3 EV Stocks Getting Smart Money Attention

Hey Traders,

On Saturday we talked about oil and gas stocks, so today let’s take a look at …

Electric vehicles!

Now, while oil has been rallying, one might think EV stocks would rise in tandem …

After all, what better motivation than higher gas prices to get people to make the move from standard to electric?

But … as you’ll see in the names below, that does NOT seem to be the correlation we are seeing here …

Here’s three EV stocks making moves … and a look at some deep-pocket options plays.

Faraday Future Intelligent Electric (Ticker: FFIE)

Faraday Future Intelligent Electric (Ticker: FFIE) has not been having an easy go as of late. The shares only started trading in July 2020, and after peaking at $20.57 earlier this year, they’re now notching a streak of all-time lows, closing on Friday at $8.05. 

Chart courtesy StockCharts

And with the stock ending the week on a low note, it shouldn’t come as a surprise that put open interest on the stock is at an annual high, with 1.35 puts opened for each call option.

Of course, this trade that crossed the tape mid-week last week certainly didn’t help …

This trader sold-to-close their 13,000 contracts of the October 8-strike puts for $1.05 — given FFIE’s recent price history, I would assume the trader made some money on these.

They used some of the proceeds to purchase another 13,000 contracts at the further-out November 5-strike puts … and pocketed a cool $910,000 to take home.

This Smart Money close-and-roll doesn’t spark much confidence about FFIE’s near-term performance, in my humble opinion …

Workhorse Group (Ticker: WKHS)

Workhorse Group (Ticker: WKHS) is not faring well, feeling sector headwinds in combination with their own self-created drawdown catalysts …

WKHS has had one obstacle after another lately, with executive changes, truck recalls, and halted production all weighing on the shares.

Chart courtesy StockCharts

However, last week Big Money seemed to have some faith that WKHS’s slide wouldn’t continue much longer.

This trade purchased 8,000 January 2022 6-strike puts for $1.12, which seems bearish on the surface …

However, coupled with a stock trade, these puts are actually a $896,000 hedge against a long stock position. These puts made the trader’s stock position delta-neutral, so they are temporarily protected from further decline out of WKHS.

NIO Inc (Ticker: NIO)

NIO has faced headwinds from both skepticism surrounding Chinese stocks, and the EV sector. However, last week the shares managed to gap slightly higher after a better-than-expected report for third quarter deliveries.

Chart courtesy StockCharts

Still, the NIO chart is hardly the picture of health, but in the pits, the shares have been hit with a bevvy of Big Money attention. Though the trades are almost equally split between bullish and bearish bets, it looks like the bulls currently have the upper hand in terms of volume.

Of course, a bullish analyst note and $56 price target out of Goldman Sachs certainly helped NIO’s case.

Today, the biggest trade crossing the tape so far is a covered put position, where one trader sold a block of 3,088 January 2022 30-strike calls while simultaneously selling over 64,000 shares short. That’s a pretty hefty bearish bet, and one that I wouldn’t quickly position myself against.

Personally, until I see some of the headwinds facing NIO start to dissipate, I would be reluctant to join the bullish bets currently placed on this name.

Your Only Option,

Mark Sebastian

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