NKLA Extends Losses After Partnership Termination

The equity sports attractively priced options at the moment

Deputy Editor
Dec 24, 2020 at 10:12 AM
facebook twitter linkedin

The shares of Nikola Corporation (NASDAQ:NKLA) are extending yesterday's plunge to their pre-pandemic lows, after the company and Republic Services (RSG) terminated a partnership to develop electric garbage trucks. According to a letter from Nikola's CEO Mark Russell, the move was "the right decision for both companies given the recourses and investments required." As a result, NKLA was last seen down 2.7% to trade at $14.62 this morning.

Things were looking promising for the equity near the end of November when shares were staging a climb back toward their summer highs, which culminated in a three-month peak of $37.95. However, a Nov. 30 bear gap lead Nikola stock below the $20 which has joined the 10-day moving average as a dual ceiling for the equity. While the security is down 26.5% this quarter, it's still up 45.8% in 2020.

Over the last 10 days, calls and puts have been trading at a relatively similar pace. In fact, 48,199 calls and 41,335 puts have crossed the tape in the last two weeks. That being said, traders looking to speculate on Nikola stock's near-term trajectory should consider options. The security's Schaeffer's Volatility Index (SVI) of 111% sits in the 10th percentile of its annual range, suggesting short-term options are pricing in low volatility expectations. In other words, the stock's near-term options are attractively priced at the moment.


Minimize Risk While Maximizing Profits

There is no options strategy like this one, which consistently minimizes risk while maintaining maximum profits. Perfect for traders looking for ways to control risk, reduce losses, and increase the likelihood of success when trading calls and puts. The Schaeffer’s team has over 41 years of options trading success targeting +100% gains on every trade. Rest assured your losses are effectively limited to your initial cost at the time of making your move! Don't waste another second... join us right now before the next trade is released! 


300x250 - Banner 3 - v1