Tesla shares are surging, and according to one trader the best is yet to come.
"I think Tesla can move up to the $270 level by May," Andrew Keene said Tuesday on CNBC's "Trading Nation."
Keene's call represents a 6 percent advance from the current stock price of around $255. Tesla shares have already rallied 80 percent from their February low — driven recently by overwhelming demand and interest surrounding preorders for the company's newest Model 3.
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Despite the already sharp move higher, Keene sees no signs in the chart of Tesla that would indicate a meaningful pullback, but instead said that the stock has strong support and should continue to rev higher.
"We are in a clear bull channel," he said. Furthermore, "the options market is implying a $35 move between now and May expiration and that captures earnings in early May," added the founder of AlphaShark trading.
To calculate an implied move on a name, options traders measure a stock's so-called straddle — or at the money puts and calls. The amount of the straddle typically captures market markers' expectations for how much a stock is going to move.
To play for the move higher, Keene purchased the May 260/270 call spread for $2.50. This is a bullish strategy where a trader will buy a call and then sell a higher strike call to offset the cost. The goal is for the stock to move to the strike you are short, or in this case $270 by May expiration.
"This trade allows me to take advantage of the trend of the stock and play with the earnings catalyst," said Keene