Unusual Option Talks? Tesla's War of 200
$Tesla Motors(TSLA)$ finally traded below the psychological barrier of 200 at the end of October. The 10 trading days after breaking below the moving average are often days of intense speculation. Bulls will struggle, bears will continue to push down, and there will be a lot of passive selling when quantitative indicators are not met.
Last week, I made a report (as of last weekend) on the volatility of Tesla's upper and lower limits after the earnings report using abnormal options. When it continued to fall after October 30th, it can be seen that there was a large amount of closing positions for calls at the 200 and below levels of the expiration date option because the short-term cost-effectiveness of long positions was not high, and investors with long positions in the underlying stock may not choose this price to cover (there are still four trading days left).
Instead, the open interest of the expiration date call options at around 210 and 215 was very large. On the one hand, it was a position to cover, and on the other hand, it may be a mentality of "playing dead". Since it has fallen so much and the remaining value is not high, it is better to bet on a rebound, even if it cannot return to the price range, some delta can still be recovered.
On the other hand, the open interest of the expiration date puts is still concentrated at 190. In theory, there are still four trading days left. For naked sellers, there is a high possibility of taking on delivery. However, the fact that sellers are presenting the same strategy as during the continuous rise (near-the-money puts) indicates that they still have confidence in this position and even if they take on delivery, there may still be opportunities to get rid of it in the short term.
Personally, I also believe that the tug-of-war at the $200 price level will continue for a period of time, so there are opportunities for profit or escape in the short term for near-the-money puts, while the price range for covering in the short term has decreased significantly and a large increase seems unlikely.
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