Dan Nathan Sees Unusual Options Activity In Tesla

Dan Nathan spoke on CNBC's Options Action about options trading in Tesla Motors Inc TSLA. He said that the implied move ahead of earnings is 8 percent in either direction and an average move over the last four quarters is 4 percent.

Call options volume was 1.5 times put options volume and the five most active strikes in Tesla on Tuesday were short dated calls, expiring this Friday. Nathan presented a couple of charts for the stock, which show a strong move higher since the April, but he also pointed to a couple of bearish technical patterns on these charts.

Implied volatility is elevated ahead of the earnings because investors are worried about China, deliveries and Model X. There are a lot of things that the company could disappoint on and a lot of good news is already in the stock, added Nathan.