Tesla (TSLA) Option Bulls Take Action After CEO Tweet

Tesla Motors Inc (TSLA) call volume exploded after CEO Elon Musk's enigmatic tweet

by Digital Content Group

Published on Mar 30, 2015 at 2:50 PM
Updated on Jun 24, 2020 at 12:49 PM

Call volume is exploding in Tesla Motors Inc's (NASDAQ:TSLA) options pits. The contracts are crossing at 13 times the pace normally seen at this point in the day, with weekly contracts in high demand. In fact, all 10 of TSLA's most popular options expire at the close this Thursday. Most popular is the weekly 4/2 190-strike call, where nearly 11,000 contracts have changed hands -- roughly twice that of the next closest option. Speculators purchasing the calls are looking for the shares to extend their rally above $190 through the close this Thursday.

Today's preference for calls runs counter to what's been seen of late in TSLA's options pits. During the past two weeks at the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), the equity's 10-day put/call volume ratio of 1.10 ranks in the 84th percentile of its annual range. This means puts have been bought to open over calls at a faster-than-usual pace.

The stimulus for today's call-buying party is a tweet. It wasn't just any tweet, though. TSLA CEO Elon Musk took to Twitter Inc (NYSE:TWTR) earlier to make an announcement:

After the tweet hit users' timelines, TSLA shares -- as well as those of SolarCity Corp (NASDAQ:SCTY) -- got a shot in the arm. Take a look at a minute-by-minute chart of TSLA today. It's not hard to figure out when Musk's tweet went live.

Minute chart of TSLA

The shares were in the red before Musk took to Twitter. At last check, however, Tesla Motors Inc (NASDAQ:TSLA) was 2.7% higher at $190.


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