Analyst Recommends Tesla June 5 Call Spread for 7% Move
TSLA•An equity derivatives strategist suggests using Tesla options as a proxy for the upcoming SpaceX IPO, recommending a June 5 250/260 call spread to capture potential 7% stock gains and fivefold returns. He warns S&P 500 implied volatility could rise if SpaceX enters the index under relaxed inclusion rules.
1. Index Inclusion Implications
Index providers are reviewing S&P 500 inclusion rules, potentially reducing the seasoning requirement from 12 to 6 months and lowering float restrictions to accommodate a near-$2 trillion SpaceX IPO. If SpaceX qualifies as a top-five market cap name, its entry could boost S&P implied volatility by displacing lower-volatility stocks.
2. Tesla as Proxy Strategy
Tesla shares have seen unusual weekly call buying in recent sessions, with traders viewing the EV maker as a proxy for SpaceX due to disclosed product purchases and speculation of deeper corporate ties. Historically, Tesla moves 3–4% per day, making it a liquid vehicle for expressing bullish views on megacap tech volatility.
3. Recommended Option Trade
The strategist recommends a simple June 5 250/260 call spread on Tesla, noting that a 7% stock rise would yield approximately five times the premium. He cautions against trading on the actual IPO date, instead focusing on the run-up period to balance risk and maximize potential returns.
