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Carter Worth And Mike Khouw's Tesla Trade

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Carter Worth And Mike Khouw's Tesla Trade

On CNBC's "Options Action," Carter Worth analyzed Tesla Inc (NASDAQ: TSLA) from a technical standpoint.

Since 2019, Tesla moved 10 times higher to reach its current price, but that was not the only 10x move for the stock, explained Worth. The first time the 10x move happened was a few years after the IPO when the stock moved from $25 to $250. Before the first move higher, Tesla was trading sideways for a few years and after the move, it had four years of consolidation.

Worth believes that the pattern could repeat. After the 2015 -2019 consolidation and the latest sharp move higher, Worth expects it to trade sideways or lower.

Mike Khouw suggested that traders should use options to trade on this forecast. He wants to sell the September $2,250 / $2,300 call spread to collect a premium of $13.50. He would keep the premium if the stock stays below $2,250 at the September expiration. He starts to lose money above $2,263.50 and he can maximally lose $36.50.

 

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