SpaceX (SPCX) options started trading today, and the premiums are extremely elevated. Implied volatility is running well over 100%, which is creating some very high income potential for options sellers.
I pulled a few numbers using the Option Modeler to see what the actual yields look like.
Put Premium Analysis
Let's look at SPCX put options using the new Put Analyzer:
Put Analyzer on the Option Modeler, a premium tool on projectoption.com
Focusing on the July expiration (31 days to expiration):
The 150-strike put is offering a 3.5% yield in just one month (yield = call premium / cost of 100 shares)
That annualizes to roughly 42%
It sits 26% below the current stock price, giving it a 28% cushion and an estimated 81% Probability of Profit.
For anyone who’s bullish on SpaceX long-term but wants to be patient on entry, these cash-secured put yields are some of the highest I’ve seen on a major name in a while. But you have to want to own the stock in case you do get assigned on the puts.
Covered Call Side
If you already own shares, selling covered calls is also very attractive. Even the 300-strike call (roughly 50% above the current price) is offering around a 33% annualized yield right now:
Covered Call Analyzer
My Take
With volatility this high on the post-IPO hype and uncertainty, I lean strongly towards premium selling strategies, specifically cash-secured puts, covered calls, or running the Wheel. I’m much less interested in buying premium or running wide credit spreads, as these are much more speculative.
As a subscriber, you can pull up these exact setups yourself in the Put Analyzer and Covered Call Analyzer on any stock:
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