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Mike Khouw spoke on CNBC's "Options Action," about unusually high options activity in Tesla Inc (NASDAQ: TSLA). The company is scheduled to report earnings on Wednesday and Khouw noticed that calls outpaced puts by about 2 to 1 on Tuesday. Most of that activity was short-dated.
The options market is implying a move of about 14% in either direction by the end of the week, said Khouw. The implied move is higher than Tesla's average move of 9.3% on the event.
Khouw noticed the most active options on Tuesday were the July 24, $2,000 calls. Almost 20,000 contracts were traded for around $25. Buyers of these calls are betting that the stock is going to jump above $2,025 or around 30% higher from the closing price on Tuesday.
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