Bullish Buzz Builds On Tesla Motors Inc (TSLA) Ahead of Mystery Announcement

Tesla Motors Inc (NASDAQ:TSLA) will hold a press conference at 2 p.m. ET today

Jul 17, 2015 at 10:44 AM
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Tesla Motors Inc (NASDAQ:TSLA) is up 1.3% this morning at $270.26, bringing its year-to-date advance to 22%. Helping buoy the stock is a broader rally in tech names, as well as a last-minute press conference scheduled for 2 p.m. ET. While no details have been given, rumors are swirling the firm could address specifics on the Model 3 or the Powerwall. Regardless, the anticipation has prompted a rush of call activity in the equity's options pits, with the contracts crossing at two times the average intraday pace.

Drilling down, six of TSLA's 10 most active options are calls that expire at tonight's close. It appears as if a number of speculators are eyeing more upside through session's end, with buy-to-open activity detected at the security's July 272.50 and 277.50 calls. Should the stock fail to be sitting north of either strike at tonight's close -- the goal of those initiating long calls -- the most either set of option buyers stands to lose is the initial premium paid.

Widening the sentiment scope reveals TSLA speculators have shown a penchant for long calls over puts in recent months. At the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), the security's 50-day call/put volume ratio of 1.19 ranks in the 64th annual percentile. Simply stated, calls have been bought to open over puts at a faster-than-usual clip.

Echoing this is the equity's Schaeffer's put/call open interest ratio (SOIR) of 1.02, which sits lower than 78% of all similar readings taken in the past year. In other words, traders are more call-skewed than usual toward options set to expire in three months or less.

In the front-month series, specifically, peak call open interest of 4,276 contracts is found at the July 275 strike. For those buying to open the calls, the expectation is for Tesla Motors Inc (NASDAQ:TSLA) to settle the week above $275. Meanwhile, those selling to open the calls are betting on the strike to serve as a short-term ceiling.
 

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