NIO calls crushed
Posted By John W. B. Rich Posted On Comment (1)

NIO Call Holders Crushed

NIO reported earnings this afternoon, and the results were mixed. The adjusted loss was slightly lower than expected (12 cents vs. 17 cents), and revenue was just a tick higher than expected ($666.6 million vs. $663.29 million).

However, the stock is down slightly after-hours. Tomorrow morning, option holders will likely wake up to a bloodbath. Implied volatility was astronomical; calls near the money popped above 200% IV this week. Overall, the option markets were pricing in about a 15% move.

In the Facebook group “Day Trading Stocks and Options”, many call holders didn’t even seem to understand the concept of IV crush. See this post from the moderator and the subsequent replies:

NIO call holders don't understand IV crush

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