(Bloomberg) -- Tesla Inc. was the biggest point decliner in the S&P 500 Index on Monday, and options traders are betting the stock could drop further before the weekend.
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A put contract with a Friday expiration and a strike price of $200 was the most-traded contract for Tesla on Monday and among the 15-most popular on US exchanges overall during the day. The bearish option in the electric carmaker implies the stock has at least another 3% to fall this week.
Tesla hovered near $207 on Monday, down more than 3% from Friday’s close after lowering prices across its lineup in China and options investors are betting shares could fall below $200 by Friday, making the $200 put contract in the money -- or available for immediate profit -- before expiration.
The price of the contract jumped 66% on Monday as over 124,000 of the derivatives changed hands.
Tesla shares have been on a dizzying roller-coaster ride this year, as jumpy investors reacted to a wide array of both positive and negative news -- ranging from supply problems, demand concerns, production disruptions in China, a cash-strapped consumer and the looming global recession, to the promise of a big boost to the EV industry from the Biden adminstration’s climate act.
Overall though, the bad news has started to overshadow the good, reflected in the stock’s 41% decline this year, compared to the S&P 500 Index’s 21% drop over the same period. A three-for-one stock split, effective since late August, failed to deliver the expected boost despite Tesla’s popularity with mom-and-pop investors, while Elon Musk’s pending deal to buy social-media platform Twitter Inc. continues to be a drag on the EV maker’s share price.
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