Tesla's stock has remained largely unchanged over the past two months, closing at $438.07 on January 2, 2026, similar to its November 6, 2025, level. Investors are capitalizing on this stability by selling out-of-the-money put options for yields up to 3.2%. However, HSBC analysts warn of a potential 70% downside, citing failures in standard vehicle variants.
Tesla Inc. (TSLA) shares have shown little movement in recent months. The stock closed at $445.91 on November 6, 2025, and at $438.07 on January 2, 2026, marking a flat performance despite a slight 1.77% rise from $430.46 in the prior month.
Amid this stagnation, options traders are finding opportunities in short out-of-the-money (OTM) put sales. For instance, a February 6, 2026, expiration put option with a $410 strike price—6.4% below the current close—offers a midpoint premium of $13.23. This translates to a 3.226% immediate yield for sellers securing $41,000 in collateral per contract, collecting $1,323 upfront. The breakeven point stands at $396.77, providing 9.4% downside protection from $438.07. A similar strategy in December 2025 yielded 2.637% on a $405 strike put, which expired worthless as the stock held steady.
Over two months, successive plays could accumulate $2,391 per contract, effectively lowering the breakeven to $386.09, or 11.9% below current levels. Proponents note that even if assigned, investors can sell OTM covered calls to offset losses without divesting shares. This approach suits both existing holders seeking income and new entrants waiting for a dip.
Contrasting this optimism, HSBC analyst Michael Tyndall maintains a Reduce rating with a $131 price target, implying a 70% decline from $438.07. He argues that Tesla's standard variants have failed to bridge market gaps, as outlined in a January 4, 2026, note. Risks include sharp drops leading to assignments and unrealized losses below breakeven, though cumulative premiums offer a buffer in flat conditions.
