Why Options Activity Caused Jon Najarian To Cut Rivian's Stock

Electric vehicle startup Rivian Automotive Inc RIVN made its highly anticipated public debut last month. Now that the time has come for the Amazon.com Inc AMZN-backed EV company to announce its quarterly financial results, some traders are betting against the name.

"There's speculative put buying all the way down to the $85 strike," Market Rebellion co-founder Jon Najarian said Thursday on CNBC's "Fast Money Halftime Report."

Najarian doesn't like seeing put buying that far below where the stock is trading. As a result, he exited his position ahead of earnings after today's closing bell.

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Rivian is currently trading around the $110 level. It's down about 5% today, but Najarian said it could be because of the plant the company plans to build in Georgia. Reports suggest Rivian is going to build a $5 billion battery and assembly plant near Atlanta.

He plans to hold the stock through earnings until speculative put buying surged.

"I wanted to hold it ... but I decided there is too much put activity for me to hold," Najarian said.

Investors will be looking for updates on vehicle production, pre-orders and deliveries. 

Photo: courtesy of Rivian.