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What Happened to Options On Tesla With Two Days To Go And An Earnings Report

First it's five day chart going into a thursday. It closed at $438.97 on wednesday. Something else was happening on wednesday. It's quarterly earnings report were coming out after the markets closed. This factor means that both the Calls and Puts were priced higher than they usually would be. The 440 Calls going into the opening closed at $14.30 on wednesday's close and the offsetting Puts with the same striking price closed at $15.37. ...... So the $14.30 for the Calls means $1,430.00 U.S. dollars which equals about $2,000 Canadian. Just to break even the stock would have to close at $454.30 which would be a huge leap upwards. It could. As stated in a past blog on two of the last three Fridays Tesla has had an interday price swing of over $30.00 dollars. Let's watch it and see what happens. So really the "small fish" meaning the little guys like us can't be sloshing money around and holding onto contracts like this overnight. But wait. It's the sw...
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Toyota

Very few option contracts trade on Toyota. I have wondered why and offer one potential explanation. It's listed on multiple exchanges around the world and "option makers" in North America are basically just following the action. If the markets open stronger in North America that means Toyota traded stronger overnight on markets overseas. Secondly, the Calls and Puts trade in incriments of five dollars.There are for example 135 Calls, 140 Calls, 145 Calls. Having a five dollar spread wipes out the incentive try to daytrade option series which are soon to expire. If the stock moves from 142 to 143 the "bids and asks" on a 140 series of Calls might hardly change. It's not like trading the stock like Boeing where you can get in and out with option series set up in increments of $2.50 . Here is it's one month charts. The company now has a new C.E.O who is getting criticized for not moving to go electric quickly enough.
What I am now about to show you might discredit some of my above points. It's a five day chart on Toyota and look how all the action seems to happen on the opening. Why? It's the effect of overnight trading on other markets. Our North American trading follows Toyota's overseas market trading.
Now back to my point of how contracts trade. A volume of three and twelve contracts in the 140 Calls and Puts series that expire soon. Look at how wide apart the "bids and asks" are and how low the outstanding number of open contracts are. It's crazy.
Toyota is a great company. It's just not one that attracts option players.

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