The price action for $ASTS is a classic IV trap. After gapping up at the open and surging to $98.50, I noticed that the IV for out-of-the-money calls had reached an unsustainable level of over 160%.
Although my $105 call expires this Friday (3/27), the risk of an afternoon pullback or a sharp drop in IV was too high. I decisively sold and executed the trade, capturing the very peak of the early morning rally.
I realized a profit of +$10,200 in less than an hour.
Strategy: I wasn’t trading the stock price itself, but rather the IV expansion during the momentum surge. As seen on the 5-minute chart, the stock price began to fall and the premium started to retreat after I exited the position.
For those of you still holding calls with strike prices of 100 or higher, are you currently hedging with a credit spread, or are you betting on another gamma squeeze tomorrow?
I closed my $ASTS 105C position today at $98.5; it didn’t break through 100.
byu/One_Rub7972 inoptions
Posted by One_Rub7972
1 Comment
AI slop meets “dear diary”.
If you waited until the underlying price hit $98 to buy back a call you already had open, you ***lost*** money and realized much less profit than you would have on Tuesday.