The battle between Tesla's bulls and bears tests the faith of investors.
With the 'trillion-dollar compensation' settled, what direction will Tesla take in the next phase?
Summary: The biggest uncertainty crisis in the short term has been resolved; during the current 'policy vacuum period,' if market volatility intensifies in the short term, confidence in momentum stocks may be more vulnerable; over the medium to long term, stock prices will continue to revert to fundamentals and event-driven dynamics in car manufacturing; challenges in car manufacturing remain significant in the fourth quarter—attention should be paid to whether progress in plans related to autonomous driving, robotics, etc., meets expectations and their potential catalytic impact on stock prices.
Last night, Musk's new round of CEO compensation incentive plan was approved with over 75% of the votes in favor.
The market reacted swiftly to the outcome, $Tesla (TSLA.US)$ The stock price rose more than 3% in after-hours trading. The market widely regarded this approval as a confirmation of the stability of the company’s leadership, indicating that investors are willing to continue betting on Elon Musk's long-term vision.
Incentivizing Musk is equivalent to betting on Tesla's future.
Although entities such as the Norwegian sovereign wealth fund (NBIM) and the California Public Employees' Retirement System (CalPERS) explicitly voted against the proposal, their overall shareholding remains limited in proportion.
The final decision hinged on the votes of a vast number of individual investors.Survey results indicatethat over 70% of individual investors supported the compensation plan.In the 2024 vote concerning the previous compensation scheme, individual investor support was also as high as 90%, making them the decisive force.
Due to the market's generally optimistic expectations beforehand.The forecasting website Polymarket showed prior to the meeting that the probability of the proposal passing was as high as 93%.When the news was finally confirmed, the stock price reaction was relatively muted.
Achieving $1 trillion is not so easy.
The approval of this resolution means that if Elon Musk achieves various market capitalization and operational milestones set by the plan (see chart below) over the next decade, he will gradually receive approximately 423.7 million restricted stock units (RSUs), equivalent to 12% of the company's total shares, with a theoretical maximum value of about $1 trillion; if the goals are not met, the corresponding rewards will lapse.
Tesla’s disclosed equity structure prior to the meeting shows that Musk and his trust account for approximately 14%,and if all performance targets are unlocked, it would mean that Musk's total controlling stake will reach 26%.
The company’s deeper strategic intent is to establish clear operational and financial objectives,Deeply align Elon Musk's personal interests with Tesla's long-term development,alleviating investor concerns about his divided attention between xAI and SpaceX.
– Unlocking conditions: target market capitalization for the corresponding phase + any remaining performance target
– Safeguard conditions: The market capitalization must be maintained above the target for three consecutive months; performance targets must be achieved for four consecutive quarters; if Musk leaves, the unvested portion will become invalid.
However, even if the plan is approved, it does not necessarily mean smooth sailing ahead.Reviewing the 2018 plan, although it was initially passed with a 73% approval rate, it faced challenges in Delaware court. In 2024, after a re-vote, its legal status remains unresolved.
The largest short-term uncertainty crisis has been lifted.However, fundamental positives often diverge from short-term market sentiment,The optimistic signals from the shareholders' meeting may have been priced in advance, while implementation details and legal uncertainties still warrant attention.
With the compensation plan passed, what’s the outlook for the next phase?
Last night, high-beta momentum stocks on the US stock market, including Tesla, plummeted,AI stocks led the declines. $S&P 500 Index (.SPX.US)$ Falling more than 1%, $Nasdaq Composite Index (.IXIC.US)$ dropping nearly 2%, $CBOE Volatility S&P 500 Index (.VIX.US)$ Rapid upward movement, with strong risk aversion sentiment, and selling pressure persisted until the closing bell.
Affected by the U.S. government shutdown, the Bureau of Labor Statistics' nonfarm payroll data continues to be absent, making other data related to employment and unemployment particularly draw market attention in the short term. Data from global outplacement firm Challenger shows that planned layoffs by U.S. employers surged to 153,074 in October, marking a 183% month-over-month increase and hitting the highest level for the same period since 2002.Weak employment data has heightened market concerns over an economic slowdown exceeding expectations.
Following the release of the data, although the market's expectation probability for a rate cut in December slightly increased to 70%,The Federal Reserve’s stance remained relatively hawkish.Cleveland Fed President Loretta Mester clearly stated that inflation is more concerning than employment, and premature rate cuts carry greater risks.
In the short term, this has somewhat dampened investor hopes for policy intervention. The US labor market may be cooling down rapidly, intensifying investor concerns about the economic outlook.During the current 'policy vacuum,' if market volatility intensifies, $Tesla (TSLA.US)$ 、 $NVIDIA (NVDA.US)$ 、 $Palantir (PLTR.US)$ momentum stocks like these are more prone to confidence shocks and may continue to experience turbulence.
In the medium to long term, for Tesla itself, with the approval of the compensation package, Elon Musk’s instability risks have been mitigated.Stock prices continue to return to the fundamentals of vehicle manufacturing and the progress rhythm of plans such as autonomous driving, AI, and robotics.
In terms of the fundamentals of vehicle manufacturing, challenges in the fourth quarter are increasing.According to data released this week by the China Passenger Car Association, Tesla's Shanghai factory shipped 61,497 vehicles in October, a year-on-year decline of 9.9%, not only reversing the slight growth momentum of 2.8% in September but also experiencing a sharp month-on-month drop of 32.3%. This figure includes both domestic sales in China and exports to markets such as Europe and India. Demand in the European market remains weak, while in the U.S., following the end of the tax credit policy that had driven record sales in the third quarter, the market outlook is filled with uncertainty.
In the next six months to one year, the following events are worth paying attention to:
1. The next version of the FSD software is currently planned to begin internal testing of the V14 alpha version in Q4 2025, with the official V14 version set to launch in Q1 2026; for the Chinese market, Elon Musk predicts that FSD will receive full approval in February or March 2026;
2. Q3-Q4 2025: The Optimus robot initiative is scheduled to start pilot production, aiming to reach a trial production capacity of several thousand units by the end of the year, laying the groundwork for achieving an annual output of one million units by 2030;
3. Elon Musk announced that the Cybercab, completely devoid of a steering wheel and pedals, will enter production in April 2026;
4. Tesla plans to hold a Roadster product demonstration on April 1, 2026. Approximately 12 to 18 months after that, the Roadster will officially enter the mass production phase.
Options strategy
As of November 6, 2025, Tesla option IV stands at 70.70%, located at the 70th percentile over the past year, indicating that option pricing reflects heightened expectations of short-term volatility. Given the current high IV, caution is advised when directly purchasing options due to potential erosion of time value and volatility.
The average daily trading volume of call options has been higher than that of put options over the past five days. The Put/Call ratio on November 6 was 0.58, showing a decline compared to the previous day. Among the unusual large trades, a larger proportion indicated bearish sentiment.This indicates that short-term market sentiment leans towards cautious optimism.
Investors who already hold positions and remain bullish on Tesla in the long term can adopta covered callstrategy for protection,by selling out-of-the-money call options while maintaining their positions. By leveraging the currently high option premiums, if the stock price does not exceed the strike price, the full premium is retained, hedging potential floating losses in the stock price. After the option expires, the strategy can be rolled over. The risk is that an unexpected sharp rise in the stock price will constrain upside potential.
Since this strategy involves receiving premiums rather than paying them, there is less concern about losing the entire premium paid compared to buying puts.
(Images displayed on the screen are for illustrative purposes only and do not constitute any investment advice or guarantee.)
If there is concern about a possible pullback in Tesla's stock price but confidence in its long-term value remains,protective put optionsis the most direct 'defensive choice'.While holding stocks, an investor can purchase a put option (the strike price can be chosen based on one’s risk tolerance and is usually slightly below the current stock price). This option serves as 'insurance' for the holdings, granting the right to sell the stock at the strike price within a specified period in the future.
(Images displayed on the screen are for illustrative purposes only and do not constitute any investment advice or guarantee.)
If investors remain optimistic about Tesla's performance, they may chooseCash-secured Put optionsas a more suitable strategy to opportunistically buy at lower levels.
This is a strategy that says, 'I will buy at my target price if it falls there; otherwise, I'll keep the premium.' If by the expiration date the stock price is higher than the strike price, the put option will not be exercised, allowing you to retain the full premium. However, if the stock price falls below the strike price, you can purchase the corresponding number of shares at the pre-set price.
It is important to note that selling Puts requires sufficient margin. Position size must be carefully controlled—just because you can sell a certain number of Puts does not mean you can take delivery of the same amount. Therefore, set the number of Puts sold according to how many shares you can actually purchase, leaving enough protective cushion.
(Images displayed on the screen are for illustrative purposes only and do not constitute any investment advice or guarantee.)
Finally, here is a small benefit for fellow investors. Fellow investors are welcome to claim it.Options Beginner's Package
This event is exclusive to invited HK users. Click to learn more.Detailed rules of the event >>
Market conditions are complex and volatile,Options strategyToo many options and not sure how to choose? Futubull helps you build in three steps.Options strategy, making investment simple and efficient!
Risk Warning
An option is a contract that gives the holder the right, but not the obligation, to buy or sell an asset at a fixed price on or before a specific date. The price of an option is influenced by various factors, including the current price of the underlying asset, the strike price, the time to expiration, andimplied volatility。
implied volatilityIt reflects the market's expectation of volatility over a future period, derived from the Black-Scholes (BS) option pricing model. It is generally considered an indicator of market sentiment. When investors expect higher volatility, they may be willing to pay more for options to help hedge risks, leading to higher implied volatility.implied volatility。
Traders and investors useimplied volatilityto evaluateOption Pricethe attractiveness, identify potential mispricing, and manage risk exposure.
Disclaimer
This content does not constitute any offer, solicitation, recommendation, opinion, or guarantee for any securities, financial products, or instruments. The risk of loss in trading options can be substantial. In some cases, the losses you incur may exceed the initial margin deposited. Even if you set backup instructions, such as 'stop-loss' or 'limit' orders, they may not prevent losses. Market conditions may make it impossible to execute these instructions. You may be required to deposit additional margin within a short period. If you fail to provide the required amount by the specified time, your open positions may be liquidated. However, you will still be responsible for any resulting shortfall in your account. Therefore, before trading, you should research and understand options, and carefully consider whether this type of trading is suitable for you based on your financial situation and investment objectives. If you trade options, you should be familiar with the procedures for exercising options and their expiration, as well as your rights and obligations when exercising options and at expiration.
Risk Disclaimer: The above content only represents the author's view. It does not represent any position or investment advice of Futu. Futu makes no representation or warranty.Read more
Comments (27)
to post a comment
45
79