Three quarters into a rough year, Tesla is in need of a big-time turnaround.
Elon Musk's electric-auto maker reports earnings after the bell on Wednesday, hoping to follow up its recent deliveries miss with some more optimistic financial results and kick-start a run higher for the stock.
Whether Tesla can actually achieve those goals is something of an open question in the options market, where some conflicting activity is painting a cloudy picture of investor sentiment ahead of Wednesday's report.
"[The options market] is implying about an 8% move, which is about typical," Realm Capital founder Roger DaSilva said Tuesday on "Fast Money." "I'd say it's smack in the range of 8%-10% where [Tesla] typically moves. However, last quarter, it dropped about 15%, so I think people are gearing up for that, as well."
While eye-catching, that 15% move to the downside is just under twice the average post-earnings move for Tesla, which comes in around 9% in either direction.
However, at least one trader is looking to take advantage of what could turn out to be cheap options prices to place a big bet on a Tesla beat.
In this bet, the November 230-strike calls rolled up to the November 280s, DaSilva said, "locking in some profits, but positioning for some more upside."
Despite slightly depressed options prices, these contracts still aren't particularly cheap. This trader laid out more than $4 million in premium to place this bet, buying 6,000 contracts at $6.70 per contract.
If the trader had just been buying those 280-strike calls, Tesla would need to jump more than 12% from yesterday's close for this trade to break even at November expiration. However, by way of selling in-the-money call contracts against this trade, the trader likely cut down their break-even price significantly, making this bet easier to justify placing.
Tesla was trading slightly lower in Wednesday's session.