Eleventh-Hour Option Bulls Circle Tesla Motors, Inc. (TSLA)

Tesla Motors Inc (TSLA) is bucking the trend lower, and option bulls are placing last-minute bets

May 28, 2015 at 2:16 PM
facebook twitter linkedin


Electric vehicle maker Tesla Motors Inc (NASDAQ:TSLA) is bucking the broad-market trend lower today, up 1.5% at $251.08. What's more, options traders are rolling the dice on even more very short-term upside for the stock.

TSLA calls have changed hands at a 30% mark-up to the security's average intraday pace, and options expiring after the close tomorrow make up the 10 most active strikes. Furthermore, the stock's 30-day at-the-money implied volatility has jumped 3.5% to 31.4%, but remains near an annual low. 

Digging deeper, it looks like eleventh-hour bulls are buying to open weekly 5/29 250-, 252.50-, and 255-strike calls -- the three most popular options thus far. By doing so, the speculators expect TSLA to be sitting north of the respective strikes by expiration tomorrow night. 

Since touching an annual low of $181.40 in late March, TSLA has advanced 38.4%. The shares are now on pace to end the month atop their 10-month moving average for the first time since November. As a result of the stock's ascent, though, its 14-day Relative Strength Index (RSI) is perched at 70 -- in overbought territory, suggesting a near-term breather could be on the horizon.

Meanwhile, short sellers have been hitting the bricks amid TSLA's advance. However, while short interest fell 7.9% during the most recent reporting period, these bearish bets still account for more than a quarter of TSLA's total available float -- representing more than a week's worth of pent-up buying demand, at the equity's average pace of trading. Should TSLA continue to muscle higher, a short squeeze could add fuel to the automaker's fire.

Off the charts, Tesla Motors Inc (NASDAQ:TSLA) traders don't seemed concerned about potential competition from Ford Motor Company (NYSE:F). Meanwhile, speculators are digesting partnerships with Southern Co (NYSE:SO) and Ireland-based Gaelectric, as well as the latest chapter in CEO Elon Musk's Hyperloop adventure.

 

Minimize Risk While Maximizing Profits

There is no options strategy like this one, which consistently minimizes risk while maintaining maximum profits. Perfect for traders looking for ways to control risk, reduce losses, and increase the likelihood of success when trading calls and puts. The Schaeffer’s team has over 41 years of options trading success targeting +100% gains on every trade. Rest assured your losses are effectively limited to your initial cost at the time of making your move! Don't waste another second... join us right now before the next trade is released! 

 


 


 
Special Offers from Schaeffer's Trading Partners