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Most Active Options Update: Tesla Motors Inc (TSLA)

Tesla Motors Inc is the target of weekly option traders today

by 5/28/2014 2:09 PM
Stocks quoted in this article:

The 20 stocks listed in the table below have attracted the highest total options volume during the past 10 trading days. Names highlighted are new to the list since the last time the study was run, and data is courtesy of Schaeffer's Senior Quantitative Analyst Rocky White. One name of notable interest among options traders this afternoon is Tesla Motors Inc (NASDAQ:TSLA).

Most

Tesla Motors Inc option bulls have been notably active of late, per data from the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX). Specifically, the stock's 10-day call/put volume ratio of 1.27 on these major exchanges ranks in the 75th percentile of its annual range, meaning long calls have been initiated over puts at a faster-than-usual clip in recent weeks.

In today's session, calls have a roughly 4,000-contract lead over their put counterparts. Meanwhile, all 10 of the most active options expire either this Friday or next, sending TSLA's 30-day at-the-money implied volatility (IV) up 3.4% at 42.7%.

The most sought-after option is the weekly 5/30 210 strike, where 4,117 contracts have been exchanged, a healthy portion on the ask side, pointing to buyer-driven activity. What's more, IV has jumped 3.8 percentage points, and volume outstrips open interest, pointing to the initiation of new positions. Based on TSLA's current price of $212.16, these calls are in the money. However, in order for the traders to profit, the equity must be sitting north of breakeven at $212.61 -- which is the strike plus the volume-weighted average price of $2.61 -- at week's end.

Elsewhere, receiving notable attention on the put side is the weekly 5/30 207.50 strike, where 3,825 contracts are on the tape. This out-of-the-money put is being traded at both the bid and the ask price, IV is 4.9 percentage points higher, and volume exceeds current levels of open interest. Summing it all up, it appears this option may be seeing a mix of sell- and buy-to-open activity, respectively. By selling to open the puts, speculators are betting on the stock to maintain its foothold north of the strike price over the next two-plus sessions. Conversely, those buying to open the puts expect TSLA to retreat south of $207.50 by Friday's close.

Technically speaking, despite the steep sell-off in momentum names in early spring, Tesla Motors Inc (NASDAQ:TSLA) is still sporting a year-to-date advance of 41%. Meanwhile, on the fundamental front, the electric car maker will host its annual shareholder meeting next Tuesday.

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