New Tesla Options Provide Strategic Investing Opportunities

Investors in Tesla Inc (Symbol: TSLA) gained access to new options today, expiring on May 2nd. At Stock Options Channel, we examined the TSLA options chain and pinpointed a noteworthy put and call contract.

Put Contract Analysis

The put contract at the $235.00 strike price currently has a bid of $23.90. If an investor opts to sell-to-open that put contract, they will agree to purchase the Stock at $235.00 while simultaneously collecting the premium. This action sets the cost basis for the shares at $211.10, before broker commissions. Therefore, for investors already considering a purchase of TSLA shares, this could be a compelling alternative to the current price of $238.74 per share.

Given that the $235.00 strike price is approximately a 2% discount to the current trading price, it holds the possibility of expiring worthless. Current analytical data indicates a 58% likelihood of this outcome. Stock Options Channel will monitor these odds over time, offering updated charts on our website under the contract detail page. Should the put contract expire worthless, the premium would yield a 10.17% return on the cash commitment, or 74.24% annualized. We refer to this as YieldBoost.

Call Contract Analysis

On the calls side, the $240.00 strike price has a current bid of $23.55. If an investor purchases TSLA shares at the current level of $238.74/share and sells-to-open the call contract, they commit to selling the Stock at $240.00. Taking into account the premium collected, the total return would post a potential 10.39% if the stock is called away by the May 2nd expiration, excluding dividends and broker commissions. However, should TSLA shares significantly increase, upside potential may be limited, thus conducting a thorough review of both the trailing twelve-month trading history and business fundamentals is essential.

The trailing twelve-month trading history indicates the $240.00 strike price, illustrated below:

Notably, the $240.00 strike reflects approximately a 1% premium over the current trading price, also suggesting the possibility of the covered call expiring worthless. In this case, the investor retains both the shares of Stock and the premium earned. The latest analytics show a 45% chance of this occurring. Stock Options Channel will continue to track these odds, publishing charts and data reflecting the trading history of the option contract. If the covered call expires worthless, the premium represents a 9.86% increase in returns, or 72.01% annualized, termed as YieldBoost.

The implied volatility of the put contract is currently at 79%, while the call contract is at 73%. For context, the actual trailing twelve-month volatility is calculated to be 66%, which factors in the last 250 trading days along with today’s price of $238.74. To explore more put and call option ideas, visit StockOptionsChannel.com.

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The views and opinions expressed herein are those of the author and do not necessarily reflect those of Nasdaq, Inc.