Why Pete Najarian Just Bought More Tesla Call Options

Market Rebellion co-founder Pete Najarian is buying more Tesla Inc TSLA call options Monday as the stock continues to surge.

Tesla traders who are exiting their positions are just buying higher strike prices. "They just keep coming and coming and coming," Najarian said Monday on CNBC.

Najarian has noticed increased options activity since Oct. 15 when Tesla was trading at $853 per share. Since that time, the stock has been steadily increasing.

"The monster option activity that we have been seeing in there buying more upside has been right, right, right, right, right," he said. "Eventually it'll be wrong. We all know that, but for right now, they continue to roll up."

See Also: Why Anthony Scaramucci Is Warning Tesla Shorts: 'I Would Get Out Of The Way Of Elon Musk If I Were You'

Over 3 million contracts were traded on two separate trading days last week, Najarian said, adding that 2 million contracts has become the norm and more than 1.5 million have already been traded Monday.

"Gives you a little bit of an idea the appetite that people have," he emphasized.

There was a buyer of 35,000 Tesla call options at the $1,200 strike that expire at the end of the week, Najarian said.

Najarian thinks call buying activity is surging because the implied volatility is lower than what it has been historically. He plans to continue riding the momentum.

TSLA Price Action: Tesla is making new all-time highs during Monday's trading session.

The stock was up 5.48% at $1,174.89 at the time of publication.

Photo: courtesy of Tesla.