Trade of the Week: Unusual Options Activity In Tesla

Options Portfolio Manager – Investors Alley • Nov 26, 2019 at 8:08 AM EST

TSLA recently unveiled its new Cybertruck at a product launch and it was an unmitigated disaster.

This week, there was some significant unusual options activity in Tesla (TSLA). TSLA recently unveiled its new Cybertruck at a product launch and it was an unmitigated disaster. Not only does the “truck” look like something out of a bad sci-fi movie, but the supposed unbreakable glass windows were easily broken when tested at the show.

Tesla stock dropped 6% on the next day with 678,000 options trading as well. There were even 30,000 deep out-of-the-money puts purchased for next January, however, this may have been a closing trade. Overall, the call and put activity was pretty even as some investors are betting the stock has more to fall, while others consider the selloff to be an overreaction.

Video Length: 00:05:18

Disclaimer:

Information contained in this email and websites maintained by Investors Alley Corp. ("Investors Alley") are provided for educational purposes only and are neither an offer nor a recommendation to buy or sell any security, options on equities, or cryptocurrency. Investors Alley and its affiliates may hold a position in any of the companies mentioned. Investors Alley is neither a registered investment adviser nor a broker-dealer and does not provide customized or personalized recommendations. Any one-on-one coaching or similar products or services offered by or through Investors Alley does not provide or constitute personal advice, does not take into consideration and is not based on the unique or specific needs, objectives or financial circumstances of any person, and is intended for educational purposes only. Past performance is not necessarily indicative of future results. No trading strategy is risk free. Trading and investing involve substantial risk, and you may lose the entire amount of your principal investment or more. You should trade or invest only "risk capital" - money you can afford to lose. Trading and investing is not appropriate for everyone. We urge you to conduct your own research and due diligence and obtain professional advice from your personal financial adviser or investment broker before making any investment decision.