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Most Active Options Update: Tesla Motors Inc (TSLA)

Tesla Motors Inc is targeted by option bears just ahead of weekly expiration

by 8/21/2014 2:22 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 is Tesla Motors Inc (NASDAQ:TSLA), as option bears bet on the stock to slide into the weekend.

Most Active Options Table

Specifically, the most active Tesla Motors Inc option this afternoon is the weekly 8/22 255-strike put, which is set to expire at tomorrow's close. Roughly 7,600 contracts have changed hands at this strike, outstripping open interest of 4,998 contracts. A healthy portion of these puts have traded at the ask price, implied volatility rose with some of the largest block trades, and the International Securities Exchange (ISE) confirms some buy-to-open activity at this strike.

With TSLA fractionally lower at $254.50, today's last-minute put buyers are betting on the stock to stage a rapid decline. Based on the option's volume-weighted average price (VWAP) of $2.07, in fact, these weekly put buyers won't begin to see profits unless TSLA falls below $252.93 (strike less VWAP) by tomorrow's close -- a drop of roughly 1.6 points, or 0.6%, from the equity's current perch.

The weekly 8/22 255-strike put is just barely in the money, with a little more than one day's worth of time value, and the options market is pricing in an approximately 50-50 chance of an in-the-money finish. The delta on the option is currently negative 0.52, implying a 52% probability TSLA will be trading south of $255 per share at Friday's close.

Short-term bears seem to think TSLA is due for a downturn, with the stock fresh off Monday's all-time high of $267.26. However, the stock still has some supporters in its corner. Late Wednesday, CLSA initiated Tesla Motors Inc (NASDAQ:TSLA) at "outperform," with the analysts noting, "... we see moderate upside potential over the next 12 months."


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