r/options
SPCE huge profits
Author profited from HPE earnings and used the gains to buy SPCE puts, betting SPCE would crash after the SPCX IPO.
- SPCE is expected to crash due to market confusion with the upcoming SPCX IPO.
- High IV on SPCE puts presented a lucrative opportunity for a directional short play.
I sold CSP on HPE stock just before its latest earnings (I expected them to be good). They weee extremely good. Got 120 USD.
Invested them all into 4 long puts on SPCE at close to 300 % IV (!!!). Crazy, I know. But that was free money after all.
Why SPCE? Because it was clear that people won’t “confuse SPCE with SPCX after its IPO” (as it was claimed on multiple subreddits). So, why not to gamble a bit?
On a more serious note - it was a full directional play. I expected for the SPCE stock to crash after SPCX IPO. And OTM (yes, expensive) put options on SPCE looked like a good fit. Just I was not sure about the timing, so went with slightly further DTE options.
Also, why sell this great long put position? Enough gambling, I see no value in chasing extra penny in a volatile market.
So, all my profits went to 8 stocks of T. Not that exciting, but free money = free put options = free stock.