Bulls keep charging with $NIO

Option traders are charging ahead with more big gains today on upside positions opened in Chinese electric-car maker NIO (NIO).

On Oct. 30, Market Rebellion’s Unusual Activity Service flagged the purchase of 5,000 November $37 calls for $1.25 to $1.26 as part of a bullish roll with shares at $30.78. This was clearly fresh buying, as open interest in the strike was only 2,512 contracts before that session began.

Market Rebellion co-founder Jon Najarian cited the activity that day on CNBC’s “Halftime Report” program as well as his 3@3 livestream.

Those calls have traded up to $3.10 so far today, more than 2 times their purchase prices. The stock rose 13.52% in the same time, underscoring how quickly options can far outpace gains in their underlying shares on a relative basis.

It is the second winning trade in the name posted on Market Rebellion in the last few sessions.

Long calls lock in the price where investors can buy a stock, letting them position for a rally at limited cost with the potential for significant leverage. They carry less risk than owning shares because the most that can be lost is the price of the options no matter how far the stock might fall.

NIO was last up 9.16% at $33.38, printing new all-time highs this session after reporting October delivery results, up 100.1% year-on-year.