Despite a strong start to the year, Tesla shares are down nearly 10 percent in the past month, and options traders are piling into the stock ahead of its earnings report scheduled for Wednesday after the bell.

“Tesla has been the second most active single stock option over the past 20 days – second only to Amazon,” Mike Khouw of Optimize Advisors said Friday on CNBC’s “Options Action.”

Khouw noted that the options market is implying about a 7.5 percent move in either direction, which is significantly higher than the average 5.5 percent move over the past eight quarters.

If Tesla moves according to the implied post-earnings expectation of 7.5 percent, that would be about a $4 billion shift in market cap, and could represent the largest earnings-related valuation swing in the company’s history.

“We have all of these enormous unknowns like upcoming earnings and what the outcome of the Model 3 is,” Khouw added.

So to play for a move lower, Khouw bought the August 335/310 1×2 put spread for a total of $2.50. This is a bearish bet where one buys a put and then sells two lower strike puts to offset the cost. The goal is for the stock to fall to $310 by August expiration.

“This is a stock, if we have a five-to-six-year chart of it … almost every year, almost like clockwork, there’s been a 30, 35 percent peak-to-trough decline in this thing,” Dan Nathan of RiskReversal.com added.

Analysts polled by FactSet are expecting Tesla to report a loss of $1.87 per share on $2.5 billion in revenue.

Tesla shares were more than 2 percent lower in the $326.50 range midday Monday.