Tesla Inc (NASDAQ: TSLA) gained 2.8% more on Wednesday and is now 1.560% in the past 18 months.
While Tesla bulls are betting that the insane stock race will continue after a Democratic Senate sweep in Georgia, some Tesla options traders are getting rid of large amounts of call options on Wednesday.
Related link: What a democratic victory in the second round of elections in Georgia means for the stock market
Tesla’s negotiations: As of Wednesday morning, Benzinga Pro subscribers received dozens of alerts related to Tesla’s major options trading. Here are the top four:
-
At 9:30 am Eastern time, a trader sold 310 Tesla call options with an exercise price of $ 260 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 an exercise price of $ 1,400 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 dealer sold 798 Tesla call options with an exercise 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 trader sold 798 Tesla call options with a strike price of $ 700 expiring on March 19. The contracts were sold at a purchase price of $ 130.38 and represented a down payment of $ 10.4 million.
Because it’s important: Even traders who limit themselves exclusively to stocks often monitor the activity of the options market closely 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 individuals or institutions that may have unique information or theses related to the underlying stocks.
Unfortunately, stock brokers often use the options market to hedge against their larger stock positions, and there is no foolproof way to determine whether an options trade is an autonomous position or a hedge. In that case, given the relatively large size of Tesla’s largest option trades, there is certainly a possibility that they could be an institutional hedge for a large Tesla stock position.
Tesla investors making a profit: Wednesday’s big options trading comes after Tesla reported a record 180,570 vehicle deliveries in the fourth quarter, an increase of 29.6% compared to the third quarter. That number exceeded analysts’ estimates of 174,000 vehicles.
For the entire year 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 isn’t exactly in line with its increase of 35, 9% on deliveries.
Tesla had previously said it would “comfortably exceed” 500,000 vehicle deliveries in 2020. CEO Elon Musk also said that Tesla would have one million robot axles in operation by 2020.
Tesla investors expect Democrats in control of the White House and Congress to 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 electric vehicle stocks 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 opinion: The top four options trading on Wednesday morning were all call sales and represented a total 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 commercial gains from these calls after Tesla’s historic run.
See more from Benzinga
© 2021 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.