Today’s News
Investors are showing strong enthusiasm for Tesla options, propelling the stock to its highest point since April 2022 as bets mount on potential benefits from CEO Elon Musk’s close ties to newly elected President Donald Trump.
Tesla shares surged 8% on Monday to USD 346.12, with a rally of over 35% since the November 5 election. This activity marks Tesla options as the most heavily traded among individual stocks, with around 2.5 million contracts exchanged by midday—double the usual pace, according to Trade Alert data.
Image Source: Reuters
“It’s euphoric,” said Steve Sosnick, chief strategist at Interactive Brokers. He pointed out an influx of call options focused on the USD 400 level, about 13% above the current stock price, with nearly 56% of trades expiring by Friday.
Much of the excitement stems from Musk’s ongoing support for Trump, underlined by a USD 119 million contribution to a pro-Trump spending group. Analysts believe Musk’s ventures—including Tesla, SpaceX, and Neuralink—could gain traction under policies favorable to Musk’s regulatory and subsidy-dependent businesses.
Wedbush Securities responded to the shift, raising its Tesla share target price from USD 300 to USD 400, viewing Trump’s win as a “gamechanger” for Tesla’s advancements in autonomous technology and AI. On Monday, call options at the USD 350 and USD 400 strikes—set to expire by Friday—were among the most traded, with 180,000 contracts exchanged.
Such concentrated call-option buying might also be fueling Tesla’s stock rise, as options dealers adjust by purchasing Tesla shares to offset risk from these popular bullish contracts. “If enough people speculate on certain strikes, the stock can have a tendency to move toward those strikes,” Sosnick noted.
SpotGamma founder Brent Kochuba suggested that while Tesla’s call options are in high demand, prices could drop if the stock fails to maintain its upward trajectory. “That can pressure the stock down,” he added, indicating potential volatility in coming sessions.
Other News
S&P 500 Hits Record High on Trump Ties
The S&P 500 reached a record close as stocks expected to benefit from President-elect Trump’s policies gained momentum. Tesla soared over 9%, boosting its market value past USD 1.1 trillion.
Dollar and Bitcoin Surge on Trump Policies
The U.S. dollar neared a four-month high, and bitcoin hit a record USD 89,637 as Trump’s election boosted assets expected to benefit from his economic policies.
Oil Steady as Markets Await OPEC Report
Oil prices held steady Tuesday as investors looked to OPEC’s monthly report for demand outlook, following price declines on China’s modest stimulus and supply concerns.
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