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Data: Factset, Yahoo Finance; Chart: Andrew Witherspoon/Axios

For millions of traders and CNBC addicts, the word "Tesla" doesn't mean cars — it means TSLA, one of the wildest large-cap stocks the world has ever seen.

Driving the news: On Monday alone, Tesla opened $114 higher than its previous close, then gained another $136 within 15 minutes, then dropped by $324 before the market closed. (Even during the drop there was a half-hour period where the stock rose another $100.)

  • Each dollar of Tesla's share price corresponds to a market capitalization of $185 million, which means that Tesla lost more than $60 billion of value intraday. That's more than the market cap of Ford and Fiat Chrysler combined.

Large-caps aren't supposed to be this volatile. Tesla's Monday peak was 89% higher than the low point two weeks earlier — on no real news.

  • The rise was partly due to small retail investors rushing in, and partly due to short sellers getting squeezed. But ultimately looking for reasons is a fool's errand. (Can a short squeeze really last seven years?)
  • The one known known is that Tesla stock is highly volatile. Looking at the implied volatility suggested by options pricing, there's roughly a 15% chance that in three weeks time, Tesla stock will either be trading below $900 or above $4,000.

By the numbers: Tesla stock is popular among day-traders who don't like to hold any kind of position overnight. Partly as a result, it opened higher than its previous close every day this month up to yesterday.

  • If you bought one share of Tesla at the closing price each day in July and sold it immediately at the open the following morning, you would have made more than $450 between July 1 and July 15.*

Don't look to Wall Street analysts for clarity. Their price targets range from $87 (Gordon Johnson of GLJ Research) to $2,322 (Alex Potter of Piper Sandler).

  • Coming up: Tesla's second-quarter earnings arrive on July 22. If Musk can manage to eke out a profit, no matter how small, then that will mean four successive quarters of profitability — which in turn means that Tesla will be eligible to join the S&P 500, and index funds with trillions of dollars under management will be forced to buy the stock.

The bottom line: Cars and carmakers have had mythic status for decades. But for the time being it often seems that there's only one game in town.

Go deeper: Breaking down the Tesla obsession

Go deeper

Felix Salmon, author of Capital
Aug 27, 2020 - Economy & Business

How the Dow masquerades as a stock-market index

Photo illustration: Sarah Grillo/Axios. Photo: Johannes Eisele/AFP via Getty Images

For all its weakness as a stock-market gauge, the Dow Jones Industrial Average continues to tell us a lot about the state of corporate America, as opposed to the state of the equity market.

Why it matters: The Dow is a slice of America masquerading as a stock-market index.

Trump's coronavirus adviser Scott Atlas resigns

Photo: Nicholas Kamm/AFP via Getty

Scott Atlas, a controversial member of the White House coronavirus task force, handed in his resignation on Monday, according to three administration officials who discussed Atlas' resignation with Axios.

Why it matters: President Trump brought in Atlas as a counterpoint to NIAID director Anthony Fauci, whose warnings about the pandemic were dismissed by the Trump administration. With Trump now fixated on election fraud conspiracy theories, Atlas' detail comes to a natural end.

Dave Lawler, author of World
2 hours ago - World

Assassination in Iran sets stage for tense final 50 days of Trump

The funeral ceremony in Tehran. Photo: Iranian Defense Ministry via Getty

Iranian leaders are weighing their response to the assassination of Mohsen Fakhrizadeh, known as the father of Iran’s military nuclear program, who was given a state funeral Monday in Tehran.

The big picture: Iran has accused Israel of carrying out Friday’s attack, but senior leaders have suggested that they’ll choose patience over an immediate escalation that could play into the hands of the Israelis and the outgoing Trump administration.