No doubt about it… Tesla Inc (TSLA) is one of the most-talked-about stocks on the market…
And it makes sense given the insane run it’s gone through.
However, those that missed it…
Are chasing the stock at insane levels.
I mean take a look at the number of Robinhood traders that added TSLA to their accounts over the last three days.
The grand total of Robinhood accounts holding TSLA right now is more than 484K.
When it comes to a stock like TSLA, I like to tap into the options market to see where the money is moving…
And to my surprise, some traders are buying deep out of the money options in TSLA.
It’s mind-boggling how far out they’re going.
Even though the stock is set to report earnings on July 22, the odds of those options expiring in the money are so low…
That Only A “Sucker”
Would Be Placing them.
I want to show you how insane these bets are and why these “suckers” may get taken to the slaughter.
Even though TSLA has earnings and could see a crazy move… some of the trades my sucker bet scanner picked up were so mind-boggling, I had to bring it to your attention.
Here are the bets I saw…
Traders were buying the $2,800, $2,900 and $3,500 calls expiring on July 24… when the stock was trading around the $1,500 range.
That means the stock would need to crush earnings and build momentum into Friday expiration, and get above those strike prices.
I don’t know about you, but that seems like a long-shot to me.
Think about it like this, for the $2,800 calls to expire in the money, that trader would need stock to rise by more than 85%… just to break even.
With the $3,500 calls, TSLA would need to move by more than 135% just to break even.
I don’t know about you…
But even for an earnings event, that’s a really insane move for TSLA.
Now, when I looked at the odds, those trades at more than a 98% chance of expiring in the money.
In other words, whoever bought those options only has less than a 2% chance of gaining on the trade by the expiration date.
Can it happen?
Sure, but the odds are so low… it probably won’t happen.
And if you want to learn how I’m able to use a risk-defined strategy to stack the odds to my favor, then grab your digital copy of Wall Street Bookie.