JPMorgan Says Tesla Options Understate Risks in SEC Vs. Elon Musk
- Derivatives market has no volatility premium for legal events
- Buy puts to monetize the mispricing, strategist Quigg says
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Tesla Inc. is facing multiple legal events and rising key-man fears regarding billionaire CEO Elon Musk that aren’t being adequately priced into options, according to JPMorgan Chase & Co.
“The option market is embedding no volatility premium for upcoming legal events in the case of SEC v. Elon Musk,” strategists led by Shawn Quigg wrote in a note Monday. “Surprising given these fears previously caused a significant decline in Tesla shares and a surge in volatility to multi-year highs.”