Tesla (TSLA) surged more than 20% post earnings as CEO Elon Musk delivered an encouraging forecast and revealed surging sales in his electric vehicle company. Shareholders enjoyed the biggest single-day pop in TSLA in over a decade, rising to a session high of $262.12. Massive volume of over 200 million shares ( three times average volume) states that the nearly $20 billion (notional value) of short positions raced to the exit door. This short-covering created a significant increase in volatility making option premiums increase lock-in-step. I want to use this elevated option premium to create income on this refurbished Mag 7 member. ( See what Kilburg did going into earnings here. ) Volatility is a known characteristic for Tesla as the stock has a beta of 2.29, more than double that of the S & P 500. And Tesla earnings have historically created volatility in the stock. Prior to the earnings report beat, options markets implied shares were going to fluctuate about 6% (up or down) following the third quarter earnings report. Shares have moved an average of about 11% following the past four quarterly reports. TSLA YTD mountain Tesla, YTD Musk, the world’s richest man, now has the ability to move his little EV company into the trillion-dollar club as the market cap for Tesla now sits up above $800 billion. Tesla also confirmed that it produced its 7 millionth electric car this week. Tesla produced its millionth vehicle back in early 2020 after 16 years of existence. In the subsequent four years, it managed to produce 6 million more EVs. The trade I still believe there is a ton of emotion in this stock and volatility (up and down) will persist, but I stand firm on my conviction that Tesla is one of the purest plays for artificial intelligence and I continue to keep my core long position. I want to embrace the emotion in the recent short-covering mania by utilizing a put spread options strategy which allows an investor to collect substantially more premium with this heightened volatility. This is a credit spread that results in creating a short-term income stream, a synthetic dividend: Sold the $250 11/08/2024 put for $7.25 Bought the $230 11/15/2024 put for $2.25 Collected $5.00 ($500) per one spread Tesla was roughly trading $261 when this credit spread was executed This is a profitable strategy as long as Tesla stays above $245 since the collection of $5 brings the breakeven point of the potential $250 put option assignment down to $245. My view is obviously short-term here with just a two week expiration for this put spread to materialize but, the increase in option premiums might be short-lived in Tesla as the battered and bruised “shorts” limp off the field. DISCLOSURES: (Long Tesla, sold this put spread, also short TSLA o-t-m calls and put options.) All opinions expressed by the CNBC Pro contributors are solely their opinions and do not reflect the opinions of CNBC, NBC UNIVERSAL, their parent company or affiliates, and may have been previously disseminated by them on television, radio, internet or another medium. THE ABOVE CONTENT IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY . THIS CONTENT IS PROVIDED FOR INFORMATIONAL PURPOSES ONLY AND DOES NOT CONSITUTE FINANCIAL, INVESTMENT, TAX OR LEGAL ADVICE OR A RECOMMENDATION TO BUY ANY SECURITY OR OTHER FINANCIAL ASSET. THE CONTENT IS GENERAL IN NATURE AND DOES NOT REFLECT ANY INDIVIDUAL’S UNIQUE PERSONAL CIRCUMSTANCES. THE ABOVE CONTENT MIGHT NOT BE SUITABLE FOR YOUR PARTICULAR CIRCUMSTANCES. BEFORE MAKING ANY FINANCIAL DECISIONS, YOU SHOULD STRONGLY CONSIDER SEEKING ADVICE FROM YOUR OWN FINANCIAL OR INVESTMENT ADVISOR. Click here for the full disclaimer.