Options Traders Piling on Tesla 330 Calls. Bullish on Q2 Earnings?

Tesla swings, and swings wildly on earnings. The electric car maker will be reporting its second quarter earnings report after the market close on August 1, 2018.

What happened after first quarter 2018?

Tesla reported narrower than expected loss during the first quarter of 2018 but the stock declined sharply (-5%) during after hours trading, thanks to Elon’s unusual reaction to analysts as he dismissed some of their questions. Two days later the stock surged to old levels and started moving side ways for the next few days.

If first quarter swings are anything to go by, then expect Tesla stock to stay volatile this week as well as the next.

Screenshot from CNBC

According to CNBC contributor Mike Khouw, options traders are expecting Tesla to swing +/- 9%. He also noted that bullish bets on Tesla has increased, especially on August 3 weekly 330 calls. At the time of writing this article, 330 calls had a open interest of 3,734, higher than any other call. You can check Tesla August 3 Option Chain here

What happens if Tesla beats top line as well as bottom-line estimates?

Don’t expect much to happen.

Because Tesla is not a normal stock where a top line and bottom line beat will result in a stock surge. Tesla has now beaten bottom-line estimates for seven quarters in a row and revenue estimates for the last two quarters. There is a good chance for Tesla to beat estimates during the second quarter as well.

Tesla analysts tend to focus all their attention on cash burn, lack of profitability, color on Model 3 net reservations and so on.

Elon Musk may be a bit restrained this time as he apologized on Twitter for being dismissive during the first quarter 2018 earnings call. A day later he tweeted “”I should have answered their questions, live.”

Tesla, Inc. Q2 2018 Financial Results and Q&A Webcast Aug 1, 2018 2:30 PM PDT, Listen to webcast


Sources:

Options traders banking on a breakout for Tesla on earnings from CNBC.

 

CNBC

Tesla Chart: Morningstar

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