Options Trader Anticipates Tesla Stock Downturn Following Q1 Earnings Release

Tesla, Inc. TSLA is all set to release earnings for the latest quarter after the closing bell on April 19. Analysts expect the company to post quarterly earnings at 85 cents per share on revenue of $23.29 billion.

On CNBC’s "Options Action," Mike Khouw of Optimize Advisors said, although Tesla traded below-average options volume, it was still the second-busiest stock on Tuesday.

The options market is implying a move of around +/-6.9% by the end of the week.

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A trader sold 1,900 of the April 208.33 calls and bought 1,900 of the April 175-puts, Khouw mentioned.

The trader expects Tesla’s shares trading below $175 by Friday’s close.

A day after the Internal Revenue Service released the list of vehicles eligible for the electric vehicle tax credit, Tesla announced another price cut across its Model Y variants and the rear-wheel drive version of its Model 3 vehicle in the U.S.

Price Action: Tesla shares fell 1.5% to settle at $184.31 on Tuesday.

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Posted In: EarningsNewsOptionsMarketsMediaTrading IdeasCNBCMike KhouwOptimize AdvisorsOptions Action
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