Unusual Options talks? How's TSLA's short-term target?
During the earnings season for big companies, the impact of the financial reports is not limited to just the day of the release. The market may continue to react to the reports for several trading days afterwards.
For example, after $Netflix(NFLX)$ reported a significant increase of 15%, its stock continued to rise by an additional 2%. while $Tesla Motors(TSLA)$ faced pessimistic expectations and saw a major drop of 9% after its financial report, followed by another 4% decrease.
Currently, Tesla's stock is at a level that marks its first rebound since the beginning of the year, and there is significant speculation between the price range of 200-230
From the perspective of options activity, the trading in the days after the financial report is more focused on Calls. There are mainly two types of trades:
1. New at-the-money or in-the-money Calls with strikes between 200 and 210. The dominant traders are buyers because these Calls were deep in-the-money before the financial report, and most of them have short-term expiration dates. There is a strong speculative element in betting on a short-term rebound, especially considering the stock has dropped more than 15% and is oversold.
2. Calls with strikes between 220 and 250. The dominant traders are sellers, and there is a large open interest. They are trying to use Covered Calls to recover some of their losses, and many of these Calls expire at the end of this week.
If the stock can rebound to around 230 in the next few days, it would be a relatively good outcome.
In terms of Puts, those who held deep in-the-money long-term Puts, such as those expiring in January 2024 or in three months, have chosen to close their positions as there is not much time value left. It is likely that they have made substantial profits from the trend of this financial report.
As for existing open Sell Puts, many have also chosen to close their orders, especially those near the 205 strike price, as the Delta risk has increased.
The price for opening Put trades with a duration of around 30 days is between 170 and 185. This suggests that Sell Put investors currently consider this price level to be the next reliable support.
Everyone can consider taking action at the right time!
Happy Trading!
Disclaimer: Investing carries risk. This is not financial advice. The above content should not be regarded as an offer, recommendation, or solicitation on acquiring or disposing of any financial products, any associated discussions, comments, or posts by author or other users should not be considered as such either. It is solely for general information purpose only, which does not consider your own investment objectives, financial situations or needs. TTM assumes no responsibility or warranty for the accuracy and completeness of the information, investors should do their own research and may seek professional advice before investing.
- Alvinlimsg·2023-10-24👍🏻LikeReport