Tesla stock gains as options traders price in ~6% post-earnings swing

Tesla (TSLA) shares charged higher by over 3% in Tuesday morning trading, hovering around the $383-per-share mark as investors brace for the electric vehicle maker's highly anticipated second-quarter earnings report scheduled for Wednesday after the closing bell.

Analysts expect Tesla (TSLA) to report revenue of $26.4B, EPS of $0.54, and automotive gross margin excluding credits slightly above 18%. Beyond the core numbers, investor attention will once again center on the updates on autonomy, software, the robotaxi rollout, and AI4-AI5 chips, as well as the capex needed for the company to be a leader in physical AI.

With shares gaining momentum heading into the print, Wall Street's attention has shifted to the options market, which is pricing in a decisive post-earnings move. Options contracts expiring Friday suggest traders are anticipating a roughly 6.4% swing in either direction following the earnings release. By assessing the at-the-money straddle at the $382.50 strike, the combined cost of the near-term call and put options implies a price swing of around $24. This sets up a potential Friday settlement range between $359 and $407, framing the immediate battleground for both bulls and bears.

On the call side of the options chain, bullish speculation is heavily concentrated at the $400 psychological level. This strike boasts a massive open interest of 14,629 contracts and a towering intraday trading volume exceeding 15,400 contracts. Should Tesla (TSLA) management assuage margin fears and deliver a compelling update on their AI and Robotaxi initiatives, the $400 level represents the primary upside target and near-term resistance.

Heavy near-the-money volume is also swirling around the $380 and $390 call strikes, signaling intense short-term positioning as traders try to front-run a potential breakout.

Conversely, the put side of the chain reveals aggressive downside protection. Active hedging is evident at the near-the-money $380 put strike, which commands an open interest of 5,198 contracts and strong intraday volume. Further down the chain, the $300 strike serves as a formidable structural floor, holding over 10,700 contracts in open interest. Intriguingly, there is a staggering accumulation of deep out-of-the-money put contracts, with the $150 strike harboring an open interest of more than 37,000.

Given the near-term expiration and the 6.35% expected move, these deep downside bets likely represent broad portfolio hedging or institutional tail-risk protection rather than outright earnings speculation.

Ultimately, while structural hedging lurks in the deep waters of the options chain, the immediate post-earnings narrative will likely be decided in the $359 to $407 channel.