Tesla Sees Heaviest Sell-Off in $170 Calls as EV Maker Cuts 10% of Workforce

Tesla is seeing the heaviest sell-off in $170 call options since at least October at a time when the electric vehicle giant is reportedly cutting more than one-tenth of its global workforce amid a slowdown in EV sales growth.

More than 75,800 call options giving the holder the right to buy Tesla shares at $170 each by the end of this week, according to data compiled by moomoo. Volume more than tripled from about 21,800 last Friday as the price of such option tumbled more than 60%.

Tesla shares sank 3.1% to $165.82 around noon in New York amid media reports of the job cuts that could affect at least 14,000 workers worldwide. The layoffs were reportedly announced in Tesla Chief Executive Elon Musk's email to employees where he cited the need for the EV maker to cut costs and boost productivity.

News of the layoffs came after the company earlier this month reported its first year-on-year decline in quarterly deliveries in 2020 as demand for electric vehicles start to wane with consumer preference shifting to hybrids.

Even those with millions of dollars to spend are also joining the action in the options market. At 9:55:26 a.m. in New York, a block trade was posted with the buyer paying a premium of $3.09 million for put options that give the holder the right to sell 300,000 Tesla shares at $175 each by the end of this week.

Another block trade was posted at 9:55:49 a.m. in New York where the buyer paid a $1.64 million premium for the right to sell 193,000 shares at $172.50 reach by the end of this week. At that exact time, another block trade was posted, this time for call options that give the holder the right to buy 100,000 Tesla shares at $167.50 at the same expiration date. The seller stands to collect a $270,000 premium for that trade.

Negative investor sentiment has engulfed Tesla this year amid weakening demand for electric vehicles, sending the stock tumbling 33% in 2024. Still, four of the 15 technical indicators tracked by moomoo are leaning positive, signaling to some traders who study charts that the trend could be poised for a reversal.