Shulou(Shulou.com)11/24 Report--

According to the news in the morning of July 11, Beijing time, with the improvement of fundamentals, Rivian, a new power company of American electric cars, has recently become the "darling" of the capital market. Options trading is extremely active, and investors are betting heavily on Rivian call options. Some market participants say this round of short-term options trading led to a nine-day rise in Rivian's share price for the first time in the company's history.

The sharp rally in Rivian's shares began last week when the company reported second-quarter results that exceeded Wall Street analysts' expectations and spurred trading sentiment. It is reported that Rivian shares have soared 83% in the past eight trading days, and the number of Rivian stock option contracts traded reached 831 million on Monday, local time, more than double the number of options traded on weekdays.

Daniel Kirsch, head of options at Piper Sandler, a US investment bank, said that most of Rivian's stock options trades are "ultra-short-term call options", which could lead to a further sharp rise in Rivian's share price.

It is reported that the out-of-price call option is a kind of unprofitable option, which will increase in value if the share price of the listed company rises in the future. If there are large-scale out-of-price call options in the market, it will often bring an additional pulling effect to the stock price.

It is reported that this kind of option trading phenomenon is also known as "gamma squeeze", that is, if options trading market makers sell stock options, in order to hedge the risk, they will often buy some stocks, resulting in a rise in stock prices.

In the past few years, the gamma squeeze has occurred in stocks where stock options are actively traded, such as Tesla, an electric car leader, and AMC, an American cinema company.

The above expert Keshi said that the phenomenon surrounding the Rivian share price reminds him of Tesla stock. When Tesla's stock price continues to rise, some option investors will buy ultra-short-term out-of-price call options, resulting in a stronger rise in Tesla's share price.

Kersh also points out that recent active traders in Rivian stock options include both retail and institutional investors.

On Monday, Rivian was the third-largest company in options trading volume in the US capital market, after Tesla and Apple. 42% of the Rivian options contracts expire this Friday.

In addition to Rivian, Weilai Motor Company was also very active in options trading on the day, ranking 10th in the entire market in terms of option trading volume.

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