Tesla Inc (TSLA) Trending Stock Report

Tesla Inc. (TSLA) is one of those stocks that is always trending in the news and social media. In the last 24 hours, social media mentions are up 95%. That caught our eye initially. As we started digging into the data we noticed that the 1-month implied volatility is very near a 2-year low.

From an options trader’s perspective that tells us that options prices are also near a 2-year low. The stock has been trading in a narrow range near 180 for the last 3 weeks. This tells us that we have an option buying situation.

With options at a relatively inexpensive price, a simple tweet from Elon Musk could be the catalyst to move this stock price in our favor.

This MDM Graph compares the modeled expectations of current options prices (the orange line) to the actual distribution of stock prices over the last two years (the blue histogram). You can see in the chart that TSLA made big moves much more frequently than the modeled options prices expect. This is great news for option buyers.

This Volatility Cone compares implied volatility expectations (the yellow dots) to historical volatilities over the past two years. Expectations at every term are below average. The 1-month term is midway to the extremely low historical volatility (the lower purple line). To learn more about the Volatility Cone, click here.

The Volatility Term Structure shows that options expiring on June 21^st have low implied volatility expectations and good liquidity. To learn more about Volatility Term Structure, click here.

TSLA is typically a volatile stock that has big moves frequently. For some unknown reason, options traders have allowed TSLA options prices to drift lower. Our bet is that they will not stay low much longer and that TLSA stock will have a bigger move in the next month than current options prices expect.

Be sure to read the ODDS Online Daily Trade Idea report to get the details of our trade ideas for TSLA.