Tesla Call Traders Got in Ahead of Morgan Stanley Bull Note

Tesla was the most popular equity amongst options traders over the last two weeks

Shares of Tesla Inc (NASDAQ:TSLA) are 9.3% higher at $271.51 at last check, after Morgan Stanley upgraded the electric vehicle (EV) giant to “overweight,” hiked its target price to $400 from $225, and named it a “top pick.” The analyst cited the company’s autonomous driving growth in its bull note, and said its software and services revenue is the “biggest value driver.” 

Today’s gap higher puts Tesla stock above recent a recent ceiling at the $260 level. The stock was victim to the broader market’s August selloff, but was saved by its 140-day average. What’s more, the stock’s 80-day trendline has moved in as support, as it boasts more than 120% year-to-date lead.

TSLA Chart September 112023

Ahead of all today’s events, the security appeared on Schaeffer’s Senior Quantitative Analyst Rocky White’s list of stocks that have attracted the highest weekly options volume during the last 10 days. Tesla stock led the pack over the past two weeks, with 14,750,876 calls and 11,476,855 puts traded. The most popular contract was the weekly 9/8 255-strike call.

 MAO Chart September 112023

So far today, 1.36 million calls have been exchanged, which is 1.8 times the typical intraday average amount, versus 770,000 puts. New positions are opening at the top 18 most popular contracts, led by the monthly September 270 call. 

Options are affordably priced at the moment, too, per the security’s Schaeffer’s Volatility Index (SVI) of 51% that ranks higher than just 18% of readings from the last 12 months, implying low volatility expectations. Even better, the equity’s Schaeffer’s Volatility Scorecard (SVS) tally of 94 out of 100 implies it tends to outperform said volatility expectations.

The majority of analysts are actually bearish on TSLA, however. In fact, 27 of the 45 in coverage carry a “hold” or worse rating.  Plus, the consensus 12-month target price of $241.12 is now an 11.3% discount to Tesla stock’s current perch. 

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