“NIO Stock Is Going Nuts. This Is the Best Explanation.”
June 29, 2021
“NIO (ticker: NIO) stock gained almost 10% Monday and shares are up 28% over the past month. The S&P 500, for comparison, rose 0.2% Monday and is up 2% over the past month. Call options volume, which rose almost 200% on Monday compared to Friday, is perhaps the biggest reason NIO shares might be more volatile.
Call options give the holder the right to buy a stock at a fixed price. (Buying a call is a bullish take on the underlying stock.) Brokers will sell and trade options contracts because they want to earn a commission on a trade. But brokers don’t want to be short a call option, which means they’ll have to take a loss if the stock rises…”
https://www.barrons.com/articles/nio-stock-options-volume-51624921009?siteid=yhoof2