How to trade Tesla options
Tesla options are popular financial derivatives, with many traders seeking to get exposure to Tesla’s share price movements. Here, we explain what Tesla options are, how much they cost and how to trade Tesla options.
What are Tesla options?
Tesla options are a financial derivative which enable you to trade Tesla stock at a set price (known as the strike price) before a predetermined date (known as the expiry). There are two main types of options to trade: calls and puts.
If you thought the market was going to rise, you’d buy a Tesla call option, but if you thought the market was going to fall, you’d buy a Tesla put option. In both cases, you have the right but not the obligation to buy Tesla shares at a set price, before a predetermined date.
Alternatively, you could sell Tesla call options or put options. You’d sell a Tesla call if you thought the price of Tesla shares was going to fall, and you’d sell a Tesla put if you thought the price was going to rise.
As the seller of a call option, you have the obligation to sell the underlying at the strike price if the buyer executes their right to buy. As the seller of a put option, you have the obligation to buy the underlying market at the strike price if the buyer exercises their right to sell.
Please bear in mind that selling options carries an inherently higher risk than buying them.
Learn more about trading options
With IG, you can trade CFDs on an option’s price. You never risk more than your initial payment when buying a call or put option, and you never need to deliver or take delivery of the underlying shares.
How much would it cost to trade Tesla options?
At IG, we offer weekly, monthly and quarterly pricing on share options. Their prices are determined by the price feed of an option exchange, around which we wrap an IG spread. Our spreads can often be tighter than those offered in the underlying market.
How to trade Tesla options
IG also offers options on other markets directly through our online trading platform – including options, forex, indices and commodities. Follow the steps below to get started:
- Create an IG trading account
- Learn about trading options
- Research the market you’d like to trade
- Take steps to manage your risk and learn about options Greeks
- Open, monitor and close your first position
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The information/research herein is prepared by IG Asia Pte Ltd (IGA) and its foreign affiliated companies (collectively known as the IG Group) and is intended for general circulation only. It does not take into account the specific investment objectives, financial situation, or particular needs of any particular person. You should take into account your specific investment objectives, financial situation, and particular needs before making a commitment to trade, including seeking advice from an independent financial adviser regarding the suitability of the investment, under a separate engagement, as you deem fit.
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