With the largest negative net volume since the 14th of May, 2013, TSLA dipped back into $260 territory today after news got out that the SEC is filing a lawsuit against [CEO] Elon Musk, allegedly for fraud. SEC claims that Musk misled investors when he tweeted that he was considering taking the company private at $420 a share back in August.
Naturally this has created an insane amount of implied volatility which is perfect for selling options while premium is high. I have personally taken a November-9 put credit spread with the assumption that TSLA will either remain flat or rebound in the interim. TSLA has broken the daily 2-SD low 5 times previously this year, rebounding on every occurrence. Will history repeat itself, or will this finally be the straw that breaks the camels back? Enjoy the show folks.
Disclaimer: I am mildy-bullish to neutral on TSLA. This is a risky trade, thus I make no recommendation and the views stated here are based on my own personal, at times flawed, assumptions. Discretion is advised.