I've enjoyed watching the SPCE rise and fall from the sidelines. I was thinking about getting $2.50 strike puts for 0.05 Friday morning as it was taking off, but the IV approaching 240 at the time dissuaded me. Now, that the momentum flipped and the stock has taken a tumble, I noticed the same puts up to 0.06 with IV of 220.
Correct me if I'm wrong, but IV crush typically applies for *known* event (like earnings). If the share price of SPCE continues to fall at an unpredictable rate toward the approaching SpaceX IPO, and beyond, couldn't the IV stay elevated enough that the puts would print big time after everyone no longer has a reason to hold (June 12)? Won't that be an impetus for the share price to plummet dramatically again as everyone holding out hope for ticker confusion no longer has any reason to stick around? In addition to the share dilution being finalized and previous SPCE bag holders using this as an opportunity to lighten their loads, it seems like there's a solid chance that the price ends up being below the $2.47 share price recently before everything pumped, allowing a nice profit with the biggest potential downside being that baghodlers are gripping too tightly by June 18th expiration. I struggle to see how IV crush won't become a non factor as it approaches ATM.
Where's the flaw in my logic here?