Market Overview

Dan Nathan's Tesla Motors Inc Trade

Related TSLA
KeyBanc: The Tesla Model 3 Is Fast And Elegant, But Maybe Too Simple
The Long-Term View On Lithium
Chinese control of cobalt supply is risk for car industry, Glencore CEO says (Seeking Alpha)

CNBC Options Action's Dan Nathan suggested to the viewers to consider a short position in Tesla Motors Inc (NASDAQ: TSLA).

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.

Posted-In: Carter Worth CNBC Dan Nathan Mike Khouw Options ActionMedia


Related Articles (TSLA)

View Comments and Join the Discussion!