Tesla Motors Inc. (NASDAQ:TSLA) is to report its fourth-quarter earnings on Wednesday. Waiting to see if that will be enough to drag the stock out of the negative territory it has been trading for the past year. Panic movements can already be seen in the options trade market according to CNBC’s, Dan Nathan as investors look to lock in some gains before the earnings are announced. The analyst believes it may be necessary to take a break on the stock ahead of the earnings as the stock could go either way.
It has not been the best of rides for Tesla Motors Inc. (NASDAQ:TSLA) as a series of negative sentiments have seen the stock plummet to the lows of $200 trading mark. Skepticism about the company’s unit sales in China has also gone to add more woes to the giant electric company.
“In some percent it implies movement in either direction and that’s actually has been the average over the last four quarters. The stock is obviously a big mover here. Today there was an interesting trade when the stock was about $215 a trader sold 1,000 of the March 230 strike calls at $7.10 to close. So they are closing out a bullish bet in the stock before this earnings are coming up,” said Mr. Nathan
Heading into the earnings report, Nathan warns of caution on Tesla Motors Inc. (NASDAQ:TSLA) as the charts clearly show that on, any negative news the stock could plummet even further. China sales that were below analyst expectations have already shown how the stock remains volatile on the downward trend; having clocked a low of $180 a share although it has since bounced back.
“The price of options is not as high as it has been over the last three-quarters, so I think that China News last month has taken some of the mystery out of the report. So if you are looking to protect longs actually long premiums structure could help to protect your stock,” said Mr. Nathan
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