Bearish Options Play on Tesla Unveiled by TSLA Skeptic

OptionsPlay analyst Tony Zhang, who’s very pessimistic about Tesla (TSLA) and its stock, unveiled a bearish options play on the name today on the Schwab Network.

Why Zhang Is Bearish on TSLA Stock

Tesla’s valuation is “incredibly rich,” and the automaker is losing market share to its Chinese competitors in Europe, Asia, and the U.S., Zhang stated.

Moreover, the automaker is likely to be hurt by the deterioration of consumer confidence in the U.S., while the performance of its shares will probably be undermined by the stock market’s weakness, Zhang contended.

Also importantly, the company’s Q1 deliveries came in significantly below expectations, the analyst noted.

Zhang’s Bearish Options Trade

The analyst recommended that traders buy May 2 puts with a $255 strike price and sell May 2 puts with a $210 strike price. Traders who use this strategy will pay net premiums of $15 per spread.

The Recent Price Action of TSLA Stock

In the last month, the shares have fallen 2%, and they are down 38% in the last three months. Over the last year, however, they have jumped 41%.

While we acknowledge the potential of TSLA, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. There is an AI stock that went up since the beginning of 2025, while popular AI stocks lost around 25%. If you are looking for an AI stock that is more promising than TSLA but that trades at less than 5 times its earnings, check out our report about this cheapest AI stock.

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Disclosure: None. This article is originally published at Insider Monkey.