Shares of Tesla (TSLA) are rising today, delivering big gains to upside option positions.
On Feb. 13, Market Rebellion’s Unusual Activity programs detected the the purchase 13,500 Weekly $200 calls, expiring next Friday, for $5.55 to $6.62 with shares at $189.06. The volume was well above the contract’s previous open interest of 5,758 which indicated that this was a new position.
Those calls traded for as much as $15.25 today, at least 2 times their purchase prices. The stock rose 7.16% in the same time frame, 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 was up at the close by 7.51% at $209.25.