XPEV Topples Competition, Options Bulls Take Notice

Sentiment surrounding XPEV has been mostly optimistic

Deputy Editor
Aug 2, 2021 at 2:28 PM
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China-based electric vehicle name Xpeng Inc (NYSE:XPEV) is getting a jolt today, up 8.3% at $43.88 at last check, following news that direct competitor Nio (NIO) delivered fewer cars than Xpeng and fellow Chinese electric automaker Li Auto (LI). While Xpeng's 8,040 deliveries for July didn't quite top Li Auto's, the firm is still capturing the attention of options bulls. 

In fact, 67,000 calls have crossed the tape so far -- nearly double the intraday average -- compared to 18,000 puts. The most popular is the weekly 8/6 45-strike call, where positions are being sold to open, followed by the August 51 call. 

The penchant for calls has been the norm for XPEV, with 27,609 calls exchanged during the past two weeks, compared to 14,860 puts. This optimism is echoed by the brokerage bunch, too. Of the seven analysts in coverage, five say "strong buy."

Meanwhile, short sellers have been hitting the exits, with short interest down 12.6% in the last two reporting periods. A further unwinding of pessimism could put additional wind at the equity's back, seeing as the 20.37 shares sold short still make up 4.1% of the stock's available float. 

XPEV is eyeing its fourth-straight daily win today, though the stock is sizing up pressure near the $45 level, which has kept a lid on shares since early July. Nevertheless, the security sports a nine-month lead of 111.4%, and looks to have found its footing at the 120-day moving average.

xpev chart aug 2

For those wanting to speculate on the stock's next leg higher, options look like the way to go. The security's Schaeffer's Volatility Index (SVI) of 76% stands in the 14th percentile of its annual range. This means options traders are pricing in relatively low volatility expectations for XPEV at the moment. 

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