Market’s Choice

Hey Shoppers!

What’s up?

I’ll tell you what’s up…

Options volume!!

This Friday, “Market-wide option volume of 34.2m contracts was 14% above recent average levels”.  

With expiration being this week, we could be in for some massive options trading.  Of course this provides a ton of opportunities.

We also have a new stock darling taking the place of AAPL.  

That stock is Nio ($NIO), which is a Chinese auto manufacturing company specializing in electric vehicles.  Here’s whats crazy:

You actually need the AAPL app to purchase a $NIO car in the US!

$NIO has an average daily volume of 945,000 contracts and traded a whopping 3.49 million contracts on Friday!  That’s 1.25 million more than AAPL and just 750,000 less than the SPY.  NIO actually traded around 300,000 MORE calls than SPY calls on Friday!!

Like I said, with expiration week, it will be rocking!

Another interesting thing this list of most active options shows us is that there are six electric vehicle and/or electric vehicle battery producers in the top 30:  

NIO, TSLA, LI, PLUG, F and XPEV.  (And we definitely need to throw GE in there just as an electric power source company.)

Even crazier than those stocks, there are five Chinese stocks in this list of most actives:  NIO, BABA (beating out AMZN), JD, LI, and XPEV.

Hmmm, electric vehicles and China…

⇒ This looks to me like the market is putting its money on changes in policy with a Biden win.  What do you think?

Back to $NIO.  The stock had a huge almost 14 point range (29%) on Friday ending down at $44.56.  That is some massive volatility.  I think this makes the chart look ugly for NIO on Monday, too.  With earnings being reported on Tuesday after the close, I personally would not have a position on during the earnings report.  The stock could end up anywhere and the volatility is usually sucked out after earnings.

But I would keep a close eye on the Nov20 38.50 puts around $2.00.  Granted that is some big premium you are paying for at an implied volatility of 179.86, but I think you will find an opportunity to be in and out of those with a quick profit.  

It is safe to say that $NIO will be rocking and rolling with these stock moves, implied vols and earnings coming up in an expiration week.

My $PINS trade from last week worked out.  I bought the Nov20 62/67 call spread for $.85.  I originally recommended paying $.95 but was able to get it for $.85 on Thursday.  By Friday the spread traded $1.48.  With a 74% profit in less than two days, you take the money.

Thanks for reading…See You Next Tuesday!

Licia Leslie

– As a heads up, just like my $PINS trade above, I get to trade our elite service, Sharp B.E.T.S. Since the beginning of October we’ve closed over 330% in profits. Mark’s opening it back up for everyone on my Profits In Pumps Newsletter. I would get in before the holiday and earnings season run. Get it here.

• DISCLAIMER: FOR EDUCATIONAL AND INFORMATION PURPOSES ONLY; NOT INVESTMENT ADVICE. The materials presented from Option Pit LLC are for your informational and educational purposes only. Neither Option Pit LLC nor its employees nor its affiliates offer investment, legal or tax advice of any kind, and the analysis displayed with various tools does not constitute investment, legal or tax advice and should not be interpreted as such. Using the data and analysis contained in the materials for reasons other than the informational and educational purposes intended is at the user’s own risk. 
• Option Pit LLC is not responsible for any losses that may occur from transactions effected based upon information or analysis contained in the presented materials. Option Pit LLC IS NOT AN INVESTMENT ADVISOR OR REGISTERED BROKER. Specific trading ideas or strategies discussed in the presentations or materials are entirely illustrative and do not constitute a solicitation of a transaction (or transactions) or a recommendation to execute a particular transaction or implement a particular trading strategy.
• To the extent that you make use of the concepts with the presentation material, you are solely responsible for the applicable trading or investment decision. Use caution when entering any option transaction and it is recommended you consult with your financial advisor for investment, legal or tax advice relating to options transactions.