Are put options undervalued for Tesla. The following article lists 6 reasons why they are. Check it out, but also do your own research before you add any to your portfolio.
I would not advocate a “short” position in Tesla (TSLA) as the company has the potential for an explosive upside – primarily because of the large short position in Tesla. Although short sellers typically do far more homework than other investors and initiate a short position for extremely solid reasons, even a temporary short-covering rally could get ugly. For less risk-averse investors who are exploring Tesla and think that it might be “out over its skis a wee bit,” there are at least six risk premium drives that explain why Tesla put options look dramatically undervalued relative to the risks.
It is likely that there will be other issues that surface [if only because Tesla is a brand new company doing things that are almost impossible and it is an inherently speculative stock issue]. The reports of how Tesla Roadsters must be plugged in or they turn into “bricks” OR the charges that Tesla tries to smear whistleblowers OR the news that independent testing by the Top Gun track showed that a Tesla Roadster has a range of only 55 miles are hardly the only challenges that the company faces. In a nutshell, investing in either Tesla stock or in a Telsa automobile is much more risky than a respective investment in another automobile manufacturer.
Risk #1: Investors do not seem to be adequately factoring in…
Continued on SeekingAlpha.com
