Options Corner: TSLA Example Trade

Core Viewpoint - Morgan Stanley has removed Tesla from its top pick status while maintaining an overweight rating and a price target of $410 per share [1] Group 1: Tesla's Market Performance - Tesla's stock has increased by 62% over the past year, outperforming legacy automakers like GM, Toyota, and Ford, which saw increases between 10% and 23% [3] - Tesla is currently positioned as the "caboose" of the Magnificent 7 but is still leading the broader market and its consumer discretionary sector [2] Group 2: Technical Analysis - Resistance levels for Tesla's stock are identified between $360 and $367, with a potential breakout zone above these levels [5][6] - The stock is above moving averages and is on the verge of a breakout, with a significant volume node between $320 and $350 [6] Group 3: Shareholder Interests and Compensation - Morgan Stanley's Adam Jonas noted that the proposed compensation package aligns the interests of Tesla's minority shareholders with those of Elon Musk [7] Group 4: Options Trading Strategy - An example trade suggests a bullish strategy using an unbalanced call butterfly with a $150 debit, targeting a price range around $365 to $380 [9][12] - The maximum profit for this trade would peak at around $850, with a break-even point near $365 [10][11]