What is NIO
NIO Inc. (NIO), whose name means "Blue Sky Coming" in Chinese, is a premium smart electric vehicle (EV) manufacturer based in China. The firm creates premium electric vehicles with a focus on connectivity, self-driving, and artificial intelligence (AI). It also provides EV charging stations as well as insurance, maintenance, roadside support, and a more comprehensive data bundle.
The use of the terms "smart" and "connected" by electric vehicle manufacturers is based on "Internet of Things" (IoT) concepts. They're commonly used to describe technology that gives consumers access to applications that automate certain processes and rely on connectivity to other devices or a network.
NIO competes for sales against SAIC Motor Corp. (600104) and Dongfeng Motor Corp. in the extremely competitive Chinese automotive market (DNFGF). BYD Co. (1211) and Geely Automobile Holdings Ltd. (GELYF) are two traditional Chinese automakers that have entered the EV market. New startups like Li Auto Inc. (LI) and XPeng Inc. (XPEV), as well as overseas rivals like NIO Inc., fight with NIO (NIO). As more companies enter the EV industry, the business expects competition to heat up.
NIO is a publicly traded company, making its stock available to anyone of legal age interested in purchasing shares.
What are NIO Shares (NIO)
NIO shares represent a unit of ownership in NIO Motors Inc. – and they are among the world’s most popular financial instruments. NIO shares will rise and fall in value according to how well the company is performing at a given moment in time. Better-than-expected earnings will make NIO share prices rise, while weaker earnings will make share prices fall. However, there are many reasons why a company's share price can change.
People trade NIO shares because, just like other financial instruments, they can be an opportunity to invest money. At a basic level, you can take a position on NIO shares to get exposure to economic growth. If an economy is in good shape, you might find that companies operating in a specific economic branch or industry will grow too.
Company growth is correlated with share price increases, which is what people are hoping for when they buy NIO shares.
Because NIO's stock is publicly traded on U.S. stock exchanges, the firm is obligated to publish its financial performance to the Securities and Exchange Commission of the United States (SEC). The corporation reports its financial statements in accordance with Generally Accepted Accounting Principles (GAAP) in the United States (GAAP).
It’s easy to sour on equities like Nio (NYSE:NIO). The so-called Tesla (NASDAQ:NIO) of China shot up more than 3,000% between March 2020 and January of this year. Investors were no doubt dreaming of mammoth gains in 2021 with a growth curve that would make them feel like Elon Musk.
Well, that hasn’t happened. NIO stock has fallen 50% from its high and is currently trading below $40.
Production problems have plagued plenty of electric vehicle companies thanks to the global shortage of semiconductor chips. There are also global shipping delays and, of course, continued tension between China and the West, particularly the U.S.
NIO stock is traded on the New York Stock Exchange under the NIO ticker.
If all that makes you want in on NIO’s electrifying growth, here is everything you need to know to buy NIO stock & shares to invest in NIO.
How to Buy NIO Shares
Learning how to buy shares may sound complicated, but you will need to do some research — and learn the basics — before making your first investment.
- Learn the difference between investing and trading
- Review NIO’s performance and outlook 2022
- Understand the risks and charges
- Choose your trading platform and place your orders
- Stay up to date with the latest news and rumors about NIO
1. Learn the difference between investing and trading
People have two options to buy shares of stock online. Firstly, they can buy shares in companies on the exchanges where they are listed. For instance, you can buy NIO stock on the NASDAQ exchange, so you own a share in the company (investor). Alternatively, they can buy NIO shares without owning them, speculating on the price of the underlying asset (trader).
Investing and trading are similar terms that some people will sometimes use interchangeably – but there are significant differences for you to be aware of.
Investing in NIO Stock
Investors buy NIO shares hoping their price will rise and they can sell them later for a profit, adhering to the basic principle of buying low and selling high. Investors will take positions over a longer period, attempting to profit from share price changes as well as dividend payments.
While this means that they might need more initial capital to get started when compared to trading, their losses would be capped at this initial price tag. That said, investors should be aware they might get back less returns than they initially invested.
Investors will buy NIO shares to:
- Make a profit from the NIO share price rising
- Receive an income from dividends if the company pays them
- Benefit from the effects of compounding
This last point requires investors to hold onto their shares for an extended period. That’s why you’ll sometimes hear the phrase ”time in the markets is better than timing the markets” when talking about share investments.
>> Learn how to invest in stocks
NIO (or any single stock, for that matter) can be a very volatile investment. You can lower the risk by diversifying your investment holdings.
An index fund is a type of mutual fund or exchange-traded fund (ETF) with a portfolio constructed to match or track the components of a financial market index, such as the Standard & Poor's 500 Index (S&P 500). An index mutual fund provides a broad market exposure, low operating expenses, and low portfolio turnover. These funds follow their benchmark index regardless of the state of the markets.
NIO currently is not included in a well know stock index.
Automotive exchange-traded funds (ETFs) provide exposure to the performance of companies within the global automobile industry.
NIO makes up 11% of PGJ (Invesco Golden Dragon China ETF ), 10% of KGRN (KraneShares MSCI China Clean Technology Index), 9% of FNI (First Trust Chindia ETF ), 8.0% of QCLN (First Trust NASDAQ Clean Edge Green Energy I).
>> Learn what ETFs are and how do they work
Trading NIO CFDs
On the other hand, traders might seek to capitalize on short-term share price gains. Rather than investing in the shares, traders speculate on the shares’ value. They can speculate on it rising by going long, as well as falling by going short.
Trading NIO stock means that you are speculating on a share’s price movements with derivatives like CFDs. In other words, you are purchasing NIO shares without taking direct ownership.
Leverage is available when you use this product, giving you full market exposure for an initial deposit – known as margin – to open your position.
For example, a trader who wanted to buy 100 NIO shares CFD at $40 per share would only require $800 of trading capital, thereby leaving the remaining $3,200 available for additional trades.
But keep in mind that leverage can increase both your profits and your losses as they will be based on the full exposure of the trade, not just the margin requirement needed to open it. This means losses, as well as profits, could far exceed your margin.
With CFDs, you can ‘buy’ (go long) the shares if you think the NIO stock’s price will rise, or you can ‘sell’ (go short) if you think the NIO stock’s price will fall.
>> Learn what is CFD trading and how it works
Going Long NIO CFD
NIO has a sell price of $40.20 and a buy price of $40.40.
NIO’s next earnings announcement is fast approaching, and you expect it to be good news. You think the company’s share price will go up, so you buy 200 NIO shares CFD at $42.40. This is the equivalent of buying 200 NIO shares.
Because in CFD trading you can use leverage, you do not need to put up the full value of NIO shares. Instead, you only need to cover the margin, which is calculated by multiplying your exposure with the margin factor for the market you are trading.
So, if NIO has a margin factor of 20%, your margin would be 20% of the total exposure of your trade (200 share CFDs x $42.40 = $8480), which is $1,696.
If your prediction is correct:
When NIO announces its results, it is clear the company had a successful quarter – and as you had predicted, its share price climbs. You decide to close your position when it reaches $48.40, with a buy price of $48.60 and a sell price of $48.40
You reverse your trade to close a position, so you sell your 200 CFDs for $48.40.
To calculate your profit, you multiply the difference between the closing price and the opening price of your position by its size. $48.40 – $40.40 = $8, which you multiply by 200 CFDs to get a profit of $1,600.
If your prediction is wrong:
NIO’s results are worse than expected, and its share price immediately falls. You decide to cut your losses and sell your 200 CFDs at $39.40.
Your position has moved $1 against you, meaning you make a loss of $200.
Going Short NIO CFD
Shorting with derivatives can be an effective way to protect your investments against downward price movements in your non-leveraged investment portfolio. Also, it can be a way to generate profits outright from shares that are falling in value. But when you go short, your potential losses are theoretically uncapped because there is no limit on how high a company’s share price can rise.
Here is an example:
Suppose NIO shares are currently trading with a sell price of $40.20, and you think the price will go down. So, you decide to open a short CFD position on 500 NIO shares CFD. A week later, the buy price reaches $36.00, and you close your position. This means you made $2,100 in profit ([40.20 - 36.00] x 500 = $2,100), excluding additional costs.
If the price rises, you register a loss. For example, if NIO shares rose to a price of $41.20, you would make a $500 loss instead, excluding additional costs.
When you create a trading account with CAPEX, you will be able to:
- ‘Buy’ (go long) or ‘sell’ (go short) NIO and other 2,000 international shares to speculate on their price rising or falling
- Take a position on our range of ETFs to get exposure to a basket of shares from an entire country, index or sector that could be rising or falling in price.
- Trade a host of global indices to go long or short on the performance of an entire economy with a single trade.
- Use QuantX, the smart portfolio builder that helps you cover the popular industries and only invest in the top-performing stocks.
2. Review NIO’s Performance and Outlook 2022
Before buying NIO stock—or any stock (see our guide on how to buy shares)—it’s wise to do some research into the company’s financials, performance, and outlook. The easiest place to get started is through a company’s annual reports and quarterly reports. Public companies like NIO are required to publicize detailed information about their financial health in these.
You can find these on NIO’s investor relations site or by searching the Securities and Exchange Commission’s (SEC) database.
You may also turn to experts for their input. Brokerage companies frequently release commentary on major stocks and industries, and third-party evaluators like Trading Central provide comprehensive technical and fundamental analysis.
When you combine financial data with expert insight, you will be able to decide how much of your money you want to put into NIO stock.
Before you load up the trunk with NIO shares, pop open the hood and see what you are really getting into. Remember, when you buy NIO stock, you are purchasing a small portion of an actual business:
Nio, Inc. designs, manufactures and sells smart and connected electric vehicles.
NIO's balance sheet, income statement, competition, and management (all explained in our guide on how to research stocks) will help you give the company a good once-over.
You can access research, analyst ratings, and other key information about NIO via your brokerage account or a financial information website. If you like what you see, your next step is to consider whether NIO fits into your current investment portfolio.
- NIO's market capitalization is $67.6 B
- NIO's upward move is 58.7% in 1 year
- Earnings per share (EPS) were up 7.3% and are forecast to grow 92.71% per year.
The Chinese company NIO was affected, like other stocks in the country, by the uncertainty about the tightening of regulations in their country and the possibility of ceasing to be listed on the American stock exchanges.
- Revenue in 3Q 2021 was $1.31B, beating market expectations
- NIO delivered 10,628 vehicles globally in September 2021, increasing by 125.7% year-over-year
- NIO delivered 24,439 vehicles in the three months ended September 2021, increasing by 100.2% year-over-year. This result beat the expected 22,500 to 23,500 vehicles.
Over the last 3 years on average, earnings per share (EPS) have increased by 124% per year but the company’s share price has increased by 142% per year, which means it is tracking significantly ahead of earnings growth.
The price-to-earnings ratio (PER) is 16.39. Fair Price according to valuation is 36.30$, which means NEO share prices are around 13% overvalued at a stock price of 40$.
*Last update: November 2021. Source: Yahoo Finance.
NIO Chart Price
Technical traders analyze price charts to attempt to predict price movement. The two primary variables for technical analysis are the time frames considered and the technical indicators that a trader chooses to utilize.
Our web-trading platform, for example, offers 6 chart types (including the famous Japanese candlestick chart) to help you analyze price performance across different timeframes. It also enables you to deal in an instant – directly from the charts. You will be able to open, close and edit positions in just a couple of clicks.
Trading charts always feature distinct patterns that technical analysts can use to interpret the behavior of buyers and sellers. These chart patterns can give traders an indication of where the market could go next. As you will notice when you look at a chart, the market will usually move in one overall direction or trend. There are three types of market trends: uptrends, downtrends, and sideways trends.
From a technical perspective, since February 2021, it has experienced a 50% drop and since March it has been moving wide in a descending triangle with support at $32.
This is a bearish pattern that most likely will be solved on the downside with a breakout, followed by a weak recovery to the actual support level $32 that will become resistance, or in the most positive scenario to the dynamic resistance of the pattern, up to $40.
In the case of such NIO evolution (based on the triangle pattern identified on the weekly and daily price chart), the most likely target of the downside movement is equal to the height of the pattern. Here we should use percentage, not an absolute value. A decline up to $15 won't be a surprise.
For bulls out there, this is the lowest price that keeps the trend on the bullish side. For long positions, traders will wait for a false breakdown, that should be followed by a continuation above the dynamic resistance of the triangle pattern.
To buy NIO shares or not?
It is recommended to watch for stocks in the major long-term support area. We should buy NIO shares at relatively cheap prices (compared to historical values), not expensive prices. Also, have an exit plan for how you will exit a profitable trade. Define how and why you will exit. Since we used to support to get into the trade, you may consider exiting just below a long-term resistance level.
If buying at support, and planning to exit just below resistance, the upside potential should outweigh the downside risk by at least 2:1 or even 3:1. That means that if you buy NIO shares at $35, you should be reasonably able to get out of the stock at $25 or higher. In the absolute worst case, you lose $10 a share, but based on the historical chart it is quite feasible to go up $20/share or more. This is known as the risk/reward ratio, a key indicator when deciding to buy NIO shares or not.
With CAPEX WebTrader, you can perform an in-depth analysis of the charts with 90 indicators (including moving average, MACD, RSI and Bollinger Bands). The platform also supports an interactive trading activity with high-end research tools helping you interpret market data.
3. Understand the risks and charges
Trading can be seen as riskier than investing due to leverage. But investing also carries a risk – and there is no guarantee that your investments would increase in value, so you could receive back less than you initially invested.
Before deciding to trade in shares, you should take steps to manage your risk. We have courses at CAPEX Academy that take you through risk management and how to mitigate your exposure to risk in the financial markets.
Our costs and charges for trading vary depending on the product that you use to take a position.
NIO (NIO) CFD Trading Conditions
|SPREAD PER UNIT
|OVERNIGHT ROLLOVER - LONG
|OVERNIGHT ROLLOVER - SHORT
- Spread represents the difference between ASK price and BID price.
- Future Rollover adjustment consists of the difference in price between expiring contract and new contract as well as the spread of the CFD.
- Swap is the amount credited to or debited from an account where positions are held overnight.
- Inactivity fee represents the monthly amount deducted if no activity is recorded for 12 months in an account.
4. Choose your trading platform and place your orders
To buy NIO shares CFD with CAPEX Webtrader is very easy and intuitive. Opening an online trading account is as easy as setting up a bank account. Here are the steps:
Open an account or log in
First, create an account or log in on capex.com. To open an account, click the "Register" button and complete your details.
Once the platform is accessed, the registration process must be completed in order to operate with real money. Click "Complete the Registration and Start Trading".
To log in, from the CAPEX website, click on "Login".
Deposit funds into your account
To trade with a live account, it is necessary to deposit funds. This is done from the platform itself by clicking on the "Add funds" button:
Also, it is possible to trade on a risk-free demo account with a balance of € 50,000, which is ideal for getting to know the platform and testing trading strategies.
CAPEX offers you different payment methods: debit cards, credit cards, bank transfer, skrill, and more.
It is noteworthy that CAPEX does not charge any fees or commissions for depositing funds.
Look for NIO shares
To view NIO shares (NIO) real-time price and chart on the trading platform can click on the "Search" icon located in the left panel or by clicking on "Shares" and then select the instrument, in this case, NIO.
Use the indicators and drawings to analyze the chart
Click the indicators icon and select your favorite ones. There are trend-following, oscillators, volatility and support/resistance indicators available. To learn how many indicators to use and how to combine then visit the Technical Indicators section in CAPEX Academy.
Set up the order to buy NIO shares
To buy NIO shares CFD, click on the "Buy" button and a window is displayed to configure the purchase order:
The number of NIO shares to be purchased must be entered and it is allowed to set up a Stop Loss to limit the potential loss, and/or a Take Profit to close a profitable position once the NIO stock reaches a specific price. These orders can be configured based on price, pips, cash value or percentage.
To proceed with the purchase, click on "Place Order".
However, NIO trading does not end here. You will want to check out the next step to make sure you are investing your money as well as you can.
Why Trade NIO with CAPEX?
- Advanced AI technology at its core: Whether they prefer the web-based and mobile-ready WebTrader or favor the highly popular MetaTrader 5, we make sure investors make effective use of fast and reliable trade execution speeds, complex order and risk management tools, advanced charting options, powerful research tools in collaboration with highly-regarded platforms such as Trading Central or TipRanks.
- Trading on margin: Providing trading on margin (up to 5:1 for individual equities), CAPEX gives you access to the stock market with the help of CFDs.
- Trading the difference: When trading NIO CFD, you do not buy the underlying asset itself, meaning you are not tied to it. You only speculate on the rise or fall of the NIO stock price. Online trading with CFDs is nothing different from traditional trading in terms of strategies. A CFD investor can go short or long, set stop loss, take profit, and apply trading scenarios aligned with their objectives.
- All-round trading analysis: The browser-based platform allows traders to shape their market analysis and forecasts with sleek technical indicators. CAPEX provides live market updates and various chart formats, available on desktop, iOS, and Android.
- Focus on safety: CAPEX puts a special emphasis on safety:
- capex.com is a website operated by KW Investments Limited, which is authorized and regulated by the Seychelles Financial Services Authority, license number SD020.
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- Global partnerships: CAPEX is proud to be the Proud Sponsor of Juventus, one of the most prestigious football clubs in the world, a football club that has a special place in the hearts of the people of Italy, with a strong legacy and a dedicated community.
5. Stay up to date with the latest news and rumors about NIO (NIO)
Get the latest NIO Inc. (NIO) stock news and headlines to help you in your trading and investing decisions.
History of NIO Inc.
William Li, Chairman of Bitauto and NextEV, created NIO in November 2014. Tencent, Temasek, Sequoia, Lenovo, and TPG were among the first to invest in NIO after its inception. The NIO EP9 sports vehicle, the brand's first model, debuted on the same day as the company was founded.
In October 2016, NIO stated that the California DMV had granted it an "Autonomous Vehicle Testing Permit," and that it will begin testing autonomous vehicles on public roads under the "Autonomous Vehicle Tester Program" criteria. According to the corporation, vehicles with levels three and four autonomy would be released.
NIO established its first battery swap station, branded the "Power Swap Station," in the Nanshan District of Shenzhen, Guangdong, China, in May 2018. Only ES8 car batteries would be sold at this station.
Nio announced $1 billion in new investment from a group of Chinese investors in late April 2020, which the firm needed due to its inability to sell its automobiles.
Nio will transfer assets to a new company, Nio China, based in Hefei, as part of the agreement.
Nio partnered with Contemporary Amperex Technology Co., Limited ("CATL"), Hubei Science Technology Investment Group Co., Ltd., and a subsidiary of Guotai Junan International Holdings Limited to launch a Battery as a Service (BaaS) and develop a battery asset management company in August 2020. Each is putting in RMB200 million for a 25% stake in the business. BaaS contributes to a 25% reduction in the cost of purchasing Nio electric vehicles.
Nio announced a Norway growth strategy in May 2021, stating that automobiles would be delivered to Norway by September 2021. NIO shipped 24,439 ES8, ES6, and EC6 in the third quarter of 2021, a new quarterly high and a 100.2 percent year-over-year increase.
*Last update: November 2021. Source: Wikipedia