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The giant bet that Tesla will fall 75 percent

The bet Tesla will drop 50 percent

Tesla is set to report earnings after the bell on Wednesday, and the pressure is on. Since hitting a low of $116 in late November, the stock has risen to $200. But one major options player is betting that Tesla shares will not only fall back to that level, but plummet all the way to $50 by January 2015.

In one of Tuesday's biggest options trades, a firm bought 2000 January 100/50 one-by-two put spreads in Tesla for $3.50 each. Buying a one-by-two put spread is a bearish bet whereby a trader buys one downside put, then sells two lower-strike puts against it to reduce costs. The maximum loss is the money spent on the trade, while the maximum gain is attained if the stock falls to the level of the two puts that were sold.

That means this trade has a very favorable risk-reward profile, at least on paper. The trader spent $350 per contract 2,000 times, so $700,000 in premium was spent. That is the maximum loss. And if Tesla shares fall to $50 exactly, the trader will enjoy a staggering $9.3 million in profits.

A Tesla Model S car is displayed at a Tesla showroom in Palo Alto, California.
Getty Images

(Read more: The big bet that Tesla's upside is capped)

For that to happen, however, the stock would need to lose 75 percent of its value in the next 11 months. And even for the trade to simply break even, the shares would need to fall to $96.50.

"It certainly is an unlikely outcome, and it's kind of priced that way, too. The probability that the options market is suggesting that it might get down to that level is relatively low," said Mike Khouw, primary strategist at Dash Financial. But "they're doing it in pretty good size. … I wouldn't, certainly, do it in that kind of size."

Given the sheer amount of downside this trader sees in the stock, Khouw think it's something more than a bet that earnings will disappoint.

(Read more: Tesla Motors earnings: 5 catalysts to watch)

"Somebody is a expressing a fairly bearish bet, and I don't think that's earnings-related—I think it's probably based on their view of valuation relative to the fundamentals," Khouw said. "When you think about how far this company would have to grow to justify its $25 billion enterprise value, that's expecting a lot."

Analysts are expecting the company to report earnings of 23 cents per share on $684 million in sales, according to FactSet.

—By CNBC's Alex Rosenberg. Follow him on Twitter: @CNBCAlex.

Follow the show on Twitter: @CNBCOptions.

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