We recommend selling the following OTM Call Option of TSLA, with a profit target of 25% and stop loss of 50%:
Sell TSLA Feb 7 400CE
Our analysis behind this recommendation is as follows:
A) Analysis of Stock Market Indices
1) The Market is overall Bearish today! See the distribution of Open Interest for SPY and QQQ below.
2) For SPY options expiring in 4 days (weekly), 74.0% of the total open interest reflects a “Put Long Buildup,” indicating a strongly bearish sentiment.
B) Analysis of Mag-7 Stocks
3) TSLA and NVDA show the strongest bearish sentiment among the Mag 7 stocks, based on the aggregated open interest distribution across weekly (4 DTE), monthly (18 DTE), and LEAPS (347 DTE) option chains.
4) TSLA is the most bearish, based on the weekly (4 DTE) option chains, with 68.7% of its total open interest reflecting a “Put Long Buildup,” signaling strong bearish sentiment.
5) TSLA exhibits strong bearish sentiment, as reflected in the open interest distribution across its weekly, monthly, and LEAPS option chains.
6) We can review the Open Interest at different Strike Prices of Call Options of TSLA in the weekly (4 DTE) option chain.
We notice that 400 CE has 4914 Open Interest, delta of 32.47% and 5.7 premium.
Conclusion
We recommend selling the following OTM Call Option of TSLA, with a profit target and stop loss:
