Tesla stock has spent nearly a year going sideways. Wednesday's earnings could finally break the stalemate.
Stockholders can buy protection against a drop — though the cost of that insurance may be nearly as important as the protection itself.
That protection can come from a put option. A put gives its owner the right, but not the obligation, to sell a stock at a fixed price before a set date.
One way to build that protection is to buy one July 24 put with a $375 strike price against 100 Tesla shares already owned. The strike is the price at which the shares can be sold, while July 24 is the expiration date — the final day that right exists.
One standard stock-option contract generally covers 100 shares.
#nearly #option
Stockholders can buy protection against a drop — though the cost of that insurance may be nearly as important as the protection itself.
That protection can come from a put option. A put gives its owner the right, but not the obligation, to sell a stock at a fixed price before a set date.
One way to build that protection is to buy one July 24 put with a $375 strike price against 100 Tesla shares already owned. The strike is the price at which the shares can be sold, while July 24 is the expiration date — the final day that right exists.
One standard stock-option contract generally covers 100 shares.
#nearly #option
3 months ago
