Dan Nathan's Tesla Motors Analysis Ahead Of Earnings

On CNBC's Options Action, Dan Nathan spoke on the show about a move that options market is predicting for Tesla Motors Inc TSLA ahead of earnings. Nathan said that the options markets are implying a 9 percent move for the stock after the earnings. Nathan explained how he calculates the implied move for a key event. He adds premiums for at the money put and call in weekly options, and divides that amount with the current price of the stock. Buying at the money put and call is called a straddle and currently, for Tesla Motors Inc it costs $21 to buy a straddle for the November 237.5 strike, which is approximately 9 percent. The stock has to trade above $258.50 or below $216.50 for this strategy to be profitable and that is implied move for the week.