Tesla Motors Inc (NASDAQ:TSLA) had a very good 2014 till September, during which the stock price had hit an all-time high. The stock price soared as high as $280 per share. But post September the stock tumbled and had dropped around 25% since then. Tesla Motors Inc (NASDAQ:TSLA) stock is currently trading at $219.31 per share. Option Actions Trader Dan Nathan talked on CNBC about Tesla Motors Inc (NASDAQ:TSLA)’s stock and his options to make money out of it in 2015.
Nathan feels that Tesla Motors Inc (NASDAQ:TSLA)’s stock trend in 2014 was very interesting, with a perfect text book head and shoulders, with $200 being the neck line. He added that the stock broke that mark a couple of weeks ago. He mentioned that Tesla Motors Inc (NASDAQ:TSLA) stock is in a downtrend after the September high. He added that the 50 day moving average stock price is about to get below the 200 day average price of the stock. He mentioned that some technicians call it the ‘death cross’.
Nathan added that if the stock breaks $200 on the downtrend, it could go as low as $160 – $170 on the downside. He suggested that it is good to have a near term bearish bet on the Tesla Motors Inc (NASDAQ:TSLA) stock considering the fact that the stock price is on the down trend and potential head winds ahead in 2015. Nathan shared his option ideas to make money out of Tesla Motors Inc (NASDAQ:TSLA) stock in the current situation.
“[…] Today when the stock is $217.50, I bought the February 210-180-150 put butterfly. I paid about $5 for that. […] I bought one of the February 210 puts for $11. I sold two of the February 180 puts at $3.50 each at $7 in total and I bought one of the February 150 puts for $1. It cost me $5 for the structure. That’s my max risk. Between $205 and $155 for February expiration, I can make up to $25. That 5 times my money and above $210 and below $150 I lose that $5. So if you think about it this is not a stock I want to short with 27% short interest,” Nathan said.
He added that this is one of the best ways to make money out of Tesla Motors Inc (NASDAQ:TSLA) stock at low risk.
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