Short-Term Traders Take Sides on Tesla Motors, Inc. (TSLA)

Tesla Motors Inc's (TSLA) weekly 2/27 series of options is popular today

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Published on Feb 25, 2015 at 2:23 PM
Updated on Apr 20, 2015 at 5:32 PM

Tesla Motors Inc (NASDAQ:TSLA) puts and calls are running neck and neck this afternoon. Meanwhile, the 2/27 series is dominating the stock's options pits, accounting for nine of the 10 most active strikes.

Option bulls are buying to open calls at the weekly 2/27 205 and 210 strikes, in the anticipation that TSLA will rally through expiration at Friday's close. On the flip side, more skeptical bettors are purchasing weekly 2/27 205-strike puts, banking on the automaker's shares to tank below the strike by week's end.

Puts have certainly held an advantage over calls in recent months. TSLA's 50-day put/call volume ratio across the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) is 1.08 -- in the 89th percentile of its annual range. In other words, traders have been buying to open puts over calls at an accelerated clip.

Similarly, short sellers have been wagering on downside for TSLA. Roughly one-quarter of the security's float is sold short, which would take about seven sessions to repurchase, at typical daily trading levels.

There's a reason for this mounting pessimism -- Tesla Motors Inc (NASDAQ:TSLA) has been struggling on the charts. In early September, the shares hit a record high of $291.42. Since then, they've plummeted 29.5%, currently sitting at $205.51. Today, however, TSLA has gotten a 0.7% lift, following yesterday's endorsement from Consumer Reports.


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