Shares of Tesla Motors (TSLA) have been sinking in recent sessions, and are now 40% off of their 52-week highs. One trader sees a rebound to new highs occurring by the middle of next year.
That’s based on the June 2026 $950 calls. With 476 days until expiration, 33,003 contracts traded compared to a prior open interest of 293, for a massive 113-fold rise in volume on the trade. The buyer of the calls paid $9.50 to make the bullish bet.
Tesla shares recently traded for about $302, so they would need to more than triple to move in-the-money. The strike price is also nearly double the stock’s all-time high of $488.54 per share.
Tesla has revolutionized the market for automobiles, rolling out fully EV models even as traditional automakers had a 100-year head start. The company is now looking at ways to create fully self-driving vehicles, making it a valuable AI play as well.
Action to take: Shares are certainly pricey at 111 times forward earnings, but the company’s valuation could be far higher if they can develop fully autonomous vehicles.
In the very short-term, shares are oversold following their recent selloff, and are due for a bounce. Contrarian investors may like shares here.
For traders, the June $950 calls are an inexpensive play not only on a bounce higher, but on a massive rally in shares between now and the middle of next year. More skeptical traders may want to look for a shorter-dated trade for a small bounce in the coming weeks.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any company mentioned in this article.
