GAVIN McMASTER 01:45 PM ET 07/21/2020
Tesla Stock Earnings On Tap July 22
Tesla (TSLA) put in a stellar move currently this past year. The question is, can it keep going? Remember that a couple of weeks ago, we took a look at a bullish choice trade on Tesla stock that is working quite well.
Tesla stock – Earnings season is ramping up and often choice activity ahead of profits deserves looking at. Heres some interesting activity on the choices for Tesla stock.
There are always two parties to an alternatives agreement, and someone was willing to sell those calls to the purchaser.
One thing caught my eye the other day which was some unusual choice activity in the Tesla call.
The upcoming earnings report due after the marketplace close on July 22 puts much more focus on Tesla stock.
The premium seller gets to keep that entire amount collected if Tesla stock stays listed below the 3,500 strike at the July 24 expiration.
Possibly the seller was someone wanting to gather the premium by selling naked calls (a risky strategy). The calls traded around $1.20 and 6,244 agreements would have cost the purchaser $749,280.
Now, Tesla stock closed the other day at 1,643. So it was really surprising to me when I saw numerous calls being traded on a strike cost that is 113% out of the money.
What Does It Mean?
We will never understand if that was part of a larger method. Plainly somebody thinks TSLA stock is going to rocket higher after the revenues statement on July 22.
The other day, there were 6,244 calls traded on Tesla stock at the 3,500 strike expiring July 24. Yes, you read that.
It seems unlikely that Tesla stock will rally above 3,500, but you never know!
Either method, Tesla stock incomes are sure to offer some fireworks this quarter and Ill be seeing intently.
The concern is, can it keep going? From Invester.com: This post is for education functions just and not a trade suggestion. Remember to constantly do your own due diligence and consult your monetary advisor prior to making any financial investment decisions. Gavin McMaster has a Masters in Applied Finance and Investment. He specializes in earnings trading using alternatives, is extremely conservative in his design and believes patience in waiting for the finest setups is the essential to successful trading.
I wonder who will win on this trade, the call purchaser or the call seller. What do you think?
From Invester.com: This post is for education functions just and not a trade suggestion. He specializes in income trading using alternatives, is really conservative in his style and believes patience in waiting for the best setups is the essential to effective trading.
This short article was initially published here.