Tesla’s Earnings Report: Can Options Traders Cash In on the Big Move They’re Betting On?

As Tesla gears up to release its Q3 earnings on Wednesday, options traders are placing big bets, with implied volatility pointing to a potential 5-8% price swing. The market is bracing for a major move, as contracts around the $200 strike are seeing significant action. But will Tesla deliver enough to meet the lofty expectations?

In Q2 2024, Tesla posted $24.9 billion in revenue, driven by a 15% year-over-year jump in vehicle deliveries to 466,140 units. However, shrinking gross margins—falling to 18.2% from 20.3% a year earlier—have become a concern for investors. Soaring raw material costs and supply chain pressures are putting Tesla’s profitability under strain. These rising expenses, paired with growing competition in the electric vehicle (EV) market, are causing some to wonder whether Tesla can maintain its rapid growth while controlling costs.

Tesla’s stock price has shown resilience, bouncing back 4.7% after Q2, but the upcoming earnings report could determine whether that upward momentum continues. Traders are closely watching to see if Tesla’s impressive delivery numbers can offset these challenges. With the global EV market becoming more competitive, and geopolitical risks in key markets like China and Europe, there’s a lot at stake.

The Q3 earnings will also give insight into how Tesla’s AI and Full Self-Driving (FSD) technology, which it continues to push, are impacting revenue and profit margins. In Q2, Tesla continued to make strides in AI-driven automation and its energy storage business, deploying a record 9.4 GWh of storage, but the big question remains—can these innovations help Tesla navigate rising production costs?

Options traders are betting on a substantial stock move, with strong activity in both calls and puts. If Tesla delivers strong earnings and shows progress on controlling costs, the stock could see a sharp jump. On the flip side, any sign of faltering on the delivery front or continued margin compression could trigger a downside move, rewarding those betting against the stock.

As Tesla’s Q3 earnings report approaches, the market is bracing for impact. With traders positioning themselves for volatility, Tesla’s ability to balance growth with cost management is under intense scrutiny. Will the company live up to the hype, or will its soaring costs and competitive pressures weigh down its stock? Either way, it’s going to be a wild ride for both investors and traders this week.