Tesla Options Hint at More Trouble Ahead with Bets around $200

On Friday (20 Oct) we saw all three major indexes ending the week in the red. The fighting between Israel and Hamas has intensified and kept indexes under pressure.

Over the weekend we have seen more fighting. Moreover, with 10-year Treasury yield going up nearing 5% causing a surge in borrowing costs has also keep pressure on the markets.

As the higher yields were tightening financial conditions, Fed may hold interest rates during the 01 November meeting.

In this article, I would be looking at how Tesla option are showing up and what does it implies for the stock move this week.

The most traded calls are contracts of $260 strike price that expire on October 20th. The total volume reaches 59,595 with an open interest of 35,175. The most traded puts are contracts of a $240 strike price that expires on October 20th; the volume is 60,364 contracts with an open interest of 32,160.

After Tesla share fell by more than 9% on Thursday (19 Oct), it continued the downward trend on Friday as Wall Street question its high valuation. We saw many major banks start to lower their target prices for Tesla after its poor earnings performance, investors pessimism also start to step in,

Some market analysts think that Tesla might need to lower its prices further in order to reach its annual delivery target, as there is an overall slowdown in EV demand.

TSLA has a total open interest of 366,637 contracts and a put-call ratio of 0.70 for options expiring Oct 27, 2023 (5 days).

A put contract with a Friday expiration and a strike price of $200 was the most-traded contract for Tesla on Friday (20 Oct) .

This bearish option in Tesla might implies that we could be looking at least another 3-5% to fall this week.

Based on what we have seen in the option data presented, Tesla might still be going down for another 3-5% this week.

But if we take a look at the call contract, we might see a glimpse of investors confidence with strike price at $227.5 most traded on Friday (20 Oct).

I will be monitoring how Tesla would be trading as I want to load more shares for longer term potential for this electric car maker.

Appreciate if you could share your thoughts in the comment section whether you think Tesla would be going for another 3-5% fall this week, or it will make a short recovery?

Disclaimer: The analysis and result presented does not recommend or suggest any investing in the said stock. This is purely for Analysis.