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Options Radar: Tesla Motors Inc (TSLA), Kandi Technologies, and Veeva

Reviewing notable options activity on Tesla Motors Inc, Kandi Technologies Group Inc, and Veeva Systems Inc

by 8/29/2014 12:38 PM
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Three names seeing notable options activity today are electric car makers Tesla Motors Inc (NASDAQ:TSLA) and Kandi Technologies Group Inc (NASDAQ:KNDI), and cloud concern Veeva Systems Inc (NYSE:VEEV). Here's a look at how today's options traders have been placing their bets on TSLA, KNDI, and VEEV.

  • TSLA hit the $272.00 mark earlier -- its highest perch on record -- after inking a deal with China Unicom (Hong Kong) Limited (ADR) (NYSE:CHU) to build 400 charging stations throughout the mainland. At last check, though, the shares were sitting 2.5% higher at $270.53, bringing their year-to-date lead to a brow-raising 80%. Today's rally has sparked a rush of activity among call players, with volume running at two times what's typically seen at this point in the day. Eleventh-hour traders are buying to open the equity's weekly 8/29 270-strike call, as they gamble on even more upside for TSLA by tonight's close.

  • It's been a volatile week for KNDI, which is off 6% today, after the company priced an offering to institutional investors at $17.20 per share -- a discount to the stock's current perch at $17.98. As such, the equity has been placed on the short-sale restricted list, sending option volume soaring to almost four times the intraday average. Most active is the stock's October 17 call, which is being bought to open for a volume-weighted average price (VWAP) of $2.21. In order for these calls to be profitable at the close on Friday, Oct. 17 -- when the back-month options expire -- KNDI needs to rebound back above breakeven at $19.21 (strike plus VWAP).

  • VEEV call volume has jumped to 22 times the expected intraday amount, as traders react to the stock's 16.4% post-earnings pop to trade at $29.15. Adding to the bullish buzz is a round of price-target hikes from J.P. Morgan Securities, Canaccord Genuity, and Deutsche Bank. Despite today's accelerated option activity, VEEV's 30-day at-the-money implied volatility has plunged 16.9% to 41.3% -- after earlier tagging a 52-week low -- in the wake of last night's scheduled event. The stock's December 30 call has received the most attention, and according to data from the International Securities Exchange (ISE), there is a mix of buy- and sell-to-open activity happening here.


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