NIO Inc (Symbol: NIO) introduced new options today, set to expire in April 2027, offering investors opportunities in both put and call contracts. The $5.00 put option carries a bid of $0.50, allowing sellers to potentially acquire shares at an effective cost of $4.50, a 13% discount compared to the current trading price of $5.72. There is a 74% chance this put option could expire worthless, which would yield a potential 10.00% return on the cash commitment.
On the call side, the $7.00 strike price option has a bid of $0.96. If an investor purchases shares at $5.72 and sells this call, they could achieve a total return of 39.16% if the stock is called away. However, there is a 47% likelihood the call will expire worthless, enabling the investor to retain both the shares and collected premiums, translating to an annualized return of 18.45%.
Implied volatility for the put is 91% and for the call, 69%. Actual trailing twelve-month volatility is calculated at 61%.
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