TSLA Rockets Higher Again As 'Someone' Panic-Buys Massively OTM Call Options

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by Tyler Durden
Friday, Jul 10, 2020 - 02:03 PM

Forget "50-Cent" - the infamous volatility "whale" trader - there appears to be a new player in the options market that is making bank by buying mysteriously well-timed 'lottery tickets' in one particular stock.

The last few days have seen TSLA shares literally explode higher - lurching every day, and sometimes multiple times per day, on no news catalyst:

At the same time, short-interest has collapsed to its lowest since 2011, removing the possibility that these moves are a forced short squeeze:

So what is driving this utter panic-buying momentum?

A clue may be found in the options markets, as @TESLACharts shows below, somebody has been buying extremely out-of-the-money call options on the most expensive carmaker in the world in size...

A second clue occurred today with TSLA shares surging twice intraday...

And at those exact times, "someone" was buying TSLA 'lottery tickets' in size...

The well-timed purchase of these deep-OTM calls saw prices rise from 50c to $4.25 in minutes - quite a profit! Meanwhile, TSLA's market gap rose by $16 billion in minutes on new news, propelling it past Home Depot and now less than $100BN behind WalMart market cap.

And while the delta of these calls is low (not big enough to have a direct impact on the underlying perhaps at the margin), the aggressive call buying appears to be a "messaging" effect that triggers a "virtuous" buying cycle as algos pick up on the skew in options volume and bid the underlying on the basis that "someone knows something."

The question is - who is buying these lottery tickets in size and who in the world gets to benefit most from the TSLA share price being at these incredibly elevated levels?