Dan Nathan's Tesla Motors Inc Trade
He explained that the stock broke the resistance at $265 in August and jumped to its new 52-week high at $291.42. It looks to him that Tesla is going to return to the $265 price level and consolidate there in the near term.
On Friday, the stock fell to $277.39, and Nathan doesn't want to press on this trade on a down day. He wants to wait and see if Tesla is going to show some weakness early next week. To make a bearish bet, he wants to use options, specifically, the September - October 265 put calendar.
Nathan would buy the October 265 put for $8 and sell the September 265 put for $3. The net premium for this trade is $5, and that is his maximal risk. The breakeven is at $260.
Mike Khouw commented that he likes this trade, while Carter Worth believes that Tesla is going to continue to move higher.
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