How Options Strategist Sosnick Is Playing Tesla

The video discusses the SEC's increased scrutiny of Tesla following Elon Musk's tweet about taking the company private. It explores the volatility in Tesla's stock and its implications for options trading. The discussion includes an analysis of a volatility chart and a specific options strategy, highlighting the risks and potential rewards of trading Tesla options.

What prompted the SEC to intensify its scrutiny of Tesla?

• A major acquisition by Tesla

• A new product launch by Tesla

• Elon Musk's tweet about taking Tesla private

• A significant drop in Tesla's stock price

Why does elevated volatility attract options traders?

• It offers opportunities for high returns

• It indicates a stable market

• It reduces the risk of trading

• It simplifies the trading process

What is the difference between short-term and long-term volatility as discussed in the video?

• Both have the same level of stability

• Long-term volatility is more stable than short-term volatility

• Short-term volatility is more stable than long-term volatility

• Short-term volatility is less risky than long-term volatility

What is the purpose of selling in-the-money calls and hedging with higher strike calls?

• To avoid any market exposure

• To balance risk and reward

• To minimize potential gains

• To maximize potential losses

What is the significance of the $40 strike spread in the options trading strategy discussed?

• It guarantees a profit

• It makes the trade a 50/50 bet

• It eliminates all risks

• It represents a high-risk strategy