Put Players Target Tesla Motors Inc (TSLA) as BMW Talks Fizzle

Tesla Motors Inc short-term put players continue to be active

by Karee Venema

Published on Dec 1, 2014 at 1:20 PM
Updated on Apr 20, 2015 at 5:32 PM

Short-term put players have set their sights on Tesla Motors Inc (NASDAQ:TSLA), as evidenced by the equity's Schaeffer's put/call open interest ratio (SOIR) of 1.60, which ranks in the 98th percentile of its annual range. Simply stated, near-term traders have been more put-heavy on TSLA just 2% of the time within the past year.

It's a similar set-up in today's session, with puts trading at 1.5 times the typical intraday pace. Plus, the equity's 30-day at-the-money implied volatility (IV) has surged 14.5% to 36.5%, signaling elevated demand for TSLA's short-term contracts.

The stock's two most active options are the weekly 12/5 230- and 235-strike puts, where a collective 8,320 contracts have changed hands. A healthy portion of these have done so on the ask side, IV is higher, and volume outstrips open interest -- all signs of buy-to-open activity.

By initiating the long puts, the speculators are betting on the equity to finish the week -- when the series expires -- below the respective strike prices. Delta on the higher-strike put is negative 0.56, implying a 56% chance of an in-the-money finish at Friday's close. Meanwhile, delta on the lower-strike put is docked at negative 0.39.

On the charts, TSLA has had a standout year, with the shares up almost 55%. Today, however, the equity has given back nearly 5% to linger near $232.74, after BMW put the kibosh on last week's rumors that it was interested in collaborating with Tesla Motors Inc (NASDAQ:TSLA).


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