Nikola Stock Options Pop After Earnings

Puts are winning out in the options pits

Deputy Editor
Feb 24, 2022 at 12:50 PM
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Electric vehicle manufacturer Nikola Corporation (NASDAQ:NKLA) tossed its hat in the earnings ring today, revealing narrower-than-expected fourth-quarter losses. The company failed to post revenue for the quarter, but expects to report its first ever revenue this year as it moves to deliver 300 to 500 Tre battery-electric vehicles (BEV) in 2022. At last check, the shares of Nikola stock were up 7.4% to trade at $7.33.

Options traders are responding to the news, with bears edging out bulls. By midday, 14,000 puts and 12,000 calls have crossed the tape, which is double the intraday amount. Most popular is the weekly 6.50-strike put, where new positions are being opened, followed by the 8-strike call from the same series.

This preference for puts seems to be the norm. NKLA sports a 10-day put/call volume ratio of 1.52 at the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), which stands higher than 96% of readings from the past year. 

Shorts have been building their positions, with short interest up 25.4% in the last two reporting periods. The 70.69 million shares sold short account for a massive 32.2% of the stock's available float, or four days' worth of pent-up buying power. 

Nikola stock is paring earlier losses that put the equity at an all-time low of $6.41. It's been a rough year so far for NKLA, with its most recent rally attempt succumbing to pressure at the 40-day moving average. The equity looks like it's testing its footing at the $7 level this afternoon, though it's still suffering a 23% year-to-date deficit. 

NKLA Chart Feb 24

 
 

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