Tesla Touches 2019 Lows on Negative Media, Analyst Attention

TSLA put buyers have been active in the past two weeks

Deputy Editor
Mar 25, 2019 at 1:55 PM
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It's been a troubling couple of days for Tesla Inc (NASDAQ:TSLA), after the New York Times on Friday reported that the electric automaker's sales have dropped considerably since the start of the year, according to new-car registration data from the Dominion Cross-Sell Report. Elsewhere, RBC today slashed its price target on TSLA to $210 from $245, and lowered its Model 3 delivery forecast. Against this backdrop, Tesla stock is pacing for its lowest close since October -- possibly to the delight of recent options traders.

Looking at the charts, TSLA has taken a serious beating this year. The equity is down 21.6% year-to-date, and has stair-stepped lower since skimming the $380 level in mid-December. The equity is down 1.5% at $260.61, at last check, but the $250 level -- home to its October lows -- could emerge as the next line of support.

TSLA stock chart march 25

Amid Tesla's troubles on and off the charts, put options have been flying off the shelves lately. The equity showed up on Schaeffer's Senior Quantitative Analyst Rocky White's list of stocks that have attracted the highest total options volume during the past 10 days, with names highlighted in yellow new to the list. Per the chart below, 711,329 TSLA puts were exchanged during this time period, as opposed to just over 600,000 calls.

Most Active Options March 25

Plus, data from the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) indicates that long puts have rarely been more popular. TSLA currently sports a 10-day put/call volume ratio of 1.19 sits in the 90th percentile of its annual range.

Today, however, TSLA calls are slightly outnumbering puts. Roughly 94,000 calls have crossed the tape today, compared to 92,000 puts -- with total options volume in line with the average intraday pace. That being said, most active is the weekly 3/29 250-strike put, where it appears a large chunk of contracts were sold to open. If so, the sellers expect the equity to find a bottom near the $250 level through the options' March 29 expiration. 

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