$NIO bulls are driving gains again

Option traders are driving big gains again today on upside positions opened in Chinese electric-car maker NIO (NIO).

On Oct. 13, Market Rebellion’s Unusual Activity Service flagged the purchase of 19,27 November $21 calls as part of a bullish roll from a previously winning position for $2.71 to $2.73 with shares at $21.31. This was clearly fresh buying, as open interest in the strike was only 11,551 contracts before that session began.

Those calls have traded up to $25.80 so far today, more than 9 times their purchase prices. The stock rose 119.76% in the same time, underscoring how quickly options can far outpace gains in their underlying shares on a relative basis.

This marks the third winning trade in the name to be posted by Market Rebellion this month.

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 9.24% at $47.06, printing new all-time highs this session.