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Option Witch | Tesla Stock Is Down but Still Treading Water - Ideal for Put Option Short Sellers

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Tesla Inc stock is off 24% since early July and fell further after the July 23 release of its Q2 results. It has been treading water lately below $200 with high put option premiums. That is ideal for...

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TotoPangan
·08-13
the power of sell put options
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That is ideal for...</p>\n\n<a href=\"https://www.barchart.com/story/news/27973890/tesla-stock-is-down-but-still-treading-water-ideal-for-put-option-short-sellers-as-an-income-play\">Source Link</a>\n\n</div>\n","source":"barchart_highlight","html":"<!DOCTYPE html>\n<html>\n<head>\n<meta http-equiv=\"Content-Type\" content=\"text/html; charset=utf-8\" />\n<meta name=\"viewport\" content=\"width=device-width,initial-scale=1.0,minimum-scale=1.0,maximum-scale=1.0,user-scalable=no\"/>\n<meta name=\"format-detection\" content=\"telephone=no,email=no,address=no\" />\n<title>Option Witch | Tesla Stock Is Down but Still Treading Water - Ideal for Put Option Short Sellers</title>\n<style type=\"text/css\">\na,abbr,acronym,address,applet,article,aside,audio,b,big,blockquote,body,canvas,caption,center,cite,code,dd,del,details,dfn,div,dl,dt,\nem,embed,fieldset,figcaption,figure,footer,form,h1,h2,h3,h4,h5,h6,header,hgroup,html,i,iframe,img,ins,kbd,label,legend,li,mark,menu,nav,\nobject,ol,output,p,pre,q,ruby,s,samp,section,small,span,strike,strong,sub,summary,sup,table,tbody,td,tfoot,th,thead,time,tr,tt,u,ul,var,video{ font:inherit;margin:0;padding:0;vertical-align:baseline;border:0 }\nbody{ font-size:16px; line-height:1.5; color:#999; background:transparent; }\n.wrapper{ overflow:hidden;word-break:break-all;padding:10px; }\nh1,h2{ font-weight:normal; line-height:1.35; margin-bottom:.6em; }\nh3,h4,h5,h6{ line-height:1.35; margin-bottom:1em; }\nh1{ font-size:24px; }\nh2{ font-size:20px; }\nh3{ font-size:18px; }\nh4{ font-size:16px; }\nh5{ font-size:14px; }\nh6{ font-size:12px; }\np,ul,ol,blockquote,dl,table{ margin:1.2em 0; }\nul,ol{ margin-left:2em; }\nul{ list-style:disc; }\nol{ list-style:decimal; }\nli,li p{ margin:10px 0;}\nimg{ max-width:100%;display:block;margin:0 auto 1em; }\nblockquote{ color:#B5B2B1; border-left:3px solid #aaa; padding:1em; }\nstrong,b{font-weight:bold;}\nem,i{font-style:italic;}\ntable{ width:100%;border-collapse:collapse;border-spacing:1px;margin:1em 0;font-size:.9em; }\nth,td{ padding:5px;text-align:left;border:1px solid #aaa; }\nth{ font-weight:bold;background:#5d5d5d; }\n.symbol-link{font-weight:bold;}\n/* header{ border-bottom:1px solid #494756; } */\n.title{ margin:0 0 8px;line-height:1.3;color:#ddd; }\n.meta {color:#5e5c6d;font-size:13px;margin:0 0 .5em; }\na{text-decoration:none; color:#2a4b87;}\n.meta .head { display: inline-block; overflow: hidden}\n.head .h-thumb { width: 30px; height: 30px; margin: 0; padding: 0; border-radius: 50%; float: left;}\n.head .h-content { margin: 0; padding: 0 0 0 9px; float: left;}\n.head .h-name {font-size: 13px; color: #eee; margin: 0;}\n.head .h-time {font-size: 11px; color: #7E829C; margin: 0;line-height: 11px;}\n.small {font-size: 12.5px; display: inline-block; transform: scale(0.9); -webkit-transform: scale(0.9); transform-origin: left; -webkit-transform-origin: left;}\n.smaller {font-size: 12.5px; display: inline-block; transform: scale(0.8); -webkit-transform: scale(0.8); transform-origin: left; -webkit-transform-origin: left;}\n.bt-text {font-size: 12px;margin: 1.5em 0 0 0}\n.bt-text p {margin: 0}\n</style>\n</head>\n<body>\n<div class=\"wrapper\">\n<header>\n<h2 class=\"title\">\nOption Witch | Tesla Stock Is Down but Still Treading Water - Ideal for Put Option Short Sellers\n</h2>\n\n<h4 class=\"meta\">\n\n\n2024-08-13 14:30 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://www.barchart.com/story/news/27973890/tesla-stock-is-down-but-still-treading-water-ideal-for-put-option-short-sellers-as-an-income-play><strong>Barchart</strong></a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\n<p>Tesla Inc  stock is off 24% since early July and fell further after the July 23 release of its Q2 results. It has been treading water lately below $200 with high put option premiums. That is ideal for...</p>\n\n<a href=\"https://www.barchart.com/story/news/27973890/tesla-stock-is-down-but-still-treading-water-ideal-for-put-option-short-sellers-as-an-income-play\">Source Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","isBrief":false,"type":0,"news_type":1,"symbol":"SG9999015945.SGD","symbol_name":"LionGlobal Disruptive Innovation Fund A SGD","start_time":0,"source_url":"https://www.barchart.com/story/news/27973890/tesla-stock-is-down-but-still-treading-water-ideal-for-put-option-short-sellers-as-an-income-play","article_id":"2459931961","we_media_id":null,"thumbnails":[],"rights":null,"url":"https://stock-news.laohu8.com/highlight/detail?id=2459931961","pubTimestamp":1723530600,"sourceInfo":{"source_id":"barchart_highlight","name":"Barchart"},"weMediaInfo":null,"summary":"Tesla Inc  stock is off 24% since early July and fell further after the July 23 release of its Q2 results. It has been treading water lately below $200 with high put option premiums. That is ideal for short sellers as an income play - selling short out-of-the-money  puts in nearby expiry periods.In mid-day trading on Monday, Aug. 12, TSLA is at $197.38, down 23.4% from $257.86 on July 10. However, since the end of June 30  it has stayed flat at just under $200 per share.Nevertheless, the stock's put option premiums are very high. Short sellers can take advantage of this by shorting them in near-term expiry periods.That provides extra income, especially for existing shareholders who also could gain from any increase in the stock price. One reason is that Tesla stock looks cheap here.For example, look at the Sept. 6 put option expiration period, which is just over 3 weeks away . It shows that the deep out-of-the-money  puts still have high premiums. 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It has been treading water lately below $200 with high put option premiums. That is ideal for short sellers as an income play - selling short out-of-the-money (OTM) puts in nearby expiry periods.As of Monday, Aug. 12, TSLA is down 23.4% from $257.86 on July 10. However, since the end of June 30 (i.e., the whole of Q3) it has stayed flat at just under $200 per share.Nevertheless, the stock's put option premiums are very high. Short sellers can take advantage of this by shorting them in near-term expiry periods. That provides extra income, especially for existing shareholders who also could gain from any increase in the stock price. One reason is that Tesla stock looks cheap here.Tesla Stock Could Be UndervaluedI discussed this in a recent article on Tesla. My July 24 Barchart article showed that despite the company's poor quarterly results, TSLA stock could be cheap.For example, the market has been upset that despite a 2% YoY rise in overall revenue, its automotive sales were down 7% Y/Y. However, its operating income was still positive and it generated $1.34 billion in free cash flow even after $2.27 billion in capex spending.That represented a 5.26% FCF margin (i.e., $1.34b/$25.5 billion in sales). That augurs well for the company going forward.For example, analysts forecast sales will rise to $116.23 billion next year, up over 16.8% from $99.49 billion forecast for 2024. Therefore, if Tesla can keep making high FCF margins, its value is likely to rise.Target Price EstimateLet's assume that with higher sales its FCF margin rises to 7.5%. Its free cash flow will hit $8.72 billion (i.e., 0.75 x $116.23 billion in forecast 2025 sales).As a result, using a 1.0% FCF yield metric, its market cap could rise to $872 billion (i.e., $8.72/0.01). That is 37.9% over its present $632.3 billion market value. In other words, TSLA stock could be worth $272.19 per share (i.e., $197.38 x 1.379).But just be conservative, let's say its FCF margin rises to just 6% and sales rise just 15% to $114.4 billion next year. That implies that its FCF will be $6.865 billion (i.e., 0.06 x $114.4b = $6.865b).Therefore, its market cap, using a 1.0% FCF yield metric, will be $686.5 billion. That is still 8.56% over today's $632.3 billion market value. That results in a price target of $214.28 per share.In other words, our price target range is between $214 and $272 per share, or $243 per share on average. That is is still 23% over today's price.One way to play this is to sell short out-of-the-money (OTM) put options, given their high premiums.Shorting OTM PutsFor example, look at the Sept. 6 put option expiration period, which is just over 3 weeks away (25 days). It shows that the deep out-of-the-money (OTM) puts still have high premiums. That makes them ideal as income plays.The $175 strike price put option now trades for $2.80 on the bid side. This strike price is well over 10% below today's stock price. The short seller can make an immediate yield of 1.60% (i.e., $2.82/$175.00).$TSLA 20240906 175.0 PUT$   TSLA puts expiring Sept. 6 - Barchart - As of Aug. 12That means that an investor who secures $17,500 with their brokerage firm can enter an order to “Sell to Open” 1 contract at $175 and immediately receive $280 in their account. That works would to an investment return of 1.60%.As long as the stock stays over $175.00 the investor will not be obligated to 100 shares per contract shorted at the $175.00 strike price.","kind":null,"is_publish_news":true,"is_publish_highlight":true,"is_publish_live":false,"is_publish_wemedia":null,"editions":null,"column":"","sentiment":"1","news_tag":"","news_rank":0,"symbols":[],"gpt_button":0},"commentList":[{"id":337972797177936,"gmtCreate":1723531906780,"gmtModify":1723531910437,"author":{"id":"3574071010805586","authorId":"3574071010805586","name":"TotoPangan","avatar":"https://static.tigerbbs.com/9816579d9ab825a195bac875bd6e23e8","vip":1,"crmLevel":2,"crmLevelSwitch":1,"authorIdStr":"3574071010805586","idStr":"3574071010805586"},"htmlText":"the power of sell put options","listText":"the power of sell put options","text":"the power of sell put options","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":2,"commentSize":0,"repostSize":0,"link":"https://ttm.financial/post/337972797177936","repostId":2459931961,"repostType":2,"repost":{"id":"2459931961","pubTimestamp":1723530600,"share":"https://ttm.financial/m/news/2459931961?lang=&edition=fundamental","pubTime":"2024-08-13 14:30","market":"us","language":"en","title":"Option Witch | Tesla Stock Is Down but Still Treading Water - Ideal for Put Option Short Sellers","url":"https://stock-news.laohu8.com/highlight/detail?id=2459931961","media":"Barchart","summary":"Tesla Inc  stock is off 24% since early July and fell further after the July 23 release of its Q2 results. It has been treading water lately below $200 with high put option premiums. That is ideal for short sellers as an income play - selling short out-of-the-money  puts in nearby expiry periods.In mid-day trading on Monday, Aug. 12, TSLA is at $197.38, down 23.4% from $257.86 on July 10. However, since the end of June 30  it has stayed flat at just under $200 per share.Nevertheless, the stock's put option premiums are very high. Short sellers can take advantage of this by shorting them in near-term expiry periods.That provides extra income, especially for existing shareholders who also could gain from any increase in the stock price. One reason is that Tesla stock looks cheap here.For example, look at the Sept. 6 put option expiration period, which is just over 3 weeks away . It shows that the deep out-of-the-money  puts still have high premiums. That makes them ideal as income plays.","content":"<html><head></head><body><p><a href=\"https://laohu8.com/S/TSLA\">Tesla Inc </a> stock is off 24% since early July and fell further after the July 23 release of its Q2 results. It has been treading water lately below $200 with high put option premiums. That is ideal for short sellers as an income play - selling short out-of-the-money (OTM) puts in nearby expiry periods.</p><p>As of Monday, Aug. 12, TSLA is down 23.4% from $257.86 on July 10. However, since the end of June 30 (i.e., the whole of Q3) it has stayed flat at just under $200 per share.</p><p>Nevertheless, the stock&#39;s put option premiums are very high. Short sellers can take advantage of this by shorting them in near-term expiry periods. </p><p>That provides extra income, especially for existing shareholders who also could gain from any increase in the stock price. One reason is that Tesla stock looks cheap here.</p><h3 id=\"id_4172524088\">Tesla Stock Could Be Undervalued</h3><p>I discussed this in a recent article on Tesla. My July 24 Barchart article showed that despite the company&#39;s poor quarterly results, TSLA stock could be cheap.</p><p>For example, the market has been upset that despite a 2% YoY rise in overall revenue, its automotive sales were down 7% Y/Y. However, its operating income was still positive and it generated $1.34 billion in free cash flow even after $2.27 billion in capex spending.</p><p>That represented a 5.26% FCF margin (i.e., $1.34b/$25.5 billion in sales). That augurs well for the company going forward.</p><p>For example, analysts forecast sales will rise to $116.23 billion next year, up over 16.8% from $99.49 billion forecast for 2024. Therefore, if Tesla can keep making high FCF margins, its value is likely to rise.</p><h3 id=\"id_659592689\">Target Price Estimate</h3><p>Let&#39;s assume that with higher sales its FCF margin rises to 7.5%. Its free cash flow will hit $8.72 billion (i.e., 0.75 x $116.23 billion in forecast 2025 sales).</p><p>As a result, using a 1.0% FCF yield metric, its market cap could rise to $872 billion (i.e., $8.72/0.01). That is 37.9% over its present $632.3 billion market value. In other words, TSLA stock could be worth <strong>$272.19</strong> per share (i.e., $197.38 x 1.379).</p><p>But just be conservative, let&#39;s say its FCF margin rises to just 6% and sales rise just 15% to $114.4 billion next year. That implies that its FCF will be $6.865 billion (i.e., 0.06 x $114.4b = $6.865b).</p><p>Therefore, its market cap, using a 1.0% FCF yield metric, will be $686.5 billion. That is still 8.56% over today&#39;s $632.3 billion market value. That results in a price target of <strong>$214.28</strong> per share.</p><p>In other words, our price target range is between $214 and $272 per share, or <strong>$243</strong> per share on average. That is is still 23% over today&#39;s price.</p><p>One way to play this is to sell short out-of-the-money (OTM) put options, given their high premiums.</p><h3 id=\"id_2994098906\">Shorting OTM Puts</h3><p>For example, look at the Sept. 6 put option expiration period, which is just over 3 weeks away (25 days). It shows that the deep out-of-the-money (OTM) puts still have high premiums. That makes them ideal as income plays.</p><p>The $175 strike price put option now trades for $2.80 on the bid side. This strike price is well over 10% below today&#39;s stock price. The short seller can make an immediate yield of 1.60% (i.e., $2.82/$175.00).</p><p><a href=\"https://ttm.financial/OPT/TSLA%2020240906%20175.0%20PUT\" title=\"$TSLA 20240906 175.0 PUT$\" target=\"_blank\">$TSLA 20240906 175.0 PUT$</a>  </p><p class=\"t-img-caption\"><img src=\"https://community-static.tradeup.com/news/c3ef93055a86768186c1206a62537452\" tg-width=\"1115\" tg-height=\"524\"/></p><p> TSLA puts expiring Sept. 6 - Barchart - As of Aug. 12</p><p>That means that an investor who secures $17,500 with their brokerage firm can enter an order to “Sell to Open” 1 contract at $175 and immediately receive $280 in their account. That works would to an investment return of 1.60%.</p><p>As long as the stock stays over $175.00 the investor will not be obligated to 100 shares per contract shorted at the $175.00 strike price.</p></body></html>","source":"barchart_highlight","collect":0,"html":"<!DOCTYPE html>\n<html>\n<head>\n<meta http-equiv=\"Content-Type\" content=\"text/html; charset=utf-8\" />\n<meta name=\"viewport\" content=\"width=device-width,initial-scale=1.0,minimum-scale=1.0,maximum-scale=1.0,user-scalable=no\"/>\n<meta name=\"format-detection\" content=\"telephone=no,email=no,address=no\" />\n<title>Option Witch | Tesla Stock Is Down but Still Treading Water - Ideal for Put Option Short Sellers</title>\n<style type=\"text/css\">\na,abbr,acronym,address,applet,article,aside,audio,b,big,blockquote,body,canvas,caption,center,cite,code,dd,del,details,dfn,div,dl,dt,\nem,embed,fieldset,figcaption,figure,footer,form,h1,h2,h3,h4,h5,h6,header,hgroup,html,i,iframe,img,ins,kbd,label,legend,li,mark,menu,nav,\nobject,ol,output,p,pre,q,ruby,s,samp,section,small,span,strike,strong,sub,summary,sup,table,tbody,td,tfoot,th,thead,time,tr,tt,u,ul,var,video{ font:inherit;margin:0;padding:0;vertical-align:baseline;border:0 }\nbody{ font-size:16px; line-height:1.5; color:#999; background:transparent; }\n.wrapper{ overflow:hidden;word-break:break-all;padding:10px; }\nh1,h2{ font-weight:normal; line-height:1.35; margin-bottom:.6em; }\nh3,h4,h5,h6{ line-height:1.35; margin-bottom:1em; }\nh1{ font-size:24px; }\nh2{ font-size:20px; }\nh3{ font-size:18px; }\nh4{ font-size:16px; }\nh5{ font-size:14px; }\nh6{ font-size:12px; }\np,ul,ol,blockquote,dl,table{ margin:1.2em 0; }\nul,ol{ margin-left:2em; }\nul{ list-style:disc; }\nol{ list-style:decimal; }\nli,li p{ margin:10px 0;}\nimg{ max-width:100%;display:block;margin:0 auto 1em; }\nblockquote{ color:#B5B2B1; border-left:3px solid #aaa; padding:1em; }\nstrong,b{font-weight:bold;}\nem,i{font-style:italic;}\ntable{ width:100%;border-collapse:collapse;border-spacing:1px;margin:1em 0;font-size:.9em; }\nth,td{ padding:5px;text-align:left;border:1px solid #aaa; }\nth{ font-weight:bold;background:#5d5d5d; }\n.symbol-link{font-weight:bold;}\n/* header{ border-bottom:1px solid #494756; } */\n.title{ margin:0 0 8px;line-height:1.3;color:#ddd; }\n.meta {color:#5e5c6d;font-size:13px;margin:0 0 .5em; }\na{text-decoration:none; color:#2a4b87;}\n.meta .head { display: inline-block; overflow: hidden}\n.head .h-thumb { width: 30px; height: 30px; margin: 0; padding: 0; border-radius: 50%; float: left;}\n.head .h-content { margin: 0; padding: 0 0 0 9px; float: left;}\n.head .h-name {font-size: 13px; color: #eee; margin: 0;}\n.head .h-time {font-size: 11px; color: #7E829C; margin: 0;line-height: 11px;}\n.small {font-size: 12.5px; display: inline-block; transform: scale(0.9); -webkit-transform: scale(0.9); transform-origin: left; -webkit-transform-origin: left;}\n.smaller {font-size: 12.5px; display: inline-block; transform: scale(0.8); -webkit-transform: scale(0.8); transform-origin: left; -webkit-transform-origin: left;}\n.bt-text {font-size: 12px;margin: 1.5em 0 0 0}\n.bt-text p {margin: 0}\n</style>\n</head>\n<body>\n<div class=\"wrapper\">\n<header>\n<h2 class=\"title\">\nOption Witch | Tesla Stock Is Down but Still Treading Water - Ideal for Put Option Short Sellers\n</h2>\n\n<h4 class=\"meta\">\n\n\n2024-08-13 14:30 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://www.barchart.com/story/news/27973890/tesla-stock-is-down-but-still-treading-water-ideal-for-put-option-short-sellers-as-an-income-play><strong>Barchart</strong></a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\n<p>Tesla Inc  stock is off 24% since early July and fell further after the July 23 release of its Q2 results. It has been treading water lately below $200 with high put option premiums. That is ideal for...</p>\n\n<a href=\"https://www.barchart.com/story/news/27973890/tesla-stock-is-down-but-still-treading-water-ideal-for-put-option-short-sellers-as-an-income-play\">Web Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","type":0,"thumbnail":"","relate_stocks":{"SG9999015945.SGD":"LionGlobal Disruptive Innovation Fund A SGD","LU2756315664.SGD":"ALLIANZ INCOME AND GROWTH \"AMI\" (SGDHDG) INC","BK4099":"汽车制造商","BK4511":"特斯拉概念","SG9999015986.USD":"LIONGLOBAL DISRUPTIVE INNOVATION \"I\" (USD) ACC","LU0823414478.USD":"法巴经典能源转换基金","LU0466842654.USD":"HSBC ISLAMIC GLOBAL EQUITY INDEX \"A\" (USD) ACC","SG9999015978.USD":"利安颠覆性创新基金A","LU0097036916.USD":"贝莱德美国增长A2 USD","LU0689472784.USD":"安联收益及增长基金Cl AM AT Acc","LU2326559502.SGD":"Natixis Loomis Sayles US Growth Equity P/A SGD-H","LU2087621335.USD":"ALLSPRING GLOBAL FACTOR ENHANCED EQUITY \"A\" (USD) ACC","LU1852331112.SGD":"Blackrock World Technology Fund A2 SGD-H","LU0198837287.USD":"UBS (LUX) EQUITY SICAV - USA GROWTH \"P\" (USD) ACC","BK4581":"高盛持仓","LU1861215975.USD":"贝莱德新一代科技基金 A2","BK4592":"伊斯兰概念","LU1548497426.USD":"安联环球人工智能AT Acc","LU1861220033.SGD":"Blackrock Next Generation Technology A2 SGD-H","TSLA":"特斯拉","LU1551013425.SGD":"Allianz Income and Growth Cl AMg2 DIS H2-SGD","TSLL":"Direxion Daily TSLA Bull 2X Shares","LU2602419157.SGD":"HSBC ISLAMIC GLOBAL EQUITY INDEX \"AC\" (SGD) ACC","BK4585":"ETF&股票定投概念","BK4555":"新能源车","BK4533":"AQR资本管理(全球第二大对冲基金)","LU2756315318.SGD":"ALLIANZ INCOME AND GROWTH \"AMG\" (SGDHDG) INC A","LU0348723411.USD":"ALLIANZ GLOBAL HI-TECH GROWTH \"A\" (USD) INC","LU1720051108.HKD":"ALLIANZ GLOBAL ARTIFICIAL INTELLIGENCE \"AT\" (HKD) ACC","LU0943347566.SGD":"安联收益及增长平衡基金AM H2-SGD","LU0234570918.USD":"高盛全球核心股票组合Acc Close","SG9999015952.SGD":"LIONGLOBAL DISRUPTIVE INNOVATION \"I\" (SGD) ACC","LU2357305700.SGD":"Allianz Global Artificial Intelligence ET H2-SGD","LU1429558221.USD":"Natixis Loomis Sayles US Growth Equity RA USD","LU1839511570.USD":"WELLS FARGO GLOBAL FACTOR ENHANCED EQUITY \"I\" (USD) ACC","LU1435385759.SGD":"Natixis Loomis Sayles US Growth Equity RA SGD-H","LU0823411888.USD":"法巴消费创新基金 Cap","BK4550":"红杉资本持仓","LU1551013342.USD":"Allianz Income and Growth Cl AMg2 DIS USD","LU0082616367.USD":"摩根大通美国科技A（dist）","LU0719512351.SGD":"JPMorgan Funds - US Technology A (acc) SGD","LU0056508442.USD":"贝莱德世界科技基金A2","BK4551":"寇图资本持仓","BK4574":"无人驾驶","IE00BJLML261.HKD":"HSBC GLOBAL EQUITY INDEX \"HCH\" (HKD) ACC","LU1914381329.SGD":"Allianz Best Styles Global Equity Cl ET Acc H2-SGD","IE00BSNM7G36.USD":"NEUBERGER BERMAN SYSTEMATIC GLOBAL SUSTAINABLE VALUE \"A\" (USD) ACC","LU0234572021.USD":"高盛美国核心股票组合Acc","LU0820562030.AUD":"ALLIANZ INCOME AND GROWTH \"AMH2\" (AUDHDG) H2 INC","LU2063271972.USD":"富兰克林创新领域基金"},"source_url":"https://www.barchart.com/story/news/27973890/tesla-stock-is-down-but-still-treading-water-ideal-for-put-option-short-sellers-as-an-income-play","is_english":true,"share_image_url":"https://static.laohu8.com/e9f99090a1c2ed51c021029395664489","article_id":"2459931961","content_text":"Tesla Inc  stock is off 24% since early July and fell further after the July 23 release of its Q2 results. It has been treading water lately below $200 with high put option premiums. That is ideal for short sellers as an income play - selling short out-of-the-money (OTM) puts in nearby expiry periods.As of Monday, Aug. 12, TSLA is down 23.4% from $257.86 on July 10. However, since the end of June 30 (i.e., the whole of Q3) it has stayed flat at just under $200 per share.Nevertheless, the stock's put option premiums are very high. Short sellers can take advantage of this by shorting them in near-term expiry periods. That provides extra income, especially for existing shareholders who also could gain from any increase in the stock price. One reason is that Tesla stock looks cheap here.Tesla Stock Could Be UndervaluedI discussed this in a recent article on Tesla. My July 24 Barchart article showed that despite the company's poor quarterly results, TSLA stock could be cheap.For example, the market has been upset that despite a 2% YoY rise in overall revenue, its automotive sales were down 7% Y/Y. However, its operating income was still positive and it generated $1.34 billion in free cash flow even after $2.27 billion in capex spending.That represented a 5.26% FCF margin (i.e., $1.34b/$25.5 billion in sales). That augurs well for the company going forward.For example, analysts forecast sales will rise to $116.23 billion next year, up over 16.8% from $99.49 billion forecast for 2024. Therefore, if Tesla can keep making high FCF margins, its value is likely to rise.Target Price EstimateLet's assume that with higher sales its FCF margin rises to 7.5%. Its free cash flow will hit $8.72 billion (i.e., 0.75 x $116.23 billion in forecast 2025 sales).As a result, using a 1.0% FCF yield metric, its market cap could rise to $872 billion (i.e., $8.72/0.01). That is 37.9% over its present $632.3 billion market value. In other words, TSLA stock could be worth $272.19 per share (i.e., $197.38 x 1.379).But just be conservative, let's say its FCF margin rises to just 6% and sales rise just 15% to $114.4 billion next year. That implies that its FCF will be $6.865 billion (i.e., 0.06 x $114.4b = $6.865b).Therefore, its market cap, using a 1.0% FCF yield metric, will be $686.5 billion. That is still 8.56% over today's $632.3 billion market value. That results in a price target of $214.28 per share.In other words, our price target range is between $214 and $272 per share, or $243 per share on average. That is is still 23% over today's price.One way to play this is to sell short out-of-the-money (OTM) put options, given their high premiums.Shorting OTM PutsFor example, look at the Sept. 6 put option expiration period, which is just over 3 weeks away (25 days). It shows that the deep out-of-the-money (OTM) puts still have high premiums. That makes them ideal as income plays.The $175 strike price put option now trades for $2.80 on the bid side. This strike price is well over 10% below today's stock price. The short seller can make an immediate yield of 1.60% (i.e., $2.82/$175.00).$TSLA 20240906 175.0 PUT$   TSLA puts expiring Sept. 6 - Barchart - As of Aug. 12That means that an investor who secures $17,500 with their brokerage firm can enter an order to “Sell to Open” 1 contract at $175 and immediately receive $280 in their account. That works would to an investment return of 1.60%.As long as the stock stays over $175.00 the investor will not be obligated to 100 shares per contract shorted at the $175.00 strike price.","news_type":1},"isVote":1,"likeStatus":false,"favoriteStatus":false,"reportStatus":false,"tweetType":1,"langContent":"EN"}],"hasMoreComments":true,"newsSizeData":{"likeSize":3,"commentSize":1,"repostSize":1,"favoriteSize":2,"likeStatus":false,"favoriteStatus":false}}