Key insights
- This post discusses a retail trader's speculative strategy involving out-of-the-money call options for SPCE, anticipating a short squeeze. The trader is seeking to understand implied volatility dynamics for newly added strike prices and believes option premiums will increase regardless of the stock's direction at open due to high retail interest. The speculative nature and focus on a single, volatile stock with limited broader market impact result in a neutral influence score.
I've been in SPCE for more than a week now and bought far OTM $6 strike calls, so I've made a very nice profit now. Like the gambling regard I am, however, I am not satisfied yet and I'm looking to fly to the moon. I've taken everything out on friday and im looking to re enter. I've never been part of such a squeeze before so I am asking all the regarded apes here who have been in these situations before to tell me how the following works:
I am sure there will be others like me who got in quite a bit before who will be looking to exit as well, since they've already 10-200xed. Therefore I think there could definitely be a drop at open. On the other hand, since there are so many apes who want to jump in, I would not be surprised if the stock flies up at open.
Since friday after close they have added new strike prices, which of course have not yet been bought. How does the IV calculation for those strikes work? If it is the case that it is not priced in that every regard possible will buy the furthest OTM strikes, this mean that the IV will increase massively since that is based on the open interest of the stock as I've understood; the more people buy, the higher the premium, therefore the higher the IV, which at some point will stabilize. If this is the case, wouldnt it matter if the stock rises or drops at open, because the option premium will skyrocket anyway because of the extreme increase of open Interest? Is it literally the case that it cannot go tits up, if you decide to sell soon after the parabolic increase in IV?
Either way, I'm looking to YOLO half of my port on it at open and see what happens.
Godspeed soldiers, and see you on the moon