Tesla options hint at trouble ahead with bets near US$200 a share
BNN Bloomberg
Tesla Inc. was the one of the biggest laggards in the S&P 500 Index on Monday, and options traders are betting the stock could drop further before the weekend.
A put contract with a Friday expiration and a strike price of US$200 was the most-traded contract for Tesla on Monday and among the 15-most popular on U.S. exchanges overall during the day. The bearish option in the electric carmaker implies the stock has at least another 5 per cent to fall this week.
Tesla closed near $211 on Monday, down 1.5 per cent from Friday’s close after lowering prices across its lineup in China and options investors are betting shares could fall below $200 by Friday, making the $200 put contract in the money -- or available for immediate profit -- before expiration.
The price of the contract jumped as much as 249 per cent on Monday before settling only 9.9 per cent higher as Tesla’s drop abated. Some 145,000 of the contracts changed hands.
