Investment analysis by Ruslan Averin — originally published at averin.com.
SPCX options went live this week, one week after SpaceX IPO'd at 135 and ripped roughly 20%. The chain is a once-in-a-cycle setup: triple-digit implied volatility, no IV history for the market makers to lean on, and bid-ask spreads wide enough to drive a truck through. Retail's instinct is to buy calls and dream. Mine is the opposite. When uncertainty is this overpriced, the edge belongs to the seller of volatility — but only the seller who never lets a single trade get large enough to matter. This is the full playbook, ranked by safety, with the rules that keep it safe.
The one idea everything rests on
A new listing with no trading history forces market makers to price maximum uncertainty. They cannot lean on years of realized volatility, so they quote options for chaos. That makes implied volatility extravagantly rich. The seller of that option is being overpaid for risk; the buyer is paying a tax that decays every day. So the prime directive is simple:
Sell the volatility. Do not buy it. And define what "wrong" costs you before you put it on.
Everything below is a different-shaped way to obey that directive at a different point on the risk ladder.
The risk ladder, safest first
| Rank | Strategy | Risk | Best for |
|---|---|---|---|
| 1 | Bull put spread | Fully defined (capped both ways) | Anyone; the default safe trade |
| 2 | Cash-secured put | Defined to the strike, fully funded | Investors who want to own SPCX |
| 3 | Covered call / wheel | Covered by shares; upside capped | Existing SPCX shareholders |
| 4 | Iron condor | Defined, but squeeze-exposed | Neutral traders, sized tiny |
1. The bull put spread is my default. Sell an out-of-the-money put, buy a lower one, collect the inflated credit, and your maximum loss is fixed to the penny. You only need SpaceX not to collapse. It is the safest single trade on the board. Full mechanics are in my bull put spread piece.
2. The cash-secured put is for the investor who actually wants the shares. Sell a put at a price you would love to pay, set aside the full cash, and get paid either way — rich income if it stays up, a discounted entry if it comes to you. Detail in the cash-secured put piece.
3. The covered call and the wheel are for shareholders. Once you own SPCX, the inflated call IV is income you are giving away. Sell calls above your price, lower your basis monthly, and chain it with the put to build the wheel. Detail in the covered call piece.
4. The iron condor sells both sides at once for double the premium — and on a small float, the upside short call invites a gamma squeeze. It is defined-risk but deceptively dangerous, so it goes last and goes tiny. The full warning is in the iron condor piece.
Notice what is not on this ladder: naked short puts, naked short calls, and buying premium. The first two have catastrophic undefined risk on a gapping IPO. The third fights the entire edge.
The rules that make selling volatility safe
The strategy is only as safe as the discipline around it. These are non-negotiable for me on a fresh listing.
Size for the worst case, not the premium. The fat credit is a trap that tempts you to sell ten contracts. I size so that every SPCX position at simultaneous maximum loss is a number I can shrug off. One or two spreads to start. This single rule prevents more blowups than every other rule combined.
Always define your risk. No naked short options on a one-week-old ticker. A stock with no history and a thin float can gap 30% overnight. Spreads, cash-secured puts, and covered calls all have a known floor. Naked options do not.
Respect the wide markets. These options are illiquid and the bid-ask is brutal. I never trade at the market. I route combos as single orders with limits near the mid and let them work. Crossing a wide spread on entry and exit can quietly eat more than my whole edge.
Take profit early. I close credit trades at 50% of max profit. The last few dollars of a short spread carry the worst risk-to-reward of the whole trade. Booking the win and redeploying beats squeezing the end.
Stay in front of the catalyst. SpaceX reports its first earnings as a public company in November. IV will stay bid until then — good for sellers in the calm weeks — but I keep my expirations in front of that binary. I do not want to be short premium through the first public print, when the move could be violent in either direction.
Plan the IV crush. Some of this enormous IV will deflate as SPCX builds a trading history, even without a catalyst. That volatility crush helps a premium seller — short options lose value as IV falls. It is another reason to be the seller, and a reason not to overstay: once IV normalizes, the extraordinary edge is gone and this becomes an ordinary chain.
What I am not doing
I am not buying calls hoping for a moonshot — I would be paying the most overpriced premium in the market for the privilege. I am not selling anything naked. I am not putting on size because the credit looks juicy. And I am not selling premium across the November report. The whole game on a fresh listing is to harvest the overpriced fear in the quiet weeks, with defined risk and small size, and to be humble about a stock that can squeeze.
Bottom line
A brand-new options chain on a name everyone wants is the richest premium-selling environment that exists — and the fastest way to get hurt if you treat it like a lottery. Sell the volatility, never buy it. Define every risk. Size so small that being wrong is boring. Climb the ladder from the safest trade up, and stay in front of the catalyst. Done that way, an inflated fresh listing is not a casino. It is a paycheck.
This is not advice and not a recommendation — it is the framework I, Ruslan Averin, use for a setup like this, recorded at averin.com.
— Ruslan Averin
More market analysis by Ruslan Averin at averin.com.
