Traders race into Tesla ahead of investor day, but will the gains hold?

Meanwhile, let's switch over to Tesla, the stock is accelerating higher, rising more than five percent today, bringing its plays to a staggering 68 for the year and it's only February, the electric vehicle maker

will

hold

its

investor

day on Wednesday at its gigafactory in Austin, so what role or options and Retail

investor

s are playing in this big

race

before we get to that Tim, what do we expect? Do you think I mean we could get upgrades to their battery technology to 460 80. The operating margins of the 4680 battery technology is a cheaper model? Well, there are things that

will

move.

The rising needle and the risk reward for me will come, but I think the things that would be the excitement in the fireworks certainly also revolve around a model that would be the affordable car for the mass market, which would really be the battery of global automobile. and then even some update on China. I think the issue of China demand has been very misunderstood at times because China has been going down, there has been some demand or delays have decreased, there has been a sense that China demand has gradually fallen. truck, but I mean the stock has rallied tremendously, yeah, and their volumes are, I mean Mike discounts have really worked well, yeah, I mean, that's the interesting thing we're talking about a value car. global price, the interesting thing is that now that they have discounted the prices and we are seeing that you know your eligibility for that federal tax credit refund.

The Model 3, which is their current entry-level car, is actually quite competitive with the average price of a car sold in the United States right now. uh, you know, you're not talking. about an immensely expensive car, if you're talking about that one, obviously, you get to the checkered Model S and things like that, it's a much more expensive vehicle, but the car manufacturer is affordable for you, we'll call it middle to upper middle class. homes if you are interested in purchasing one, but I will also say that there is a buildup of inventory and I can see it on the lots.

Let's get more now from CNBC contributor gunjan Banerjee, she is the lead writer for the Wall Street Journal's live markets coverage, gunjin. To have you with us, you've written extensively about Tesla over the year and the booming options have been simply astronomical. The role of the retail investor, although in this increase has been pronounced, is it not so true? Melissa and what a shame this action. As you said, the nearly 70 percent rise we're seeing during this run is individual investors doubling down on the stock. It is by far the most popular purchase among individual investors. According to some research data from Vanda this year and Single-day stock purchases hit a record this year, so when Tesla had one of its worst years on record, you saw people saying, "Hey, I'm going to double the "Bet it, I'm going to buy the dip in Tesla stock and so far it's paid for." This year in terms of the activity going into the investor meeting, I imagine a lot of investors are hoping that Elon Musk has some kind of rabbit to pull out of the hat, no matter how many rabbits or the size of the rabbit, he always has one, always It's, it's always a rapper, so the expectation is a lead-up to the event and then it's an event to sell the news.

I mean, I think that's the consensus at this point, is that who you are. seeing in the options market what was really fascinating today as the stock went up, you know, five six percent is a lot of the most popular regular trades were those tied to the stock jumping even higher until Friday, you know, it was 220 calls , 225 calls, so that shows. You know that many investors were turning to the options market to bet on a continued rally in Tesla stock and let's not forget that Tesla calls have been one of the most popular trades in the entire options market.

Tesla options know that the market has just grown tremendously. year, people have spent over half a trillion dollars on Tesla options over the past year, making it the most popular option across the market and that was certainly on display today as the stock rose, especially as shorts they were down, you know, seven and a half billion dollars in this calendar year, depending on how you measure that, but I mean that's the other side of this, it's been a painful, painful place for shorts, definitely after a rare victory for the shorts last year that seemed to be short. -lived safely I mean, this seems almost I mean, obviously, Tesla is too big to be, but it seems almost like a meme sucks.

I'm just wondering dungeon, you know when you talk to people and you're reporting, is it the opinion of? Does the durability of Tesla's rally change at all knowing there is such a fervent retail base? Yes, I think that's what makes it such a difficult stock to value for individual and institutional

traders

, that's what made it such a painful short position. because I think a lot of bearish investors underestimated that passionate field and what I hear from investors that I talk to is, hey, this is the next apple, you know, Tesla cars like the iPhone and I don't, I'm not selling to Even though the stock had its worst year on record, so I think that makes it a very, very tough trade for a lot of institutional investors, but it's part of what makes so many individual investors excited about the stock because they have this community. of

traders

that's kind of having Diamond hands next to them attention thanks great to have you with us thanks in Banerjee from the Wall Street Journal um boy does it change your point of view?

I mean, not only is there a really loyal and fervent retail share

hold

er base, but you know Global Mobility had a survey showing that their owners, the Tesla owners, are extremely loyal and that any damage to the brand that Elon Whatever Musk has caused with his escapades over the past year, let's put it that way, he may have been overtaken at this point. Yeah, I mean, there's no doubt that their current owners are loyal, but you know what they need is new owners. They need to continue growing. It's a $650 billion company and the loyalty people have had to the stock.

You know they were loyal along the way from where the stock disintegrated. 450 approximately on November 21st up to 100 dollars. I mean you tested your loyalty on the stock, even with this run of 100 it's still 50 or so away from its all time high so keep things in perspective here 225 was the 200 day moving average I got there again you know that I'm more of the camp than we are, we sort of gravitated towards 165, which is about a 50 ret

race

ment of this move and we'll see, yeah, I think the technical is a push that When you're referring to someone, they're really the ones going to lead stock trading and you know it's an old question whether valuation matters or not, and I would say yes, unless you're trading Tesla or meme stocks as they seem. be absent from the evaluation in terms of, you know, the investment decisions that come from the retail community.

What I will say is that what you're seeing is retail traders becoming more proficient at using options, so I and I think that can prepare itself is actually a situation where institutions can finally trade this in a way. profitable, even if they are not going in the right direction, it will probably lead to dislocations and implied volatility and that is, honestly, where the Institutional investor probably has an advantage