Li Auto (LI) Surges 5.78% on Borrow Rate Hike and Strategic Collaboration – Is This a Short-Lived Rally or a New Trend?

Summary
• Li Auto (LI) surges 5.78% intraday to $17.115, breaking above its 52-week low of $16.11
• Indicative borrow rate jumps to 1.29%, signaling heightened short-covering pressure
• DJI collaboration event highlights L9 model integration with portable power solutions
• 52-week high remains at $33.12, but technical indicators suggest short-term bearish momentum

Li Auto’s sharp intraday rally defies its long-term downtrend, driven by a surge in short-interest costs and a high-profile partnership with DJI. The stock’s 5.78% gain—its largest single-day move since late 2023—has ignited speculation about whether this is a tactical rebound or a catalyst for broader momentum. With the 200-day moving average at $24.58 acting as a distant resistance, traders are now dissecting the options chain and technical signals to gauge next steps.

Short-Squeeze Dynamics and Strategic Alliances Fuel Li Auto’s Rally
The immediate catalyst for Li Auto’s 5.78% surge stems from a 0.19% spike in its indicative borrow rate to 1.29%, a metric that directly correlates with short-interest costs. This increase suggests aggressive short-covering as traders scramble to offset losses from the stock’s rapid ascent. Simultaneously, the DJI collaboration event—showcasing the L9 model’s integration with DJI Power 2000—has repositioned Li Auto as a tech-driven EV innovator. The demonstration of modular camping setups and portable power solutions in the Philippines highlighted the L9’s versatility, appealing to both urban and off-grid consumers. These dual forces—short-covering pressure and product differentiation—have created a self-reinforcing loop of buying interest.

EV Sector Mixed as Tesla Trails, Li Auto Outperforms
While Li Auto’s rally stands out, the broader EV sector remains fragmented. Tesla (TSLA), the sector leader, fell 0.01% intraday, contrasting with Li Auto’s 5.78% surge. Other EV peers like XPENG and NIO showed modest gains, but Li Auto’s performance underscores its unique positioning in the premium NEV market. The company’s focus on plug-in hybrids and smart mobility solutions, combined with its recent strategic partnerships, has differentiated it from pure BEV competitors facing regulatory and pricing pressures in China. This divergence highlights Li Auto’s ability to leverage hybrid technology and ecosystem integrations in a competitive landscape.

Options Playbook: Capitalizing on Li Auto’s Volatility with Gamma-Driven Calls
• 200-day average: $24.58 (far above current price)
• RSI: 21.15 (oversold)
• MACD: -0.94 (bearish), Signal Line: -0.93 (bearish), Histogram: -0.01 (narrowing bearish divergence)
• Bollinger Bands: Upper $18.91, Middle $17.50, Lower $16.10 (current price near lower band)

Li Auto’s technical profile suggests a short-term rebound from oversold RSI levels, but the 200-day average remains a distant hurdle. The options chain reveals two high-conviction plays: LI20251226C17 and LI20251226C17.5, both with strike prices near the current price and high gamma/theta profiles. These contracts offer leveraged exposure to a potential continuation of the rally.

Top Option 1: LI20251226C17
• Contract Code: LI20251226C17
• Type: Call
• Strike Price: $17.00
• Expiration: 2025-12-26
• IV: 33.85% (moderate)
• Leverage Ratio: 41.74% (high)
• Delta: 0.57 (moderate sensitivity)
• Theta: -0.069 (high time decay)
• Gamma: 0.458 (high sensitivity to price movement)
• Turnover: 12,851 (liquid)

This call option is ideal for traders betting on a sustained rebound above $17.50. The high gamma ensures rapid delta expansion if the stock breaks above $17.50, amplifying gains. A 5% upside to $18.00 would yield a payoff of $1.00 per contract, translating to a 241.67% gain on the strike price.

Top Option 2: LI20251226C17.5
• Contract Code: LI20251226C17.5
• Type: Call
• Strike Price: $17.50
• Expiration: 2025-12-26
• IV: 33.62% (moderate)
• Leverage Ratio: 90.08% (very high)
• Delta: 0.34 (moderate sensitivity)
• Theta: -0.049 (moderate time decay)
• Gamma: 0.432 (high sensitivity)
• Turnover: 11,702 (liquid)

This contract offers explosive potential if Li Auto closes above $17.50. The 90% leverage ratio means a $0.50 move in the stock could translate to a 45% gain. A 5% upside to $18.00 would yield a $0.50 payoff, representing a 137.5% return on the strike price. Aggressive bulls should consider LI20251226C17.5 into a break above $17.50.

Backtest Li Auto Stock Performance
Here is the backtest result of LI performance after 6% intraday surge from 2022 to now. The backtest shows that the stock experienced a significant drop of -6% intraday plunge from 2022 to now, with a subsequent recovery period of 30 trading days before regaining momentum. This aligns with the platform's default analysis window for single-stock event studies.

Act Now: Li Auto’s Rally Faces Critical Junctures
Li Auto’s 5.78% surge is a tactical rebound driven by short-covering and product differentiation, but sustainability hinges on breaking above $17.50. The RSI’s oversold reading and Bollinger Bands’ lower-bound proximity suggest a near-term bounce, but the 200-day average at $24.58 remains a distant target. Traders should monitor the $16.15 support level and $17.50 resistance. Meanwhile, Tesla’s -0.01% intraday decline underscores the sector’s mixed momentum. For those seeking directional bets, LI20251226C17.5 offers high leverage if the stock closes above $17.50. Watch for a breakdown below $16.15 to trigger a retest of the 52-week low.