Tesla Gets Biggest Option Trade Even as Nvidia Touts AI Vehicle Platform: Options Chatter
$Tesla (TSLA.US)$ attracted the biggest block trade in options so far Tuesday even as $NVIDIA (NVDA.US)$ touted its full stack autonomous vehicle platform, highlighting the immense competition in robotaxis.
An active buyer paid a premium of almost $44 million for call options that could pay off should Tesla shares climb over the next 72 days. That could signal the buyer's optimism over Tesla's future at a time when the company is already contending with the challenges from $Alphabet-A (GOOGL.US)$'s Waymo that could thwart CEO Elon Musk's promise to turn Tesla into the market leader in robotaxis.
Tesla shares climbed 37% over the past six months as investors looked past declining EV sales, hopeful that robotaxis and humanoid robots could fuel a massive growth. Nvidia's full stack autonomous vehicle platform reminded investors $Alphabet-A (GOOGL.US)$'s Waymo isn't the only competition in the market.
The rally in Tesla shares underscores "the significant degree to which TSLA shares have become increasingly divorced from the firm's rapidly declining earnings outlook," JPMorgan analysts including Ryan Brinkman wrote in a note to clients Monday. They said "extreme caution should be warranted with regard to a long position in TSLA shares."
Still, that wasn't enough to dissuade smart money from piling into Tesla options. A buyer paid a $36.55 a share premium for call options that give their holder the right to buy 1.2 million Tesla shares at $440 each in 72 days. Unless that trade was paired with another transaction, Tesla shares would need to climb above $476.55, before the contract expires for the buyer to make money from that purchase.
At current prices, those call options have a 31% profit probability for the buyer. While the potential for profit could be unlimited, should the stock price skyrocket, the maximum loss potential is at $3,417.50 for each contract, which covers 100 shares. (See the profit-loss table from the moomoo app displayed below.)
That block trade of 12,010 contracts is already 4X the open interest.
Late yesterday, Nvidia CEO said the the first passenger car featuring Alpamayo built on NVIDIA DRIVE full-stack autonomous vehicle platform will be on the roads soon in the all‑new $MERCEDES-BENZ GROUP AG (MBGAF.US)$ CLA. Huang added that AI‑defined driving is coming to the U.S. this year.
Huang also cited the growing momentum behind DRIVE Hyperion, open, modular, level‑4‑ready platform adopted by leading automakers, suppliers and robotaxi providers worldwide.
“Our vision is that, someday, every single car, every single truck will be autonomous, and we’re working toward that future,” Huang said.
Share your thoughts on Tesla and Nvidia in the comments section. Which company do you think will the dominant player in autonomous vehicles: Tesla, Nvidia or Google-parent Alphabet? Let your voice be heard by voting below. And if you want to read more options columns like this one on Strategy, or this one on TSMC, follow me here, where you can also find my earnings stories on some of the biggest stocks.
Disclaimer: Options trading entails significant risk and is not appropriate for all customers. It is important that investors read the Characteristics and Risks of Standardized Options before engaging in any options trading strategies. Opening new options positions close to or on their expiration date comes with substantial risk of losses for reasons that include potential volatility of the underlying security and limited time to expiration. Options transactions are often complex and may involve the potential of losing the entire investment in a relatively short period. Certain complex option strategies carry additional risk, including potential losses that may exceed the original investment amount. If applicable, supporting documentation for any claims will be furnished upon request.
Disclaimer: Community is offered by Moomoo Technologies Inc. and is for educational purposes only.
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Luzi Ann Santos
Moomoo Senior News and Community Manager
Former editor at Bloomberg, ex-commentary editor at Lazard. Posts aren’t investment advice. Views are just mine.
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W B : ndiva is super weak from all the shorting...![[undefined]](https://static.moomoo.com/nnq/emoji/static/image/default/default-black.png?imageMogr2/thumbnail/36x36 "undefined")
74756297 : how much is a call option for Tesla
Luzi Ann Santos OP 74756297 : the premium paid by the buyer behind that block trade was in the second image, and the price when it was written is in the second image. That's the price per share for a contract composed of 100 shares. I think if you click on that QR code, it will take you to that page in the app that has the latest price.
Slay2dudes : ok
102690465 :![[undefined]](https://static.moomoo.com/nnq/emoji/static/image/default/default-black.png?imageMogr2/thumbnail/36x36 "undefined")
72383220 74756297 : His transaction price was 36.55, but it doesn't really matter. These large option orders usually end up losing money anyway. We can observe whether this one will do the same.
181178955 : Wah-wah-wah-wah-wah-wah-wah-wah-wah-wah-wah-wah-wah-wah-wah!! Yay!