What happened
Based on dispiriting news about a recent bull run on securities related to Rivian Automotive (RIVN -3.34%), investors sold out of the specialty electric vehicle (EV) maker on Tuesday. This tapping of the brakes resulted in a nearly 3% decline in the company's share price on the day, a notably worse performance than the 0.7% gain of the bellwether S&P 500 index.
So what
An article published by Reuters after market hours Monday was the source of that uninspiring news. It said that investors are flocking to buy options that pay out when Rivian's underlying stock increases.
According to the news agency, around 831,000 such options traded hands on Monday, more than double the average daily volume of such securities.
Generally speaking, stock investors want their holdings to rise because of fundamental reasons. In an EV maker's case, it's the building of a new factory, for example, or a massive order from a wealthy customer. A rally fueled by options buying likely feels flimsy and unsustainable to many.
Now what
That being said, some of the recent developments reported by Rivian are almost inarguably positive. For example, it kicked off 2023 by announcing that it had produced 24,337 of its EVs, and delivered 20,332. Yes, the company's original target was 25,000, but it didn't fall short by much.
And the fact that such a young manufacturer has quickly gotten to the point where it's posting five-figure production and delivery numbers is admirable.
Rivian also has first-mover advantage in its anchor category, pickup trucks, with its R1T pickup. This has given it prominence and clout on the market, although Ford in particular has pushed aggressively into the segment with its F-150 Lightning.
