Call buyers drive gains in $TSLA at highs

Shares of Tesla (TSLA) are revving again  today, delivering more big gains to upside option positions.

On Sep. 1, Market Rebellion’s Unusual Activity Service found that 12,500 November $700 calls were bought for $81.55 to $87.00 above open interest of just 2,553 contracts with shares at $735.32.

Those calls have traded up to $390.70 today, well over 4 times their purchase prices. The stock surged by 48.91% in the same time period, a large move but nowhere near that of its options on a relative basis.

Long calls lock in the price where investors can buy a stock, letting them position for a rally at limited cost with the potential for significant leverage. They carry less risk than owning shares because the most that can be lost is the price of the options no matter how far the stock might fall.

TSLA closed the day down by 0.63% at $1,018.43.