New Tesla Options Trading Highlights Key Investment Strategies
Investors in Tesla Inc (Symbol: TSLA) observed the beginning of trading for new options today, set to expire on April 25th. Using our YieldBoost formula, Stock Options Channel has analyzed the TSLA options chain. Two contracts stand out: one put and one call, each offering intriguing opportunities for traders.
Put Option Insights
The put contract at a $265.00 strike price currently has a bid of $23.10. Selling-to-open this put commits an investor to purchase TSLA shares at $265.00, while also collecting the premium. This effectively lowers the cost basis of the shares to $241.90 (excluding broker commissions). For those looking to buy TSLA, this method may present an appealing alternative to paying the current price of $270.40 per share.
Notably, the $265.00 strike reflects a 2% discount to the current trading price. As a result, investors face a 57% probability that this put will expire worthless. Stock Options Channel will monitor these odds over time, updating a chart on our website under the contract detail page. Should the put expire with no value, the premium collected could yield an 8.72% return on the cash commitment, equating to a 63.69% annualized return—what we term a YieldBoost.
Visual Representation of Trading History
Below is a chart showing Tesla Inc’s trailing twelve-month trading history, with the $265.00 strike price highlighted in green:
Call Option Insights
On the calls side, the $275.00 strike price currently bids at $23.05. Purchasing TSLA shares at the current level of $270.40 and selling-to-open this call would mean committing to sell the stock at $275.00. Factoring in the premium collected, this could result in a total return of 10.23% if the stock is called away at the April 25th expiration (excluding any dividends). It’s important to note that considerable upside potential exists if TSLA shares rise significantly, highlighting the necessity of reviewing both trading history and business fundamentals.
Below is a chart showing TSLA’s trailing twelve-month trading history, with the $275.00 strike price marked in red:
The $275.00 strike represents a 2% premium over the current trading price, indicating that there exists a possibility for the covered call contract to expire worthless. Should this occur, the investor retains both their shares and the collected premium. Current data suggest a 49% chance of this happening. Tracking these odds over time, Stock Options Channel will provide further insights on our website, including the trading history for this call option. If the contract expires worthless, the premium would yield an extra return of 8.52%, or 62.28% annualized—otherwise known as a YieldBoost.
Current Market Volatility
The implied volatility for the put contract stands at 67%, while the call contract shows an implied volatility of 71%. In contrast, our analysis of trailing twelve-month volatility—based on the last 250 trading day closings and the latest price of $270.40—indicates a figure of 64%. For additional options contract ideas that may be worth exploring, please visit StockOptionsChannel.com.
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Also see:
- ETFs Holding SCWX
- EVR Dividend Growth Rate
- SSNC Insider Buying
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
