Tesla Rival in Focus as China Stocks Pop

NIO just revealed strong Q2 delivery numbers last Thursday

Deputy Editor
Jul 6, 2020 at 11:10 AM
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Thanks to data courtesy of Schaeffer's Senior Quantitative Analyst Rocky White, we have a list below comprised of 20 stocks that have attracted the highest weekly options volume over the last 10 trading days. New entrants to the list are highlighted in yellow, including China-based electric car maker Nio Inc (NYSE:NIO). In fact, the equity is leading the iShares China Large-Cap ETF (FXI) today, due to successful reopening efforts in the region and the company's better-than-expected second-quarter deliveries, reported last Thursday.

At last check, NIO is up 22.6% at $11.49, earlier roaring to a new annual high of $12.30 and near its September 2018 all-time peak of $13.80. The stock's rebound off its March lows has been swift and impressive, with NIO tacking on over 372% in the last three months. While NIO briefly contended with pressure at the $8 mark, the ascending 20-day moving average captured the rejected stock before vaulting it past this region.

NIO is long overdue for a fresh round of bull notes. Just one analyst considers the carmaker a "strong buy," while five say "hold." Plus, the consensus 12-month price target of $5.52 is a whopping 54.3% discount to current levels. 

Short interest, meanwhile, is starting to unwind, down 6.5% in the last two reporting periods. A further unraveling of bearish bets could still fuel more upside for the equity, however. The 130.51 million shares still sold short make up a solid 16.9% of NIO's available float, or 2.4 days at its average pace of trading. 

Options bulls are beginning to come around, too. White's data shows that over the past 10 days, 507,039 calls and 118,515 puts have exchanged hands. A glance at today's trading reveals more of the same, with 209,000 calls and 46,000 puts across the tape so far -- three times the average daily pace. Most popular is the weekly 7/10 12-strike call, where it appears positions are being sold to open. 

An even closer look at NIO's options pits shows its 50-day call/put volume ratio of 4.31 at the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) stands higher than 79% of readings from the past year. This implies a much healthier-than-usual appetite for these bullish bets of late.


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