Tesla Motors Inc (NASDAQ:TSLA) stock price went down by around 4% on Friday. Tesla’s CEO, Elon Musk himself admitted few days back that the company shares were overvalued. This has raised doubt in many investors about the valuation of Tesla stock. Options actions traders Michael Khouw and Dan Nathan talked on CNBC about the company and its valuation.
Tesla Motors Inc (NASDAQ:TSLA) stock hit an all-time high back in February, post which the stock had a down turn. The stock again started gaining from the month of May and has hit another all-time high few days back.
Nathan said that he would not press on the day in which that stock has dropped 4%, instead he mentioned that he would wait on the stock for a week and if the it has a weakness; it might be consolidated along the $265 level from February. Nathan mentioned that he would use the options to put the trade in his favor and pointed out at a way that he would do it.
“[…] When the stock was $276, I looked at the September-October 265 put count that cost $5. We are selling one of the September 265 puts at $3 and buying one of the October 265 puts for $8. $5 is my max risk here and what I am really trying to do is, using next two weeks to get the stock to inch a little lower, back to its break out level, consolidate […],” Nathan added.
Khouw added that the he is not foreseeing Tesla Motors Inc (NASDAQ:TSLA)’s stock to decline and he pointed that the company’s revenues surged by around a tenfold to $20 billion in a year.
One of Tesla Motors Inc (NASDAQ:TSLA)’s shareholders is Andor Capital Management, led by Daniel Benton. The hedge fund holds around 1.25 million shares of the company.