$TSLA calls soar at highs

Shares of Tesla (TSLA) are making new highs today, delivering big gains to upside option positions.

Market Rebellion’s Unusual Option Activity Service flagged bullish option activity on two separate occasions in calls that expire today, New Year’s Eve.

–On Nov. 30, 7,900 Weekly $570 calls, expiring Dec. 31, were purchased for $69.80, as part of a bullish roll, above open interest of 324 contracts with shares at $587.00.
–On Dec. 7, 8,000 Weekly $620 calls, expiring Dec. 31, were purchased for $53.90, also as part of a bullish roll, above open interest of 1,104 contracts with shares at $618.74.

Those calls have traded up to $146.57 and $97.57 today, respectively, about 2 times their purchase prices. The stock surged by as much as 22.21% in the same time period, a huge move but still nowhere near that of its options on a relative basis.

This marks the third and fourth winning trades posted on Market Rebellion in the name this month.

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 traded up to a new high of $718.72 this session and was last higher on the day by 1.02% at $701.90. Credit Suisse estimated yesterday that the electric car maker will clear its 2020 target of 500,000 deliveries.