$TSLA option bulls double money

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

On Jun. 21, Market Rebellion’s Unusual Activity Service found that 6,500 Weekly $645 calls, expiring this Friday, were bought for $3.65 to $7.00 above open interest of just 1,876 contracts with shares at $617.17.

Those calls have traded up to $16.50 today, well over 2 times their purchase prices. The stock surged by 6.31% 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 was last higher on the day by 4.81% at $653.70. Piper Sandler noted yesterday it thinks electric vehicles will represent 94% of new car sales by 2024.