Each week, I’ll give an overview of a stock and Licia Leslie will follow that up with a chart analysis the next day. Bill Griffo will chime in with macro analysis and Andrew Giovinazzi will then finish out the week with a volatility breakdown.

Have a stock YOU want us to review? Email my team here. – Mark

Yo Pit Crazies,

The EV automaker with the Toyota-looking trucks is Rivian Automotive Inc. (Ticker: RIVN).  

They just announced a layoff, which is not great for a growing company … but the stock was up over $1 anyway on Thursday.

The implied vol is creeping up and gives a few clues as to what is up next.

At first glance, I thought this would be a short squeeze candidate with heavy short interest. 

The option prices are just in line, so the real jump in volume is likely good. old fashioned call buying …

Note the 30-day IV red line on the bottom chart is moving higher to cover the earnings cycle. But the longer term IV is near the lower end of the scale, so traders are not expecting much in the way of renewed short interest in the stock.

The bid for IV is picking up, so after bottoming this is likely to call buyers looking for a squeeze. Generally, the longer term puts would be more expensive, driving up implied volatility if short sellers were coming in hungry to short the shares. 

Note below on the 78 days to expiry options, there is a small bid for the put implied volatility over the calls …

If a squeeze is coming, keep an eye out for a bigger separation of those options’ implied volatilities.

Normally stocks that have huge short interest could jump on covering.RIVN looks more like it is at the start of this cycle rather than late in the cycle. That is still worth noting if the short interest gets large again and RIVN makes a trip to the high-20s or low-30s.

-AG