Rivian has been one of the most speculative stocks lately, as it rose from IPO price of $78 to all-time high of $179 (130% gain) in less than a week. With strong backings from Amazon and Ford Motors. This stock is touted as the new Tesla and may become the dominant leader of truck delivery. The rise coincided with the sell-off from Tesla (due to Elon Musk selling his Tesla shares) as hot money flows into Rivian stock.
However, Rivian fell by 18% on its first loss day yesterday and continues to fall another 13% today. I believe with Tesla gaining favour once again, money will flow out of Rivian and go back to Tesla. Also, for those who are sitting on a huge profit, they may sell off their shares to secure their profits, which creates more selling pressure on the stock.
I bought a LEAPS PUT option (my first LEAPS PUT) to capitalise on the bearish trend of Rvian.
Details are as follow:
Stock Name: Rivian
Type of Option: LEAPS PUT
Strike Price: $70
Date of Expiration: 20 Jan 23
Share price of Rivian when I bought the LEAPS contract: $129
I think as the hype surrounding Rivian has died off, there is a chance that the stock price will drop further, maybe back to IPO price. Just as how a LEAPS CALL can give me a magnified return when the share price goes up, LEAPS PUT on the other hand will also give me magnified gains when the stock price crashes.