Tesla Share price: It’s Tesla’s milestone Monday.
The automaker entered the $ 1 trillion club for the first time, surpassing $ 1,000 per share, with some stocks such as Apple and Microsoft having market caps above that limit.
The stock rose nearly 13% after rental car maker Hertz said it would buy 100,000 models to upgrade its electric-vehicle fleet, which will be fully operational by the end of 2022.
“It’s one of the common ticks that usually trades around a key psychological value, and in the options market it will stick to those levels,” Daniel Shaw, director of options at Simpler Trading, told CNBC’s “Trading Nation” on Monday.
After Tesla’s recent milestone, Shay is aiming for an even higher position.
“I’m looking at the $ 1,200 price point. We are within that range for the November series expiration. I would love to trade it with [Butterfly Spreads]. They are cheap, low risk, high reward, and they make some great fast trades,” he said.
Shay recommends trading the long-dated butterfly spread for Tesla – for example, buying 1,050 calls, selling 1,200 calls, and buying a second call for 1,350, which expires in November or December.
“The reason I say that even in December is because I like the Santa Rally and the January effect and the revenue in January,” he said in an email to CNBC. “January has been my best month for many years to come. It looks like a perfect storm, so I’ve got a lot of risk in December / January.
The move to $ 1,200 is approximately 17% higher than Tesla’s closing on Monday. It traded at almost $ 1,025 at the end of the session.
Ari Walt, Oppenheimer’s head of technical analysis, is confident in Tesla and agrees to a $ 1,200 goal with Shaw. Walt had previously called for a buyout on October 4 – which closed the session above $ 781.
“If there’s an investment advice we give our clients, it’s best to allow your winners to run, which is a winner,” Walt said during the same interview. “If you look at the stock, the latest strength we see in the table is higher than its January peak, and we think this breakout marks the resumption of Tesla’s long-term improvement.”
“That breakpoint at $ 900 is now support and measures to come to $ 1,200. We want more of that,” he said.
Tesla shares are up 45% this year.