Why This Trader Says Nio Stock Could Move 25% In Either Direction

NIO Inc - ADR NIO is set to report its fourth-quarter results after markets close on Thursday. The stock was moving higher in premarket trading.

On CNBC's "Options Action," Tony Zhang said the stock traded more than 1.3 times its average daily volumes.

The options market is implying a 10% move in NIO’s stock versus the average of 6.3% over the last eight quarters, he added.

There was a buyer of 1,000 of the April 18.5/26 strangles for an average price of $1.51 per contract, Zhang mentioned. This is a bet in both directions — to the upside or the downside — of as much as 25% by the April expiration, he said.

Photo courtesy of Nio.