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How a 2,360% Jump in Call Options Fired Up Tesla’s Share Surge

  • Volume in bullish options rises to highest level in 14 months
  • A rush to short-dated calls seen fueling a ‘gamma squeeze’
Photographer: Jasper Juinen/Bloomberg

There were plenty of reasons for Tesla Inc. to rally Monday. Everything from Hertz Global Holdings Inc.’s blockbuster order to buying by passive funds and a squeeze on short sellers.

But other forces were at play in goosing the gain: options traders who piled on bullish bets, and market makers who were forced to purchase shares to hedge their positions as the stock surged.