Tesla Inc (NASDAQ:TSLA) Risk Points versus Consumer Discretionary (XLY)Date Published: 2017-04-5
This is a scatter plot analysis of the critical risk points from the option market for Tesla Inc (NASDAQ:TSLA) compared to its own past and the Consumer Discretionary ETF. In order to examine the forward looking risk for Tesla Inc (NASDAQ:TSLA) the next 30-days, we must look to the option market.
Now, before we dive into the analysis on TSLA, we make one critical note since we're talking about options:
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In the "Why This Matters" section at the end of this article on Tesla Inc (NASDAQ:TSLA) , we're going to take a step back and show in great specificity that there is actually a lot less "luck" in successful option trading than many people know.
But that's at the end, now let's jump back into the risk point charting and number crunching for Tesla Inc (NASDAQ:TSLA) . We start by noting that TSLA is in the automobiles and components sector which means along with some other industries we also compare the company to the closest match we could find, which was the Consumer Discretionary ETF (XLY) as a proxy for Tesla Inc.
We have highlighted the IV30® for XLY and for TSLA in the table below.
|CONTEXT: THE INDICES|
|S&P 500 (SPY)||IV30||10.56%|
|Nasdaq 100 (QQQ)||IV30||11.29%|
|Consumer Discretionary ETF (XLY)||IV30||10.46%|
|Tesla Inc (NASDAQ:TSLA)|
|TSLA 52 Week Low||IV30||27.76%|
|TSLA 52 Week High||IV30||57.87%|
|Tesla Inc Implied Risk Scatter Plot|
|(a new risk chart, built for option traders)|
Scatter Plot Risk Legend
The blue point is the current 30-day implied volatility for Tesla Inc.
The black point is the current 30-day implied volatility for the Consumer Discretionary ETF (XLY).
The red point is the 52 week low in IV30® for Tesla Inc.
The green point is the 52 week high in IV30® for Tesla Inc.
The various other scatter plot points in the middle give us risk context outside of the automobiles and components sector.
The IV30® is the risk reflected by the option market in the stock price for the next 30 calendar days.
* We can see that the risk as reflected by the option market for the next 30-days for Tesla Inc is above all the indices we have charted including the Consumer Discretionary ETF (XLY).
* We can further see that the current IV30 for Tesla Inc of 37.55% is closer to the annual low of 27.76% than the annual high of 57.87%. Simply stated, this means that the option market is pricing less risk than the average over the past year.
* For some context, we note that the annual range in IV30® for the Consumer Discretionary ETF is between [8.91%, 22.6%] while Tesla Inc has had a range of [27.76%, 57.87%].
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A New Kind of Risk Point Chart
This is chart was developed for the trader. It allows us to easily see where the forward looking risk for Tesla Inc (NASDAQ:TSLA) lies relative to the last year, and the various major stock groupings and the Automobiles and Components sector without using time series data, which can confuse the information.