I've been looking at AXTI and found an interesting options structure that takes advantage of the current volatility and call skew.
The stock is trading around $92 after a strong run over the past year and remains above its longer-term moving averages.
Current setup:
* Stock price: \~$92.2
* Expiration: Jan 15, 2027
* Expected move by expiration: \~$75
* 30Δ Call IV: \~145%
* 30Δ Put IV: \~142%
The structure:
* Sell Aug 21, 2026 $90 Put for \~$21.25
* Buy Jan 15, 2027 $90 Call
* Sell Jan 15, 2027 $200 Call
The premium from the short put is enough to fund the call spread, creating a near zero-cost structure. You even receive a slight credit for this one at the moment.
**What this creates**
* Maximum loss occurs if AXTI collapses and you're assigned shares at $90
* If AXTI is above $90 in August, the short put expires worthless
* If AXTI reaches $200 or higher by January 2027, the spread is worth $11,000 per contract
What was especially interesting is that the $200 call is still around a 44 delta option despite being more than 100% above the current stock price. As well as the fact that the 30delta put on the 213DTE corresponds to the $95 strike, AKA the 30 delta put is an ITM contract here.
The market is pricing a very wide range of outcomes and still assigning meaningful probability to substantially higher prices. As you can say in the expected move model I provided above.
Not saying AXTI will reach $200. I simply found it an interesting example of how elevated volatility can sometimes be used to build long-term bullish exposure without paying massively for it.
Full disclosure, I currently am long on $AXTI.
