Benzinga
Tesla options traders are discarding large amounts of calls
Tesla Inc (NASDAQ: TSLA) gained an additional 2.8% on Wednesday and has now risen 1,560% in the past 18 months. While Tesla bulls are betting that the insane stock race will continue after a sweep of the Democratic Senate in Georgia, some Tesla options brokers are dumping large amounts of call options on Wednesday. Related link: What a democratic victory in the second round of Georgia’s election means for the stock market Tesla’s trades: On Wednesday morning, Benzinga Pro subscribers received dozens of alerts related to unusually large Tesla options trading . Here are the top four: * At 9:30 am ET, a trader sold 310 Tesla call options with a $ 260 strike price due on September 17. The contracts were sold at a purchase price of $ 500 and represented a $ 15.5 million bearish bet. * At 11:31 am ET, a dealer sold 921 Tesla call options with a $ 1,400 strike price due in January 2022. The contracts were sold close to the $ 100 offer price and represented a $ 9 down bet , 21 million. * At 11:33 am ET, a trader sold 798 Tesla call options with a strike price of $ 850 expiring on June 18. The contracts were sold at a purchase price of $ 117.46 and represented a low bet of $ 9.37 million. * Less than a minute later, a broker sold 798 Tesla call options with a strike price of $ 700 due on March 19. The contracts were sold at a purchase price of $ 130.38 and represented a down payment of $ 10.4 million. Why it matters: Even traders who stick exclusively to stocks and closely monitor the activity of the options market for exceptionally large trades. Given the relative complexity of the options market, large options traders are usually considered to be more sophisticated than the average stock trader. Many of these big options traders are wealthy people or institutions that may have unique information or theses related to the underlying stocks. Unfortunately, stock traders often use the options market to hedge against their larger stock positions, and there is no foolproof way to determine whether an option trading is an independent position or a hedge. In this case, given the relatively large size. of Tesla’s biggest options trades, there is certainly a possibility that they could be an institutional hedge in a large position in Tesla shares. Tesla Investors Profiting: Wednesday’s major options trading comes after Tesla reported a record 180,570 vehicle deliveries in the fourth quarter, up 29.6% from the third quarter. That number exceeded analysts’ estimates of 174,000 vehicles. Throughout 2020, Tesla delivered 499,550 vehicles. Tesla bulls highlight the fact that growth of any kind is impressive, given the difficult environment of 2020, while bears point out that Tesla’s 800% increase in market capitalization is not exactly in line with its 35% increase , 9% in deliveries. Tesla had previously said this would “comfortably exceed” 500,000 vehicle deliveries in 2020. CEO Elon Musk also said that Tesla would have one million robot axes in operation in 2020. Tesla investors expect Democrats to control the White House and Congress provide a significant favorable wind for clean energy stocks. On Wednesday, Wedbush analyst Daniel Ives said that a sweep in Georgia would be particularly optimistic for the shares of electric vehicles like Tesla, General Motors Company (NYSE: GM) and Fisker Inc (NYSE: FSR). TSLA chart by TradingView new TradingView.widget ({“width”: 680, “height”: 423, “symbol”: “NASDAQ: TSLA”, “range”: “D”, “time zone”: “Etc / UTC” , “theme”: “light”, “style”: “1”, “locale”: “en”, “toolbar_bg”: “f1f3f6”, “enable_publishing”: false, “allow_symbol_change”: true, “container_id”: ” tradingview_12fc0 “}); Benzinga’s Take: The four largest options trades on Wednesday morning were all call sales, and they accounted for an aggregate of more than $ 44 million in Tesla’s low options trading volume. Tesla bulls cannot be upset with options traders by taking advantage of what could be massive trading gains on these calls after Tesla’s historic run. See more at Benzinga * Click here for Benzinga options trading * Which means a democratic victory in Georgia’s runoff election For the stock market * 10 best performing S&P 500 shares of 2020 (C) 2021 Benzinga.com . Benzinga does not provide investment advice. All rights reserved.