Unusual Options Activity: Tesla Motors (TSLA)

Shares of electric vehicle giant Tesla Motors (TSLA) hit a new all-time high on Monday on news of a massive sale of 100,000 vehicles to a rental car agency. One trader sees shares moving higher.

  • Special: This Company’s Share Price has Increased 1650% Since 2016
  • That’s based on the January 2024 $680 calls. With 814 days until expiration, 13,322 contracts traded, a 125-fold jump in volume from the prior open interest of 107 contracts. The buyer of the calls paid $479, or $47,900 per contract, to make the trade.

    With the stock closing Monday around $1,025 per share, the options are about $345 in-the-money. They should move higher with shares dollar-for-dollar less any declining time premium or change in the stock’s volatility.

    The jump higher in shares gave Tesla a $1-trillion overall valuation for the first time. Typically companies that have hit that valuation have continued far higher in the months ahead, which make this, or any call option on the company, look interesting here.

    Action to take: Investors may like shares here, which likely still have some big upside in the months ahead. The stock was in rally mode at the start of ae year, but just finally started moving higher after months of trading sideways, a god sign that the current rally is likely to continue.

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  • For traders, these January 2024 leaps may be a bit pricey, given their high cost per contract. A less expensive option is the January 2023 $1,750 calls. Last going for about $55 per contract, they’re far cheaper than $479 per contract, and can still leverage a move higher in shares in the next 14 months.


    Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.