A wave of retail traders flooded Tesla’s options market on a recent trading day, zeroing in on June 2025 call contracts with a $330 strike price. The activity was striking: 40,739 contracts traded by 11:32 AM ET, representing 7.2% of Tesla’s total daily options volume and the highest single-contract concentration for the session. This surge far exceeded typical daily options activity, signaling something unusual was happening in the market.
The trading pattern revealed dominant retail participation. About 67.3% of the contracts were bought rather than sold, and 80% of trades came in lots smaller than 20 contracts. This small-account activity drove the majority of order flow, while institutional investors played only a minor role with roughly 20% of the related volume.
The timing wasn’t random. Implied volatility had dropped 16.5% during the peak volume period, creating what many traders perceived as a bargain opportunity. Curiously, call premiums actually rose even as volatility fell, an unusual combination that attracted retail attention. This activity occurred as Tesla’s stock recovered from earlier lows and Elon Musk signaled renewed commitment to the company. The large out-of-the-money trades demonstrated confidence among traders placing selective bets on Tesla’s future performance.
The $330 strike reflected a specific strategy. It sat below Tesla’s prevailing price of $458.91 and aligned with the company’s anticipated 2025 product cycle milestones. The June expiration offered a 12-month time horizon, balancing lower costs against medium-term upside potential. Yet Tesla’s operating margins have dropped to sub-5%, creating a fundamental disconnect between investor optimism and operational reality.
However, history suggests caution. Past retail surges following IV drops have frequently fizzled without sustained stock movement. Option sellers have historically gained advantages in flat markets. Adding to the uncertainty, Tesla’s 30.56% year-over-year EPS decline contradicts the bullish positioning, and the company’s trailing revenue has fallen 2.1%. Tesla’s rapid depreciation rate of 71% over five years further complicates the company’s value proposition as vehicles face obsolescence from continuous software updates and battery technology improvements.
Supporting evidence from the broader option chain showed 18,000-plus March 2026 $880 call contracts traded and significant concentrations in $445-$450 strikes following Q3 earnings. Traders also purchased December 2026 options for over $100,000 in premiums.
Despite this options market enthusiasm, Stocktwits sentiment remained neutral, creating a curious disconnect between retail options activity and broader investor sentiment.