Tesla just last month topped the $1 trillion mark
It’s become part of the norm to see powerhouse corporations surpass the million, billion, and now even trillion-dollar market cap levels. This is a topic we like to circle back to often, as the ever-changing and ever-growing market continues to shock investors -- especially within the "Big Five" sector. Specifically, household names Microsoft (MSFT), Tesla Inc (NASDAQ:TSLA), Alphabet (GOOGL), Amazon.com (AMZN), and Facebook (FB) all run in the billion or trillion-dollar market-cap area, with one name in particular making its own record-breaking advancement within the past several weeks.
Specifically, Tesla just last month topped the $1 trillion mark, joining its peers Microsoft, Apple, and Google, in the breakout above the billion-dollar cap. This impressive feat sent the stock to record-breaking highs.
In the past, backing the "Big Five’s" consistent and record-breaking surge in market value has been earnings, but several have served up a disappointing post-earnings pallet in the latest quarter. Elon Musk’s Tesla was not one to dissatisfy however, rolling out a third-quarter earnings and revenue beat. Subsequently, since its reporting on Oct. 20, the electric vehicle powerhouse has added $350 billion to its aforementioned market-cap value, thus, catapulting the vehicle maker past the infamous $1 trillion mark. As a broader comparison, Microsoft, Apple, and Google sport market caps of $2.5, $2.4, and $1.9 trillion, respectively.
How are options traders responding to these developments? Per the chart below that was provided by Schaeffer’s Senior Market Strategist Chris Prybal, the combined ratio tumbled to 0.367 after Thursday’s close. The combined buy-to-open put/call volume ratio for the "Big Five" is now at its lowest mark since early October and also represents half the ratio’s 12-month peak of 0.75, which it reached in early April. A shift higher could be on the horizon if "Big Five" sector cools off before the holiday season, but the churning market volatility should signal traders to keep any uncalculated risk at bay with the plethora of options strategies available designed to combat such price action.
Subscribers to Chart of the Week received this commentary on Sunday, November 7.