We recommend selling the following OTM Call Option of TSLA.
Sell TSLA Feb 28 340 CE
Our analysis behind this recommendation is as follows:
A) Analysis of Stock Market Indices
Insight #1: The S&P 500 (SPY) is moderately BEARISH & NASDAQ (QQQ) is showing a strongly BEARISH sentiment today! Check the Open Interest distribution for SPY, QQQ below.
The pie charts illustrate the bullish or bearish sentiment for each ticker {GLD, IWM, QQQ, SPY} by showing the distribution of Open Interest, color-coded as follows:
Insight #2: For QQQ options expiring on February 28, 2025 (4 DTE), 89.1 % of the total open interest is jointly attributed to “Put Long Buildup”, “Call Long Unwinding and Call Writing” reinforcing a BEARISH sentiment.
B) Analysis of Mag-7 Stocks
Insight #3: TSLA shows the strongest BEARISH sentiment among the Mag 7 stocks, based on the Open Interest distribution across weekly (4 DTE) and monthly (25 DTE) option chains.
Insight #4: TSLA is the most BEARISH based on the weekly (4 DTE) option chains, with 97.3% of total Open Interest jointly attributed to “Put Long Buildup, and “Call Writing”. This distribution signals a strong BEARISH sentiment.
Insight #5: Additionally, we confirm that TSLA shows strong BEARISH sentiment, as evidenced by the absolute Open Interest distribution across its weekly (4 DTE) and monthly (25 DTE) option chains.
Insight #6: We propose to sell Call options in TSLA, since we have strong BEARISH sentiment. To identify the optimal Strike Price for trading, we analyze the Open Interest at various Strike Prices for TSLA’s Call Options in the weekly (4 DTE) option chain.
Notably, the 340 CE Strike has an Open Interest of 5,294, a Delta of 31.4%, and a Call Option Premium of $4.24
Conclusion
Based on our analysis, we propose to Sell to Open the following OTM Call Option of TSLA:
Sell TSLA Feb 28 340 CE
Appendix — My Trade
On February 24, 2025, at 10:00 AM, I executed the following trade:
Sell To Open TSLA Feb 28 340 CE @ $4.24
This trade is clearly reflected in the price chart of the TSLA 340 CE shown below:
I sold to open an TSLA Feb 28 340 CE at $4.24, collecting $424 per contract.
