To: carranza2 who wrote (160391 ) 7/21/2020 4:41:51 PM From: TobagoJack Read Replies (1) | Respond to of 217840 One day we might, even if unlike, be told what the unusual option trade (Call, strike 3,500, expiration 24th July) was all aboutinvestors.com Tesla Stock Earnings Coming; What Does This Option Activity Mean? GAVIN McMASTER Earnings season is ramping up and sometimes option activity ahead of earnings is worth looking at. Here's some interesting activity on the options for Tesla stock. Tesla Stock Earnings On Tap July 22Tesla ( TSLA ) put in a stellar move already this past year. The question is, can it keep going? Recall that a few weeks ago, we looked at a bullish option trade on Tesla stock that is working quite well. The upcoming earnings report due after the market close on July 22 puts even more focus on Tesla stock. One thing caught my eye yesterday and that was some unusual option activity in the Tesla call. Yesterday, there were 6,244 calls traded on Tesla stock at the 3,500 strike expiring July 24. Yes, you read that right. Now, Tesla stock closed yesterday at 1,643. So it was very surprising to me when I saw so many calls being traded on a strike price that is 113% out of the money. What Does It Mean?We will never know if that was part of a larger strategy. But clearly someone thinks TSLA stock is going to rocket higher after the earnings announcement on July 22. There are always two parties to an options contract, and someone was willing to sell those calls to the buyer. Perhaps the seller was someone looking to collect the premium by selling naked calls (a risky strategy). The calls traded around $1.20 and 6,244 contracts would have cost the buyer $749,280. If Tesla stock remains below the 3,500 strike at the July 24 expiration, the premium seller gets to keep that entire amount collected. It seems unlikely that Tesla stock will rally above 3,500, but you never know! I wonder who will win one this trade, the call buyer or the call seller. What do you think? Either way, Tesla stock earnings are sure to provide some fireworks this quarter and I'll be watching intently.This article is for education purposes only and not a trade recommendation. Remember to always do your own due diligence and consult your financial advisor before making any investment decisions. Gavin McMaster has a Masters in Applied Finance and Investment. He specializes in income trading using options, is very conservative in his style and believes patience in waiting for the best setups is the key to successful trading. Follow him on Twitter at @OptiontradinIQ .YOU MIGHT ALSO LIKE: DuPont Bearish Option Trade Offers Potential 33.33% Return Betting On The Indian Stock Market With This Bullish Option Play Can Google Stock Play Catch Up With This Bullish Option Trade? See Stocks On The List Of Market Leaders With IBD Leaderboard Sent from my iPad