The stock price of electric vehicle (EV) manufacturer Rivian Automotive (NASDAQ: RIVN) continues to record significant short-term gains amid increased interest in the company.
During this short-term rally, select investors are employing various strategies to achieve substantial profits.
One of the latest strategies saw a mystery investor transform a $25,000 investment into a staggering $2.5 million overnight, as highlighted by equities commentator Manz in an X post on June 26.
“The mystery $RIVN Call Buyer is going to turn 25K into 2.5 Million. 100x Return; overnight. Absolutely mind-blowing,” Manz.
According to the shared data, the investor purchased 5,000 call options for Rivian for $0.05 per option. These options expire on June 28, 2024, and a strike price of $14. The specific nature of the transaction was identified as a “sweep,” indicating a large order split into multiple smaller orders to increase the chances of execution at the desired price.
The implied volatility of these call options is notably high at 134, reflecting significant market expectations of potential price movement. At the time of the transaction, Rivian’s stock was trading at $11.73.
RIVN profitability amid increased investment
Indeed, Rivian stock has been a source of speculation for insider trading, resulting in some investors earning significant profits. For instance, as reported by Finbold, a single trader bought $14 call options and $13 call options, both set to expire on June 28. With an investment of $16,000, the trader was poised to make millions in profits.
Meanwhile, Rivian stock’s bullish sentiment can also be attributed to the growing trust in the company from established entities. Particularly, the latest development involved an investment of up to $5 billion by German automaker Volkswagen. The deal creates a joint venture, allowing the two companies to share technology.
Additionally, the company seems to be gaining investor confidence amid plans to cut costs and turn a profit.
RIVN stock price analysis
By press time, Rivian stock was trading at $11.96 with 24-hour gains of over 8%. On the weekly chart, the stock is up 10%.
The bullish sentiment is also reflected in the pre-market, with the stock likely to open higher on June 26. In the pre-market, Rivian was up 38%, trading at $16.54.
Overall, Rivian will likely continue with the bullish sentiment if the stock successfully holds above $15, as this will open the door to breaching the $20 resistance mark.