Nio Dips While Options Traders Grab Calls

Nio Inc (NYSE: NIO) rose almost 80% between its May 13 low of $30.71 and the June 1 high of $55.13 before beginning to pull back. The retracement accelerated on Wednesday and Nio’s stock lost another 8% after the Chinese government threatened to increase regulations on Chinese companies listed offshore.

Nio has continued to meet and beat its targets, however, and on Wednesday the company said it had dispatched its first round of home charging piles and superchargers to Norway. On Tuesday, the China International Capital Corporation Limited raised its sales estimate for Nio by 5% to 98,000 vehicles for the 2021 calendar year.

Bullish options traders took advantage of the dip in Nio’s stock price and piled in to purchase a total of over $1.13 million worth of call contracts. One bullish trader chose an Aug. 20 expiry of $100 &mdash more than double Nio’s current share price.

Why It’s Important: When a sweep order occurs, it indicates the trader wanted to get into a position quickly and is anticipating an imminent large move in stock price. A sweeper pays market price for the call or put option instead of placing a bid, which sweeps the order book of multiple exchanges to fill the order immediately.

These types of call option orders are usually made by institutions, and retail investors can find watching for sweepers useful because it indicates “smart money” has entered into a position.

The Nio Option Trades: Below is a look at the notable options alerts, courtesy of Benzinga Pro:

  • At 9:33 a.m., a trader executed a call sweep near the ask of 324 Nio options with a strike price of $50 expiring on July 16. The trade represented a $69,660 bullish bet for which the trader paid $2.15 per option contract.
  • At 9:36 a.m., a trader executed a call sweep near the ask of 205 Nio options with a strike price of $50 expiring on July 16. The trade represented a $38,540 bullish bet for which the trader paid $1.88 per option contract.
  • At 9:47 a.m., a trader executed a call sweep near the ask of 300 Nio options with a strike price of $53 expiring on July 30. The trade represented a $59,700 bullish bet for which the trader paid $1.99 per option contract.
  • At 9:51 a.m., a trader executed a call sweep near the ask of 2499 Nio options with a strike price of $100 expiring on Aug. 20. The trade represented a $42,483 bullish bet for which the trader paid 17 cents per option contract.
  • At 10:13 a.m., a trader executed a call sweep near the ask of 254 Nio options with a strike price of $52 expiring on July 23. The trade represented a $35,560 bullish bet for which the trader paid $1.40 per option contract.
  • At 10:13 a.m., a trader executed a call sweep near the ask of 200 Nio options with a strike price of $40 expiring on July 16. The trade represented a $173,000 bullish bet for which the trader paid $8.65 per option contract.
  • At 10:16 a.m., a trader executed a call sweep near the ask of 200 Nio options with a strike price of $49 expiring on July 16. The trade represented a $36,600 bullish bet for which the trader paid $1.83 per option contract.
  • At 11:19 a.m., a trader executed a call sweep near the ask of 840 Nio options with a strike price of $47 expiring on Aug. 20. The trade represented a $386,400 bullish bet for which the trader paid $4.60 per option contract.
  • At 11:29 a.m., a trader executed a call sweep near the ask of 300 Nio options with a strike price of $45 expiring on July 16. The trade represented a $99,000 bullish bet for which the trader paid $3.30 per option contract.
  • At 11:36 a.m., a trader executed a call sweep near the ask of 300 Nio options with a strike price of $45 expiring on July 16. The trade represented a $94,500 bullish bet for which the trader paid $3.15 per option contract.
  • At 12:12 p.m., a trader executed a call sweep near the ask of 200 Nio options with a strike price of $51 expiring on July 30. The trade represented a $36,400 bullish bet for which the trader paid $1.82 per option contract.
  • At 12:28 a.m., a trader executed a call sweep near the ask of 200 Nio options with a strike price of $50 expiring on Aug. 20. The trade represented a $67,000 bullish bet for which the trader paid $3.35 per option contract.

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