President Donald Trump will announce his reciprocal tariff push on Wednesday during an event in the White House Rose Garden. Trump’s tariffs target imported vehicles/parts. While Tesla produces domestically, CEO Elon Musk warns of “significant impact” due to reliance on foreign components.
Tesla’s implied volatility is at 96.3% for April 4 puts, favoring sellers. Post-announcement IV collapse (if tariffs are benign) could reduce premium attractiveness but lower assignment risk. Let’s dive into the potential sscenarios and related options strategies.
US Automakers Make Mad Dash to Persuade Trump to Temper Tariffs
$Ford Motor Co.(F)$, $General Motors Co.(GM)$ and Stellantis NV are lobbying the administration to exclude certain low-cost car components from the planned tariffs, contending that levies on the thousands of parts they source abroad could have catastrophic effects on the industry.
Trump has billed April 2 as the launch of sweeping duties that are the centerpiece of his plan to rebalance global trade, boost US manufacturing and inject tariff revenue into government coffers to fund domestic priorities, including a major tax cut.
Uncertainty surrounding his plans, which have often changed and been subject to last-minute carveouts. When asked Monday if he was planning a universal tariff or levies on individual countries, Trump demurred, saying “you’re going to see in two days, which is maybe tomorrow night or probably Wednesday.”
“They’re reciprocal. So whatever they charge us, we charge them, but we’re being nicer than they were,” he said. “They took advantage of us, and we are going to be very nice by comparison to what they were. The numbers will be lower than what they’ve been charging us, and in some cases may be substantially lower.”
Technical indicators show Tesla’s support level stands at $235 as of March 31 while Tesla stock is at around $268 in premarket trading on Tuesday, so it’s reasonable to sell Tesla’s OTM puts to generate income.
Options Strategy: Sell OTM Puts
Example: $235 strike put (4/4 expiry). Open interest of 3,670 indicates liquidity.
Investors will not be assigned if the stock price exceeds $235 on the expiring day. The chance that you walk away with pure income is 82%.
Source: Tiger Trade App
Trump Says He Expects Musk to Eventually Return to Running Companies
President Trump said he expects Elon Musk will eventually return to running his companies after his work overhauling the federal government, which may give a boost to Tesla shares.
A reporter noted that Musk, the CEO of Tesla and SpaceX, is a special government employee, which means he can only work for 130 days in his role. When asked if he wants Musk to stay longer, Trump said he will want to return to his companies.
“I think he’s amazing but I also think he’s got a big company to run. At some point he’s going to be going back. He wants to,” Trump said. “I’d keep him as long as I can keep him. He’s a very talented guy.”
Musk has been working to improve the image of his Department of Government Efficiency (DOGE) after becoming a boogeyman for the administration due to his cost-cutting push. Teslas have been vandalized and the company’s stock has plummeted, while the White House and Trump have gone to bat for the company.
Tesla Deliveries Likely Fell as Competition, Musk Backlash Surge
Tesla investors are bracing for a drop in first-quarter vehicle deliveries as a backlash against CEO Elon Musk's politics exacerbates weakening demand for the electric vehicle maker's aging lineup.
Musk promised Tesla would return to growth this year after its annual deliveries fell for the first time in 2024, and Wall Street will be watching to see how a refreshed Model Y SUV and incentives made a difference.
Tesla is set to report its first-quarter deliveries and production numbers on Wednesday. Its shares were up around 4% in premarket trading on Tuesday and have fallen 36% this year.
Wall Street expects Tesla to have delivered about 373,000 vehicles in the January-March period, according to an average of 15 analysts' estimates from Visible Alpha that were refreshed in the past 30 days to reflect growing demand concerns. That would be a 3.6% drop from the same period a year ago, when it delivered 386,810 vehicles.
Options Strategy: Bear Put Spread (Hedged)
Buy $250 put / Sell $240 put → Net debit ~$2.85.
$TSLA Vertical 250404 240.0P/250.0P$
Limits downside to $10-wide spread.
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