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1) Never ever buy an Option (a Put or a Call) unless there is a catalyst or event.

This means you only buy an option when there is an event that will dramatically
move the price of the stock up or down. These events or catalysts can be anything
from: Earnings Announcements, Fed Meetings, Economic Releases, an Activist Hedge
Fund buying a stock to any type of corporate change, CEO, sale of a business unit,
merger or acquisition. The key is to buy the option before this event occurs, you
never ever want to buy an option after the catalyst or event. So in summary only
buy an option when there is catalyst or event that will dramatically alter the
price of the stock.

2) This Catalyst or Event must occur before the option expires. An easy example of
this is Earnings, you only want to buy an option that expires more than a week
after the earnings date. Again this means when you buy an option make sure you
leave yourself enough time so that your option does not expire before the catalyst
or event occurs.

3) The Option must be Cheap. This can be hard to measure but I like to keep it
simple, I personally dont like paying more than a $1 for any option. But if its a
high priced stock, I will only buy the option it gives me at least 25 times
leverage or more on the stock. Meaning divide the price of the stock by the actual
option price. For example if the stock of XYZ is $100 do not pay more than $4 for
the option on that stock, thats the easiest way to make sure the option is cheap.

4) Only buy options in stocks that have low volatility. This means you want to buy
options on stocks that have moved sideways of flat for months at a time. Look at a
chart if there has not been a significant uptrend or downtrend in the last 3 to 4
months, there is a good chance that the volatility in the stock is low and the
options are cheap. Also if you have options software, you can compare the stock and
its options implied volatility and underlying volatility to its historical implied
and underlying volatility. This may sound confusing but its the same premise value
investors use, they buy stocks when they are cheap in comparison to what they
historically sold for, so you want to buy options when the volatility is low or
lower than what it historically has sold for.

5) Only buy options if you can make 200% or more on the option. This is very
important, too many people buy options with no exit plan or profit target. You have
to set a goal or sell point when you buy an option and to make it worthwhile from a
risk reward standpoint. The option should have at least a 200% or more upside. Why
200%? because there is a good chance when you buy an option, you will lose the
entire value or premium of the option (or 100% of your investment in the option)
therefore to be rewarded for that risk you need to be able to make 200% or more in
that option. Simply stated only buy an option when you have at least a 2 to 1
reward to risk scenario.

Tesla battery break down

There is a few components that make up the battery cells like Graphite , copper ,
cobalt , nickel & i have not been able to find some decent info that tell's me
exactly how much of what materials goes inside these cells.. But i have some bit's
& pieces that will give a guesstimate.

450 kg (60 kWh)

Aluminium cover around the battery holding & protecting the cell's = 105 kg

It's also widely excepted that on average a battery uses 151 grams of Li to every
KWH so Li used in this battery = 9 kg of LCT
Graphite works out to be 620 grams per KWH so = 37.2 kg

So far we have 151.2 kg accounted for , leaving to ask what is the 298 kg made up
of ?

While the average cost of an anode is 30% of a battery, graphite is 50% of the
anode cost equating to 15% of the cost of a cell.
That was from AC's link on Friday arvo

For those that don't know what a cell is , it's just a small battery:

RechargeableBattery.jpg

So car manufactures take heaps of small batteries & put them together connected in
sires to make the big battery , each cell has 3 different sheets rapped around the
rod's in the middle , the more thin the sheets are , the more dense the battery
which means it can fit more power.

What are the 3 sheet's : in an electrolytic cell, one of the sheet's is the anode
and is taken to be positive charge coated with Graphite , while the cathode is
sheet is a negative charge coated with Li coated on sheet , in-between anode &
cathode sheet is a separator sheet which is made of micro-porous martial.

The sheets them self are made from copper for consumer goods to some EV's , Nickel
sheets is being used for the higher output batteries & is Telsas preferred choice.

There are few more things that make up the Battery like plastic cover , CPU , glues
ect but they are not the heavy stuff & would only add few % at best of total
battery weight & even if we give some % on all the above calculations of 10% so far
we still have around 250 kg unaccounted for.... The micro-porous sheets makes up
1/3 of each cell , add the rods coatings & covers , you would be at around 50% of
the cell , the other 50% is the Nickel sheets. That's 130 kg of Nickel at the min
per battery.

2020 target of 1 mill EV's PA would mean 127 , 920 metric tonnes of Nickel or 5.1 %
of total demand , consider Hybrid car's also use the same battery type as EV's but
Hybrids are currently oust selling EV's 3-1 , Hybrids really started taking of 5
years after they where first introduced , 2006 is where we started to see Hybrids
in almost every dealership , EV's started in 2014 so by the same metric we can see
5 years would it around 2020 where EV's will really start to make an impact .

I personally have gone over a ton of info , links , blogs ect & think EV sales will
be in the few million PA by 2020 , add spear car batteries for the few mill EV's
that dealerships must carry + Hybrid sales adds x 3 & we could be looking at Nickel
demand well over 25% of total production in the next few years which should put a
massive dent in world stockpile.

Nickel production Growth since 2016


World total ( rounded metric tonnes ) 2006 1,570,00 2014 in 2,450,000 2015 -
2,530,000
Just want to add that batter grade Graphite look's to be way more constraint then
lithium but still looking into this..

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