Options Traders Follow Michael Burry On Tesla Short

Michael Burry of "The Big Short" fame isn’t the only trader with a big short position in Tesla Inc TSLA.

On Tuesday, options traders bet over $9.95 million the electric vehicle maker’s stock will tumble further.

Burry’s firm, Scion Asset Management, filed a form 13 with the Securities and Exchange Commission revealing a purchase of 800,000 Tesla put options worth approximately $500 million. Tesla’s stock is already down about 35% from its Jan. 25 all-time high of $900.

See Also: How to Buy Tesla Stock Now

The Tesla Option Trades: Below is a look at the notable options alerts courtesy of Benzinga Pro:

• At 9:33 a.m., a trader executed a put sweep, near the ask, of 220 Tesla options with a strike price of $575 expiring on May 21. The trade represented a $455,400 bearish bet for which the trader paid $20.70 per option contract.
• At 9:40 a.m., a trader executed a put sweep above the ask of 350 Tesla options with a strike price of $455 expiring on July 16. The trade represented a $539,350 bearish bet for which the trader paid $15.41 per option contract.
• At 9:41 a.m., a trader executed a put sweep near the ask of 514 Tesla options with a strike price of $575 expiring on May 21. The trade represented a $833,708 bearish bet for which the trader paid $16.22 per option contract.
• At 9:43 a.m., a trader executed a put sweep near the ask of 502 Tesla options with a strike price of $575 expiring on May 21. The trade represented a $790,148 bearish bet for which the trader paid $15.74 per option contract.
• At 9:53 a.m., a trader executed a put sweep above the ask of 215 Tesla options with a strike price of $575 expiring on May 21. The trade represented a $319,060 bearish bet for which the trader paid $14.84 per option contract.
• At 9:59 a.m., a trader executed a put sweep near the ask of 300 Tesla options with a strike price of $460 expiring on July 16. The trade represented a $498,000 bearish bet for which the trader paid $16.60 per option contract.
• At 9:59 a.m., a trader executed a put sweep above the ask of 271 Tesla options with a strike price of $575 expiring on May 21. The trade represented a $450,402 bearish bet for which the trader paid $16.62 per option contract.
• At 10:09 a.m., a trader executed a put sweep near the ask of 1,028 Tesla options with a strike price of $575 expiring on May 21. The trade represented a $1.43 million bearish bet for which the trader paid $13.93 per option contract.
• At 10:29 a.m., a trader executed a put sweep near the ask of 357 Tesla options with a strike price of $500 expiring on June 18. The trade represented a $422,680 bearish bet for which the trader paid $12.40 per option contract.
• At 10:31 a.m., a trader executed a put sweep near the ask of 913 Tesla options with a strike price of $575 expiring on May 21. The trade represented a $957,737 bearish bet for which the trader paid $10.49 per option contract.
• At 11:08 a.m., a trader executed a put sweep near the ask of 300 Tesla options with a strike price of $475 expiring on July 16. The trade represented a $498,000 bearish bet for which the trader paid $16.60 per option contract.
• At 11:26 a.m., a trader executed a put sweep above the ask of 756 Tesla options with a strike price of $575 expiring on May 21. The trade represented a $565,488 bearish bet for which the trader paid $7.48 per option contract.
• At 12:30 a.m., a trader executed a put sweep near the ask of 245 Tesla options with a strike price of $500 expiring on Oct. 15. The trade represented a $1.1-million bearish bet for which the trader paid $45.20 per option contract.

Why It’s Important: When a sweep order occurs, it indicates the trader wanted to get into a position quickly and is anticipating an imminent large move in stock price. A sweeper pays market price for the call option instead of placing a bid, which sweeps the order book of multiple exchanges to fill the order immediately.

These types of call option orders are usually made by institutions, and retail investors can find watching for sweepers useful because it indicates “smart money” has entered into a position.

TSLA Price Action: Shares of Tesla were trading up 1.44% to $585.12 at last check Tuesday.

Photo courtesy of Tesla.