Tesla Stock Sinks on Revenue Miss, Slashed Delivery Target

Options traders are blasting the security today

Digital Content Manager
Oct 20, 2022 at 10:14 AM
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Electric vehicle (EV) giant Tesla Inc (NASDAQ:TSLA) is sinking today, last seen down 7.2% at $206.04, after its better-than-expected third-quarter earnings results came along a revenue miss. The company also slashed its full-year delivery target, attracting no less than six price-target cuts in response, including one from J.P. Morgan Securities to $150 from $153. Meanwhile, BofA Global Research and Oppenheimer both hiked their price objectives to $325 and $436, respectively.

Digging deeper, Tesla stock has been trading firmly below the 20-day moving average since late September. The shares earlier today hit a fresh one-year low of $203.77, and are looking to snap a three-day win streak. So far this year, TSLA has shed over 40%.

Options traders are already blasting the security, with 305,000 calls and 252,000 puts exchanged so far, or triple the volume that's typically seen at this point. Most popular is the October 200 put, followed by the 205 put in that series. New positions are currently being opened at the latter, indicating these traders expect more downside for TSLA by the time contracts expire at the close tomorrow. 

Puts have been growing in popularity over the last 10 weeks. At the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), the equity's 50-day put/call volume ratio of 0.94 ranks in the 85th percentile of its annual range. 

What's more, Tesla stock's Schaeffer's Volatility Scorecard (SVS) ranks at 99 out of 100. This means the equity has exceeded option traders' volatility expectations during the last year.


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