Tesla One-Week ATM Volatility at 45%, No Cheap Options Available
Tesla one-week at-the-money options carry 45% implied volatility, placing them in the 40th percentile of their 52-week range and outside the bottom 20% “cheap” threshold. Since 2024, “cheap” ATM calls averaged 9.8% returns per trade versus 1.6% for “expensive,” while “cheap” puts returned 1.3% versus -3.0%.
1. Market Uncertainty Drives Broad IV Increase
Geopolitical tensions, including the conflict in Iran, have elevated uncertainty in equity markets, driving up implied volatility levels across most stocks. This surge has eroded the availability of one-week at-the-money options with IVs in the bottom 20% of their 52-week historical range.
2. Tesla's Elevated Implied Volatility Level
Tesla’s one-week at-the-money call option implied volatility stands at 45%, ranking in the 40th percentile of its own 52-week readings. This level places Tesla well above the threshold defined for “cheap” options, indicating relatively high cost for short-dated option plays.
3. Historical Performance of Cheap vs Expensive Options
Analysis since 2024 shows that at-the-money calls in the cheapest IV bucket averaged 9.8% returns per weekly trade, compared with just 1.6% for options in the most expensive bucket. Similarly, cheap puts yielded 1.3% on average, while expensive puts lost 3.0%.
4. Absence of Cheap Options for March 27 Expiry
For options expiring on March 27, no stocks—including Tesla—have at-the-money IVs in the lowest 20% of their annual range. As a result, traders seeking one-week “cheap” option opportunities currently find no qualifying contracts.