$TSLA call prices double

Shares of Tesla (TSLA) have been continuing their move higher this week, delivering significant gains to upside option positions opened on Monday.

On May 4, Market Rebellion’s Unusual Activity scanners showed that 6,500 Weekly $1,000 calls expiring today, May 8 were purchased for $4.00 to $10.25 with shares at $701.80. These were clearly new positions, as open interest in that contract was just 2,658 before the trade occurred.

Those calls traded for as much as $24.65 today, at least 2 times their purchase prices. The stock surged 17.38% in the same time period, a huge move but still 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 ended the week at $819.42, up 5.05% for the day. The electric car maker’s Model 3 was the best selling car in Britain last month, according to a Motortend report on Wednesday.