Tesla's Earnings: Selling a cash-secured put

Tesla (NASDAQ: TSLA) is scheduled to report second-quarter 2026 earnings on 22 July 2026 after the market close. Consensus estimates compiled by the company point to revenue of approximately $27.6 billion and GAAP earnings per share of approximately $0.50. The company's previous quarterly report showed revenue of $22.39 billion and EPS of $0.41.

Ahead of earnings, investors are closely watching vehicle deliveries, growth in the energy storage business, and updates on autonomous driving initiatives and robotaxi deployment.

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What is a Cash-Secured Put?

A cash-secured put is an options strategy where you sell a put option and receive a premium upfront.

In exchange for receiving that premium, you agree to buy 100 shares of the underlying stock at the strike price if the option holder chooses to exercise the contract or if the option finishes in-the-money at expiry.

Because you may be required to purchase the shares, you set aside enough cash to fund that potential purchase. This is why the strategy is known as a cash-secured put.

Some investors use cash-secured puts when they would be happy to own a company at a lower price than the current market price and are willing to accept the risks involved.

A Real-World Example with Tesla

Suppose you'd be happy to buy Tesla shares, but only if they declined to a lower level.

Using the option contract expiring 24 July 2026, you could sell a $365 put and receive approximately $6.48 per share in premium, or $648 for one standard options contract covering 100 shares.

To secure the position, you would set aside:

$365 × 100 = $36,500

Because you collect $648 upfront, your effective purchase price becomes:

$365.00 − $6.48 = $358.52 per share

This effective purchase price also represents the approximate break-even level at expiry.

Additional contract details:

• Strike price: $365

• Premium received: $6.48

• Delta: -0.26

• Implied volatility: 78.23%

• Open interest: 1,816 contracts

• Expiry: 24 July 2026

How Could This Play Out?

If the share price stays above the strike price:
The option expires worthless and the premium received becomes the realised outcome.

If the share price finishes below the strike price:
You may be assigned 100 Tesla shares at $365 per share, but the premium lowers your effective acquisition cost to $358.52.

If the share price falls substantially below the strike price:
The premium provides only limited downside protection. You still own shares purchased at the strike price and could face meaningful unrealised losses if the stock declines significantly.

What are the risks?

Tesla faces several company-specific risks heading into earnings.

Recent investor attention has focused on whether strong vehicle delivery figures can translate into improved profitability and margins. Market participants are also looking for updates on robotaxi initiatives, autonomous driving technology, expanding energy-storage deployments, and future capital spending plans.

Competition remains intense in the global electric-vehicle market, particularly from large Chinese manufacturers. Investors also continue to debate how quickly Tesla's newer initiatives, including autonomous transportation and robotics projects, can contribute meaningfully to financial results.

From a strategy perspective, the primary risk is that the share price falls sharply after earnings. While the premium provides some protection, it does not eliminate downside risk. A cash-secured put should therefore only be considered if you are genuinely comfortable owning the shares at the effective purchase price.

Why might this appeal to a long-term investor?

Some long-term investors use cash-secured puts because they would be willing to own a company, but only at a lower entry price.

The strategy allows them to:

• Generate premium income while waiting.

• Potentially acquire shares at a lower effective cost basis.

• Define in advance the price at which they would be prepared to become shareholders.

However, the trade-off is that the investor accepts the obligation to purchase shares if assigned, regardless of whether the earnings reaction is positive or negative.

Key Definitions

Strike Price
The agreed price at which shares may be purchased if assignment occurs.

Premium
The amount received upfront for selling the option.

Assignment
The process through which the put seller is obligated to buy shares at the strike price.

Expiry
The date on which the option contract ceases to exist.

Break-Even Price
The strike price minus the premium received. In this example: $358.52.

Cash-Secured
Having enough cash set aside to purchase the shares if assignment occurs.

Implied Volatility
A measure of the market's expectation of future price movement. Higher implied volatility generally leads to higher option premiums.

Open Interest
The number of outstanding option contracts that remain open in the market.