How Will Tesla Stock Perform After Earnings? Options Markets May Provide Clues.
Looking at how options markets are treating Tesla stock can give investors some idea of what kind of volatility to expect after the company posts third-quarter earnings results.
Stock options give investors the right to buy or sell stocks for a specific price at a fixed point in the future. Buying a call option gives the holder the right to buy a stock in the future. It’s a bullish bet: The buyer hopes the stock rises so they can end up buying shares at the lower price embedded in the option. Buying a put option does the opposite: It gives the investor the right to sell a stock at a fixed price down the road. That works out if share prices fall.
Currently, call and put options pricing implies Tesla shares will move about 6% up or down after earnings.