Nio Stock Stalled Despite New Battery Leasing Service

The equity is up over 353% year-over-year

Deputy Editor
Aug 20, 2020 at 10:15 AM
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The shares of Nio Inc (NYSE: NIO) are down 1.3% at $13.89 this morning, despite news that the electric car company launched a new battery leasing service. The China-based Tesla rival's "Battery as a Service" subscription model would allow drivers to purchase an electric vehicle without owning the pricey battery pack, giving consumers the option to subscribe the usage of battery packs completely separately. Additionally, Nio announced it hopes to enter international markets around the second half of 2021. 

NIO has cooled on the charts since the last time we checked in on the stock, but its 30-day moving average has contained the damage. Still, the shares boast a staggering 353% year-over-year lead, and has tacked on 82.1% in the last quarter alone.  

A short squeeze could keep the tailwinds coming. Short interest fell by 16% in the most recent reporting period, yet the 106.63 million shares sold short still takes up a hefty 13.8% of NIO's total available float.

NIO's options pits are flashing some serious bullish activity, as is evidenced by the fact that 186,386 calls were exchanged in the past 10 days compared to 60,870 puts. Whatever the motive, Nio stock sports a Schaeffer’s Volatility Index (SVI) of 84%, which sits in the 11th percentile of its annual range. This suggests options have been pricing in relatively low volatility expectations right now. 

Additionally, the security's Schaeffer's Volatility Scorecard (SVS) is lofty, sitting at a whopping 90 out of 100. Simply put, Nio stock has tended to exceed option traders' volatility expectations during the past year, a boon for option buyers.


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