Tesla Inc (TSLA) stock has been falling over the past month. That has pushed up put option premiums. That makes them attractive to short-sellers. For example, just ove one month away puts at strike prices 10% lower have a 2.0% short-put yield.
Meanwhile, analyst price targets are significantly higher. That could provide significant upside to value investors. One way to play this is to short out-of-the-money (OTM) puts.
TSLA stock – last 3 months – Barchart – April 2, 2026
TSLA closed at $360.59 on April 2, down 11.1% from $405.94 on March 4, a month ago. However, it’s up slightly (+1.5%) from a recent low of $355.28 on March 30.
Could TSLA go lower? Possibly, but setting a lower potential buy-in point and getting paid to wait is one way to play it. That’s what happens by shorting OTM puts.
Analysts surveyed by Yahoo! Finance show an average price target of $417.08 per share. That’s 15.7% higher than its close last week of $360.59. However, it’s down slightly from a month ago, when I reported that the average of 46 analysts was $421.61.
Similarly, Barchart’s mean price target survey price is $405.64, although it’s lower than $408.36 a month ago.
The point is that analysts still see good upside in TSLA stock, albeit a bit less than before. Nevertheless, there is no guarantee TSLA will rise to these prices anytime soon.
As a result, it makes sense to set a lower potential buy-in by shorting out-of-the-money (OTM) puts.
I discussed this play last month in a March 6 Barchart article, “Tesla Put Option Premiums are High – Attractive to Short Sellers and Value Investors.”
For example, I suggested shorting the $370 and $375 put options expiring April 10. The premiums were $10.98 and $12.40, yielding 2.97% and 3.31%, respectively, at 7% and 6% lower strike prices when TSLA was at $398.88.
Today, those premiums are $13.63 and $15.33, i.e., slightly higher, as the puts are “in-the-money.” It makes sense to roll these trades over by buying them back at a loss with a new short-put trade for May. (The loss for…
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