Unleashing the Potential of Options Trading for Tesla Inc
Today marks an exciting day for investors eyeing Tesla Inc (Symbol: TSLA) as new options have hit the market. Set to expire on May 24th, these options are ruffling feathers in the financial world.
For those willing to take a plunge, the $125.00 strike put contract has emerged as a focal point. Priced at 99 cents, this contract opens up a realm where investors commit to purchase the stock at $125.00, while cushioning the blow with a premium, effectively setting the cost basis of shares at $124.01.
At first glance, this might seem like a rather steep discount at around 27% off the current trading price. With odds of expiration deemed to be 92%, the potential for this put contract to end up worthless looms large.
Switching gears to the call side, the $235.00 strike call contract has stirred the pot with a bid of 96 cents. By venturing into a “covered call” scenario, investors can commit to selling the stock at $235.00, garnishing a healthy total return of 38.65% if the stock is called away at expiration.
However, at a 38% premium to the current trading price, the prospect of the covered call contract expiring worthless remains at 86%. These odds will be dutifully monitored to unveil whether investors can hold onto both their shares and the premium collected.
Implied volatility stands at 64% for the put contract and 71% for the call contract. Meanwhile, the actual trailing twelve-month volatility sits at 48%. This intricate dance of numbers paints a vivid picture for those delving into the tumultuous waters of options trading.
