Call prices quadruple in $TSLA overnight

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

Yesterday on May 25, Market Rebellion’s Unusual Activity Service found that 10,000 Weekly $650 calls, expiring tomorrow, were bought for $10.00 to $16.90 above open interest of just 3,478 contracts with shares at $639.00.

Those calls have traded up to $68.55 today, over 4 times their purchase prices. The stock surged by 12.3% 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 on the day was last up by 7.59% at $708.82.