On CNBC's Options Action, Mike Khouw spoke about Tesla Inc TSLA ahead of earnings. The company is going to report earnings on Wednesday and the options market is implying a 6 percent move in either direction for the event. Over the last four quarters, Tesla moved around 5 percent on average.
Khouw said he noticed big options activity in the February 24, 300 strike calls. Traders were paying $2.20 for them, which sets the break even for the trade at $302.20 or 8.94 percent higher.
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