r/thetagang
SPCE Calls Are Trading Above 400% IV Heading Into The SpaceX IPO
SPCE calls show extreme upside skew with IV over 400% as traders aggressively bet on a squeeze ahead of the SpaceX IPO.
- Extreme call skew with 25Δ call IV trading above 405%, indicating massive demand for upside exposure.
- Stock surged ~30% in a single day, showing strong upward momentum.
- Traders are aggressively pricing in a potential short squeeze higher ahead of the SpaceX IPO catalyst.
After my post on SPCE last week the situation keeps getting more interesting.
Current setup:
- Stock: $6.12
- DTE: 6 days
- ATM IV: 344%
- ATM straddle: $2.26
- Market-implied move: ±37%
Notice the call skew.
My model uses:
- 25Δ Put IV: 320%
- 25Δ Call IV: 400%
But the actual 25Δ call (around the $11 strike) is trading closer to 405% IV, while the equivalent 25Δ put (roughly between $4 and $4.50) sits near 320% IV. That's an enormous premium for upside.
My model is only made for 400% IV, which should be plenty in normal scenarios, but I guess I will update it this weekend to account for these plays in the future.
The stock was up another \~30% today, yet traders are still aggressively bidding for upside exposure ahead of the SpaceX IPO.
The probability distribution that is heavily tilted to the upside.
Whether the market is right or wrong isn't really the point.
People are clearly willing to pay for a squeezer higher.
One of the more extreme examples of upside call demand I've seen in a while. Curious if anyone here is trading this one.
I bought $4 C a couple weeks back for cheap. I also bought a few hundred shares around $4.20 and sold $6c against them for roughly $2. Dropped cost of shares to close to $2. Whether stock goes up or down, I profit. If it moons, I have calls for $4. If it goes down, my price per share is low enough to hold long term. Stock stays just under $6 is shares for free by selling off the $4C I have right at expiration. The only bad thing that could happen is the stock tanking to under $2.5 in a week
Nice one.
I don’t think SPCE is a great long-term hold, but you got a nice cushion there as these premiums are very juicy.
Good luck tmr!
2$ cost average seems like a decent cushion, but it's also not. There is absolutely no reason why this company should be worth more than a month ago in a week's time
Yeah, I heavily loaded on puts. When the scam dumps back below its 2.6 resting 3 weeks ago, guaranteed to make a killing. Very fair premium for a guaranteed big return.
I would have bought calls earlier but I didn't think anyone was stupid enough to play the pump and dump game again after the rug pull already happened on this one at 8.9 on June 2nd. Would be cool to have done an independent straddle where you sell at both ends.
That call skew is not purely a volatility read. SPCE is hard to borrow right now, and on hard to borrow names the borrow cost leaks into the call surface through put call parity, so the forward sits below spot and call IV gets inflated to compensate. Some of that 405 print is the cost of carry, not the actual move expectation the market is pricing. Practical upshot: if you sell those calls naked thinking you are harvesting rich vol, you are partly short the borrow and exposed to a squeeze plus early assignment, not just short gamma. The covered writers holding shares are the ones actually positioned to collect it cleanly. Worth splitting the quoted IV into the move component and the borrow component before deciding the calls are overpriced.
Boy do I wish I shorted this two years ago? I’m going to short SPCX
I'm holding $6 and $7 calls because 67
Exp on 7/17, I think I'm up 150% today
Hopefully it...moons...tomorrow 😂
Congrats man, that’s a huge gain.
Make sure to protect some of these profits though, would be a pity if it turns around.
Gl tmr.
It's just claude code bro
Did you know claude models are the absolutely most sycophantic? One of the least is gemini...practically the opposite. That guy just seems to right fight everything. I sometimes like making the two argue. Gives me some added perspective. If claude's context is initialized with any of your history, it gets worse and worse. I think they did it on purpose because it makes it more pleasing to interact with. But it validates batshit ideas. I have a ton of those.
Oh wow didn’t know that. I actually use Gemini a lot and (grudgingly) appreciate how many counter points it gives to consider in any random study topic I have,
Yep, me too. Sometimes it bullshits you though, so it seem like it just has some antagonistic behavior built in. Example, I asked it to download stock data and do some analysis on price bands. All I got was a lecture and how stupid I was and how I can calculate it but my idea wont work. Then I asked if it download the data, and it assured me it did. I asked what equation it used and it told me. Then I asked why the constraints were so tight, and it told me the moving range of the stock (from a graph I shared). Then I clarified all the peaks and valleys outside that range in the last week (thereby proving it was lying, never downloaded data, never did calculations), and then it just became super humble, changed its behavior, and started running the math. Very strange. I knew something was strange how Gemini replied without any delay.
Claude just tells me I'm a genius, then you can see it run the tool calls and you wait, then it shows you a matrix with calculations so I can YOLO it.
Both are dangerous. Maybe there is something in my chat history making gemini so antagonistic. Legal and investing are terrible with Gemini. Gemini seems to like coding though
My brother in christ label your axes this is impossible to decipher other than it's lognormal
I think it needs to be darker as well, it currently 'pops' too much. 😉
I also realized it was so confusing because I thought the ticker was spacex so the x axis made zero sense.
I am the meme.
Some of the call spread premiums seem insane. The risk is shares being called early but with the promise of more shares being dumped this week, it feels like some of the high strikes could be insanely profitable. I am considering going for them tomorrow.
Which API are you using for the data?
Would love to know
In other words, no profits to be made by buying puts/calls
You dont sell puts until after the dump happens. They may get cheaper if its pumps more.
Ya, but didn’t want to assume the relative risk of bagholding this pos.
I get it but its a publicly promoted scam meme stock. Accept the premiums as lost money from day 0, so everything else is upside. Know this stock is only valued at 2.6 where it was 3 weeks ago. Break-even is at 4.5-5. Buy cheap puts to minimize premium. Wait for the rug pull. It'll crash spectacularly in panic. The moon is the limit until the floor is the goal. Everyone will run for the exits. Years long bagholders will find exit liquidity in the morons playing musical chairs.
You make too much sense. Let’s see if gets liftoff.
400% IV on a 6-DTE call with that skew is pricing in something between a squeeze and a binary lottery event. the call/put skew spread you're describing (400 on calls vs 320 on puts) is telling you the market is pricing substantially more probability mass on a big move up than down, which makes sense if a lot of players are buying the IPO FOMO story. interesting setup but not one I'd touch from a theta-selling side -- the realized vol to justify those premiums would have to be insane, and short-gamma in a 400% IV product with 6 days left is not a position I want to explain to myself.