Tesla Motors Inc. (NASDAQ:TSLA) has been on a tear compared to other stocks in the auto industry, already up by 73% for the year and nearing its all-time high. The surge in the market has been attributed to increased orders of the much-reviewed electric vehicle and the anticipation of the construction of the Gigafactory. CNBC’s Mandy Drury, on the other hand, seems to be of the opinion that the stock has maintained its upward rally because the company’s CEO, Elon Musk, owns 23% of the company’s stock enough to suppress any form of movement made by Short traders.
Drury advises on using Tesla Motors Inc. (NASDAQ:TSLA)’s options calls to determine the direction that the stock could probably head, as well as, for covering any form of risks that may arise. The huge amount of stakes owned by Musk essentially means that he will always be in constant battle with short traders an effect that may result in the stock surging even further in the market. With the shorts always in constant danger of being tripped up, buying opportunities are always sure to rise as new shorts trickle in.
“[…] My conclusion is here, I am not going to tell you whether it is going up or down; I don’t know. […] If you start getting nervous, you can think about using options to define your risk and do stock replacement trades or buy protection,” said Mr. Drury.
Tesla Motors Inc. (NASDAQ:TSLA)’s stock remains one of the best-owned stocks in the automotive industry, according to Drury, mainly because the company’s CEO and founder, Elon Musk, owns a 23% stake. Despite the company receiving bad reviews from consumer reviews and Edmonds research, the stock seems to have maintained its upward trend last week; waiting to see the impact of the much awaited Model X and the Gigafactory in the long-run. Tesla Motors Inc. (NASDAQ:TSLA)’s stock is also backed by huge capital pulls, which, according to the analyst, look certain not to enter into any form of sell positions any time soon.