
4.45 43.73
70.10%
-0.26
%
17.1 27
195
4.45
5.25 43.25
66.52%
-0.29
5
%
15.3 27
197.5
5.2
5.95 42.47
62.87%
-0.33
%
13.6 27
200
6
6.9 41.99
58.91%
-0.37
%
11.9 27
202.5
7
7.8 41.40
54.84%
-0.41
%
10.4 27
205
8
8.4 39.72
50.80%
-0.45
%
9.05 27
207.5
9.3
9.85 40.11% 46.40%
-0.49
7.9 27
210
10.4
11.4 39.81
42.12%
-0.54
%
6.65 27
212.5 11.75
12.5 38.70
37.76%
-0.58
5 %
5.75 27
215
13.2
14.2 38.56
33.64%
-0.62
5 %
4.85 27
217.5
14.9
16.8 40.67
30.55%
-0.65
5 %
4.1 27
220
16.6
17.4 37.64
25.77%
-0.71
5
5 %
3.55 27
222.5
18.3
19.9 38.75
22.96%
-0.74
5
5 %
2.95 27
225
20.3
22.4 40.25
20.70%
-0.76
5
%
2.36 27
227.5
22.4
24.4 40.48
18.10%
-0.79
5 %
1.96 27
230
24.6
26.6 41.15
16.00%
-0.81
%
Table2. Source: TD Ameritrade paperMoney - Thinkorswim trading software

4.1.
Pricing the options using BSM
The Black-Scholes model is used to calculate the theoretical price of European put and call
options, ignoring any dividends paid during the option's lifetime.

10

For pricing the options I will use Excel calculator, with a volatility (standard deviation)
calculated earlier, of 0.478902, time to expiration 27 days, current stock price of 206.66, and a riskfree rate of 2%. The results will be:
Volatility
47.89%
47.89%
47.89%
47.89%
47.89%
47.89%
47.89%
47.89%
47.89%
47.89%
47.89%
47.89%
47.89%
47.89%
47.89%
47.89%
47.89%
47.89%
47.89%

Delta
0.8229
0.7949
0.7648
0.7328
0.6993
0.6644
0.6285
0.592
0.555
0.5181
0.4814
0.4453
0.4101
0.376
0.3432
0.3119
0.2822
0.2543
0.2281

Call
value
$ 24.67
$ 22.75
$ 20.90
$ 19.14
$ 17.46
$ 15.88
$ 14.39
$ 12.99
$ 11.69
$ 10.48
$ 9.36
$ 8.33
$ 7.39
$ 6.53
$ 5.75
$ 5.05
$ 4.42
$ 3.85
$ 3.35

Difference
from market
1.33%
0.66%
-0.24%
-0.73%
-1.79%
-3.72%
-5.65%
-8.76%
-11.69%
-14.67%
-16.96%
-22.52%
-25.09%
-29.74%
-33.82%
-35.24%
-40.43%
-48.94%
-53.60%

Strike
185
187.5
190
192.5
195
197.5
200
202.5
205
207.5
210
212.5
215
217.5
220
222.5
225
227.5
230

Put value
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$

Difference
Delta
from market
2.74
15.52%
-0.1771
3.31
4.14%
-0.2051
3.96
-1.53%
-0.2352
4.69
-5.25%
-0.2672
5.52
-5.01%
-0.3007
6.43
-7.76%
-0.3356
7.43
-7.40%
-0.3715
8.53
-8.95%
-0.208
9.73
-14.70%
-0.445
11.01
-11.13%
-0.4819
12.39
-8.33%
-0.5186
13.86
-9.93%
-0.5547
15.41
-7.83%
-0.5899
17.05
-1.18%
-0.624
18.77
-7.29%
-0.6568
20.56
-3.01%
-0.6881
22.43
-0.13%
-0.7178
24.35
0.41%
-0.7457
26.35
0.94%
-0.7719
Table2. Source: Own calculations in Excel

If we are to invest using Black-Scholes model, we would buy underestimated options and sell
over evaluated options compared with the market, and assume the price will go in our direction.
According to this model the volatility (stand.dev.) must remain constant for the model to work, and the
model does not include some technical factors as liquidity, supply and demand, that can influence the
price.
From the table we can see that the market underestimate call options with strike prices above
210, and put options with strike price between 205- 212.5 and if weve buy them it seems the price
will turn in our favors. Another interpretation is that the market is expecting the price of underlying
asset to decrease and thats why the high strike price of call options is under evaluated. But only to buy
and hold a call/put option hoping to go in the right direction, based only on BSM is not a good
strategy.
5. Results
Accordingly to CAMP model and Sharp Ratio, our buy shares of TSLA Company, are
returning approximately 16% annually, which is much better than bonds and bills, but considering the
risk is fair enough.
11

Weve seen that TSLA stock have a high volatility and in this case are better to hedge our self
with options. One way to do this is o buy a put option just in case the price will decrease. Based on my
technical analysis, it seems that the price of the stock will decrease, so it is always a good choice to
insure our risk. And since weve bayed the stock is always a good idea to make some additional money
selling OTM options. And one way to do this is selling covered calls and making a profit from the
premium received. In this case we hope the stock price will stay flat or go down and the option would
expire worthless.
Formula:
-

Buy 100 shares of TSLA at the price of 206.66 (100*206.66 = 20.666$)

Sell one 215 call option with expire day of 2015-02-07 (27 days) for 5.2

Buy one 190 put option with expire day of 2015-02-07 (27 days) for 3.9

Max reward = 215 206.66 + 5.2 3.9 = 9.64 * 100 shares = 964 $ when the price of the
underlying asset is 215

Max risk = 206.66 215 + 5.2 3.9 = 7.04 * 100 shares = 704 $ when the price of the
underlying asset is 190$
In this case we pay 20.666$ for long 100 stock and receive 130$ in premium for this collar
strategy. In this scenario we have 3 posibilities:
1. TSLA shares will stay below 215 call strike price and the option will expire worthless and
we keep the premium, and outperform the stock
2. TSLA shares fall call option will expire worthless and we keep the premium and
outperform the stock, and we are protected against a decline below 190
3. TSLA shares rise above 215 the option is exercised and my upside is capped at 215 +
option premium. In this case, if the stock price goes higher than 215 plus the premium, our
collar strategy will underperform the TSLA stock.
6. Complex strategy
For this type of market my complex strategy will use a vertical spread, which involves 2
contracts, one buying option and one selling option of the same type and expiration, but a different
strike. Also for this kind of transaction I dont need to buy the stock, decreasing the amount of capital
needed.
a. For a bull market
For call options: strategy name bull call debit spread
-

Current price = 206.66

Buy a 200 call option for 13.60

Sell a 207.5 call option for 9.05

Payment 13.60 9.05 = 4.01 * 100 shares = 401 $

Max reward = (207.5 200) * 100 shares = 750 401 = 349$ for a price above 207.5

Max risk = 401 $ for a price lower than 200

- Breakeven point = 200 + 4.01 = 204.01

For put otions: strategy name bull put credit spread
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Current price = 206.66

Sell a 207.5 put option for 9.3

Buy a 195 put option for 5.25

Max reward = 9.3 5.25 = 4.05 * 100 shares = 405 $ if the price is above 207.5

Max risk = (207.5 195) *100 405$ = 845 if the price fall under 195

Breakeven point = 207.5 4.05 = 203.45

b. For a bear market

For call options: strategy name bear call credit spread
-

Current price = 206.66

Buy a 215 call option for 5.75

Sell a 205 call option for 9.70

Max reward = 9.70 5.75 = 3.95 * 100 shares = 395$ if the price is under 205

Max risk = (215 205) * 100 395 = 605 $ if the price rise above 215

- Breakeven point = 205 + 3.95 = 208.95

For put options: strategy name bear put spread
-

Current price = 206.66

Buy a 212.5 put option for 12.55

Sell a 205 put option for 8.00

Payment = 12.55 8.00 = 4.55 * 100 shares = 455$

Max reward = 212.5 205 = 7.5 * 100 shares = 750$ - 455 = 295$ if the price is under 205

Max risk = payment for the options = 455$

Breakeven point = 212.5 4.55 = 207.55

7. Conclusion:
In conclusion, I can say that there are hundreds of option strategies that can limit our risk, but
in order to take advantage of the full power of options trading, we need to have a big trading account.
One the best thing in these strategies is that we can calculate before transaction our risk/reward ratio,
and invest accordingly to our adversity towards risk. Another thing o take into account when we
decide to invest in options is our timeframe (time decay), and we can make profit only by speculating
on a short term the direction of the underlying making a good amount of return.
Usually traders use a margin account, which have a limited buy power, and bigger B/P effect
than a IRA account. But an IRA account cost from 25.000$ and beyond. For a margin account we can
still use a lot of different trading strategies, we can open positions when we want and how many we
want and the account permitted. One thing when we open an account is to take into account the broker
fees and commissions for transactions. I didnt include them into my strategies, and these costs are
affecting our profits.
Also for just investing in a portfolio of stock, we can use modern portfolio theory for assessing
our risk/reward ratio and use a strategy like diversify our portfolio. Best when we choose to invest in
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stock is to have a view in a long/medium time period. As we can saw in this analyze, TSLA stock will
offer us a much better return in long term than bonds, and bank deposit do.
Bibliography:
1.
2.
3.
4.
5.
6.
7.

http://finance.yahoo.com/
http://www.investopedia.com/
http://en.wikipedia.org/wiki/Tesla_Motors
http://www.theoptionsguide.com/
https://www.youtube.com/watch?v=BZyfXsL-maM
http://www.babypips.com/school/
TD Ameritrade paperMoney - Thinkorswim trading software

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