Tesla (TSLA) Options Signal Bullish Bias: Calls at $490–$500 Dominate as Puts at $160–$260 Hedge Volatility – Here’s How to Play It

• TSLA trades at $436.11, down 4.15% from $455.00, with RSI at 77 (overbought) and MACD above signal line.
• Options data shows heavy call open interest at $490, $470, and $500, while puts at $160–$260 dominate for downside protection.
• Block trades hint at institutional positioning, with $3.8M in TSLA20250919C380 and $1.9M in TSLA20260116P410.

Here’s the takeaway: TSLA’s options market is leaning bullish, but the stock’s sharp intraday drop and mixed news flow mean traders need to balance optimism with caution. The key lies in reading the OTM call/put imbalance and aligning it with Tesla’s aggressive end-of-year incentives and regulatory risks. Let’s break it down.

Bullish Calls at $490–$500 vs. Defensive Puts at $160–$260: What’s the Play?

The options chain tells a story of conviction. For this Friday’s expiration, TSLA20251212C490 and TSLA20251212C500 have open interest of 29,730 and 16,330, respectively. These strikes are 8–10% above today’s price, suggesting traders expect a rebound or breakout. Meanwhile, puts like TSLA20251212P160 (OI: 43,885) and TSLA20251212P260 (OI: 39,254) are massive hedges—deep OTM but showing fear of a catastrophic drop. The put/call ratio for open interest is 0.85, favoring calls, but the sheer size of those puts warns of lingering bearish sentiment.

Block trades add intrigue. A $3.8M trade in TSLA20250919C380 (expiring in September) and a $1.9M bet on TSLA20260116P410 (January 2026) suggest institutional players are hedging long-term positions. But these expirations are too far out to impact today’s action. Closer to home, the next Friday’s TSLA20251219C960 (OI: 43,498) is a wild card—traders are betting on a massive rally, but it’s 119% OTM. That’s either optimism or noise.

News Flow: Incentives vs. Subsidy Cuts—Which Wins?

Tesla’s end-of-year incentives (0% APR, $0 down leases) are a short-term boost for deliveries, but Morgan Stanley’s downgrade and subsidy cuts in China/U.S. cast a shadow. The $425 price target hike from Morgan Stanley is a floor, but the bear case of $145 (if margins collapse) keeps puts in demand. Melius’ “must own” upgrade for autonomy dominance adds fuel, but regulatory hurdles for robotaxis and Optimus commercialization remain. The key here is execution risk: if Tesla hits Musk’s pay package milestones, bulls win. Miss, and the puts at $160–$260 could get tested.

Actionable Trades: Calls for Breakouts, Puts for Protection

For options traders, the most compelling plays are:

• TSLA20251219C450 (next Friday’s $450 call): A 3.3% OTM strike with 16,344 OI. If Tesla rebounds to $449.75 (intraday high), this call could gain 20%+ in a day. Entry: $436.11, target: $450–$460.
• TSLA20251219P225 (next Friday’s $225 put): A 48% OTM strike with 23,880 OI. If the stock drops below $429.73 (30D support), this put offers downside insurance. Entry: $436.11, stop-loss: $435.25 (intraday low).

For stock traders, consider:

• Buy near $429.73 (30D support) if the price holds. Target: $449.75 (intraday high) or $462.16 (Bollinger Upper Band). Stop-loss: $423.07 (middle band).
• Short-term dip buyers could enter at $435.25 (intraday low) with a tight stop above $436.11.

Volatility on the Horizon: Balancing Bullish Momentum and Bearish Hedges

Tesla’s options market is a tug-of-war between bulls eyeing a $500+ rebound and bears bracing for subsidy cuts. The technicals (bullish Kline, MACD above signal line) and incentives suggest a near-term bounce is possible, but the puts at $160–$260 show the market isn’t ready to dismiss a crash. Traders should treat this as a high-conviction, high-risk setup: go long with calls if the stock holds support, but keep a tight stop or a put hedge. The next 48 hours will test whether Tesla’s rally is real or a bear trap.