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Most Active Options Update: Tesla Motors, Inc. (TSLA)

Tesla Motors, Inc. option traders gamble on more gains through week's end

by 7/14/2014 12:52 PM
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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 this afternoon is Tesla Motors, Inc. (NASDAQ:TSLA). Falling off the list since last time was Ford Motor Company (NYSE:F).


Tesla Motors Inc is trading solidly in the green today, following reports that China is mandating 30% of its purchased government vehicles to be of the electric variety by 2016. Against this backdrop, call volume is running at a 48% mark-up to the intraday average, and the contracts are outpacing their put counterparts by a nearly 2-to-1 margin. Additionally, traders are showing increased interest in short-term bets, judging by the stock's 30-day at-the-money implied volatility, which has jumped 3.2% to 58% -- its highest perch since TSLA reported earnings in early May.

In fact, all 10 of TSLA's most active options reside in the front-month July series, which expires at this Friday's close. Taking the top two spots are the July 220 and 230 calls, which both appear to be seeing buy-to-open activity, as traders roll the dice on additional gains through week's end.

The lower-strike calls are being picked up for a volume-weighted average price (VWAP) of $5.64. Thanks to today's 3.8% pop that has the stock lingering near $226.35, these calls have not only moved into the money, but north of the at-expiration breakeven price of $225.63 (strike plus VWAP).

Meanwhile, the VWAP for the higher-strike calls is $2.68, making breakeven at this Friday's close $232.68. Gains for both sets of call buyers will accrue with each additional notch north of the breakeven prices the stock takes, while losses are limited to the initial premium paid, should Tesla Motors, Inc. (NASDAQ:TSLA) settle south of the respective strike prices at week's end.


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