Nikola Corporation (NASDAQ:NKLA) dropped 10% Wednesday after the company said one of its major growth opportunities is now dead in the water. The company announced waste collection company Republic Services (NYSE:RSG) canceled its huge order of Nikola trucks.

The Nikola Trades: On Wednesday, Benzinga Pro subscribers received several option alerts related to unusually large Nikola trades. Here are some of the largest:

• At 9:39 a.m., a trader sold 300 Nikola call options with a $20 strike price expiring on July 16 near the bid price at $3.709. The trade represented a $111,270 bearish bet.
• At 9:44 a.m., a trader bought 1,000 Nikola put options with a $13 strike price expiring on Jan. 22 near the ask price at 95 cents. The trade represented a $95,000 bearish bet.
• At 9:55 a.m.., a trader sold 300 Nikola put options with a $12.50 strike price expiring on June 18 at the bid price of $3.80. The trade represented a $114,000 bullish bet.
• At 11:33 a.m., a trader sold 500 Nikola call options with a $20 strike price expiring on July 16 near the bid price at $3.80. The trade represented a $190,000 bullish bet.

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Why It’s Important For Nikola Investors: Even traders who stick exclusively to stocks often monitor option market activity closely for unusually large trades. Given the relative complexity of the options market, large options traders are typically considered to be more sophisticated than the average stock trader.

Many of these large options traders are wealthy individuals or institutions who may have unique information or theses related to the underlying stock.

Unfortunately, stock traders often use the options market to hedge against their larger stock positions, and there’s no surefire way to determine if an options trade is a standalone position or a hedge.

In this case, given the relatively small size of the largest trades on Wednesday, they are unlikely to be an institutional hedge.

Nikola’s Spiral Continues: The cancelation of the Republic Services is the latest headline in the shockingly rapid downfall of Nikola. The deal for 2,500 electric and recycling collection trucks was only announced back in August, and it represented a huge opportunity for Nikla to expand outside of its core truck business.

However, shortly thereafter, short seller Hindenburg Research published a report alleging Nikola was “an intricate fraud built on dozens of lies.” Founder and figurehead Trevor Milton left the company in the wake of the Hindenburg allegations. Subsequently, a major production deal with General Motors Company (NYSE:GM) was downsized, and GM no longer wanted to take an equity stake in Nikola as part of the terms.

Nikola shares rallied as high as $93.99 back in June when the stock was caught in the 2020 EV market mania, but the stock was trading back down at around $15 on Wednesday as the bull case for Nikola seems to get dimmer by the day.

Benzinga’s Take: Large Nikola option trades were mixed in nature on Wednesday. However, no matter how Nikola spins the news, there’s no question a large order cancelation is a negative for the company and its battered reputation.