Tesla Motors Inc (TSLA) Rumors Drive Bullish Betting

Tesla Motors Inc (TSLA) option traders are reacting to rumors out of China

by Andrea Kramer

Published on Feb 26, 2015 at 1:04 PM
Updated on Jun 24, 2020 at 10:16 AM

After hovering around breakeven for the first hour of trading, Tesla Motors Inc (NASDAQ:TSLA) shot higher on rumors out of China that Apple Inc. (NASDAQ:AAPL) -- which is reacting to its own buzz -- intends to invest in the electric vehicle maker. As a result, TSLA options are flying off the shelves, especially on the bullish side, with traders placing last-minute bets.

The equity's 30-day at-the-money implied volatility has edged 2.5% higher to 38.2%, reflecting the growing popularity of near-term contracts. In fact, the 10 most active TSLA options expire at tomorrow's close, and calls are crossing the tape at twice the average intraday pace.

Most active is the weekly 2/27 210-strike call, which bulls are once again buying to open to bet on a move north of $210 by the end of the week. At last check, TSLA has added 1.7% to wink at $207.21, after peaking at $211.09 earlier.

Today's preference for bullish bets marks a change of pace for Tesla Motors Inc (NASDAQ:TSLA). On the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), speculators have bought to open TSLA puts over calls at a faster-than-usual clip during the past two weeks, as the equity's 10-day put/call volume ratio of 1.05 sits in the 81st percentile of its annual range.

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