We recommend selling the following OTM Call Option of TSLA
Sell TSLA Feb 14 260 CE
Our analysis behind this recommendation is as follows:
A) Analysis of Stock Market Indices
1) The Market Indices are overall moderately BEARISH today! See the distribution of Open Interest for SPY and QQQ below.
2) For SPY, QQQ options expiring in 3 days (weekly), 40.9% of the total open interest reflects “Call Long Unwinding” and “Call Writing” indicating a BEARISH sentiment.
B) Analysis of Mag-7 Stocks
3) TSLA and GOOG show the strongest BEARISH sentiment among the Mag 7 stocks, based on the aggregated open interest distribution across weekly (3 DTE), monthly (10 DTE) option chains.
4) TSLA is the most BEARISH, based on the weekly (3 DTE) option chains, with 62.2% of its total open interest reflecting “Put Long Buildup”, 24% reflecting “Call Writing” and a further 13% reflecting “Put Short Covering”, signaling strong BEARISH sentiment.
5) Moreover, TSLA exhibits strong BEARISH sentiment, as reflected in the absolute Open Interest distribution across its weekly, monthly option chains.
Thus, we are highly BEARISH on TSLA
6) In order to determine the best Strike Price to sell, we review the Open Interest at different Strike Prices of Call Options of TSLA in the weekly (3 DTE) option chain.
We notice that 260 CE has 7748 Open Interest, 16.5% Delta and 1.86 premium.
Conclusion
We recommend selling the following OTM Call Option of TSLA, with a profit target and stop loss:
