(Read More: Consumer Reports: Tesla Model S Among Best Ever Reviewed)
The options also saw triple the average volume. The heaviest-traded options are the calls expiring Friday afternoon and next week. Open interest is increasing, which suggests that new positions are being initiated as investors take some profits after this huge run.
The most actively traded strike in the May expiry is the 75-strike call, being sold for a $5.75 credit. When these are sold against a long stock position, a trader can collect $5.75, or 7.5 percent of the value of the stock, by next Friday. This new covered call position would break even as long as Telsa shares do not drop by more than $5.75 by then. The overall position makes its maximum profit if Tesla stays above $75. That said, if the shares do stay at about $75, those with this covered call position will their get called away.
Although its earnings were good and Tesla does deserve a high growth multiple, the stock looks quite expensive by many metrics. For instance, the company has a market cap of nearly $9 billion. General Motors has a market cap of $43 billion, but Tesla reported just 1.5 percent of GM's revenue and 1 percent of its profit, and has sold just 0.2 percent of the vehicles that GM did last quarter.
(Read More: GM Finally Turns the Corner With Investors)
The real driving force behind Tesla's 40 percent gain this week is a massive short squeeze, and once that's over, the stock will probably calm down. For those with a long position, it would be prudent to book some gains or hedge the downside by selling calls at an extraordinarily high volatility, then look to reinitiate a position once Tesla's stock returns to a more appropriate multiple.
Disclosures: None to report.
Brian Stutland is managing member of Stutland Equities and a contributor to CNBC's "Options Action." Follow him on Twitter: @BrianStutland