Tesla Inc.’s
TSLA,
stock options have been priced for a bigger-than-usual one-day move after the electric-vehicle maker reports second-quarter results after Wednesday’s closing bell. An options strategy known as a straddle, a pure-volatility play that involves buying both bullish (calls) and bearish (puts) options with the same “at-the-money” (current price) strike prices, is priced for a move of $21.56 in either direction on Thursday, according to data provided by Matt Amberson, principal at Option Research & Technology Services. Based on the current price of $294.78, that would represent a 7.3% move, would mean a buyer of the straddle would make money if the stock closes above $316.34 or below $273.22 on Thursday. That straddle’s priced move is 25% more than the average price move of $17.29 over the past 12 quarters, Amberson said. Tesla’s stock, which gained 0.5% toward a 10-month high in midday trading ahead of the results, has soared 63.2% over the past three months while the S&P 500
SPX,
has gained 9.9%.
Read the full article here
