Tesla's Stock Poised To Rise After Q4 Earnings Report— By How Much?

Shares of Tesla Inc TSLA have plummeted close to 12% over the last five trading days ahead of the company's fourth-quarter results, scheduled to be reported after market close on Wednesday.

On CNBC's "Options Action," Mike Khouw of Optimize Advisors said that the market is implying a move of more than 10% in the EV maker’s stock by the end of the week. That would be a bigger reaction to a Tesla earnings report than the average move of around 7% over the last eight quarters, he added.

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Calls outpaced puts. There were buyers of 43,700 of the January 28 weekly 950 strike calls for an average price of $35.84 per contract, he said. This implies a move of at least 7% in Tesla’s stock by Friday.