Wall Street is hoping Tesla's Q2

earnings will stop its recent slide, but

just in case it doesn't, here's how you

can get some insurance. Stock holders

can buy protection against a potential

drop by buying what's called a put

option. A put gives its owner the right

to sell a stock at a fixed price before

a certain date. If you wanted to buy

protection against a bad earnings report

by Tesla, one way is to buy one put at a

$375 strike level for July 24th

expiration against 100 shares that you

already own. The strike is a price at

which the shares can be sold. July 24th

is the expiration date, the last day you

have the right to sell those shares at

that price. With Tesla stock trading

near $380,

the put allows you to sell those shares

at $375

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>> even if there's a big drop after

earnings. Without the hedge, every $1

decline in the price of Tesla shares

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costs about $100 because the investor

owns 100 shares. As this Alpha Space

chart shows, the put contract gains

value as Tesla falls. That gain helps

offset losses on the shares. If Tesla

plunges, the put can offset a lot of

damage, but options don't come without

risk. If the stock only falls slightly,

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>> the premium may cost more than the loss

it prevents. If Tesla rises or stays

near current levels,

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>> much of the value could disappear by

expiration.