This Rare Options Trade in TSLA Protects Against A Big Drop

Dividend Investing

Tesla (TSLA) traded nearly 3.5 million options contracts the day after earnings last week. However, one unusual block trade really stood out on that day. A strategist placed a roughly one-week put butterfly trade, which has maximized gains if TSLA drops 20% in about a week. The trade starts making money if TSLA drops about 10%. This is likely an economical way of placing a downside hedge in the volatile stock through the end of the month.