$TSLA calls prices quadruple

Shares of Tesla (TSLA) moved higher today, delivering big gains to upside option positions.

On Nov. 23, Market Rebellion’s Unusual Activity scanners showed that 6,000 Weekly $630 calls expiring on Dec. 31 were purchased for $18.00 with shares at $520.35. These were clearly new positions, as the open interest in that contract before the trade occurred was just 11.

Those calls traded for as much as $78.55 today, over 4 times their purchase price. The stock surged 82.57% 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 closed higher on the day by 1.27% at $649.88. The electric car maker filed to sell $5 billion in common stock through an at-the-market program this morning.