Don’t be the last one out on IRNT. Some, but not all of you are going to get badly burned on this play.
Not sure if this is going to be downvoted into oblivion but I can’t help saying what I think; I was scrolling through the 600+% IV options on IRNT today and wondered if everyone knew that on Monday when the lockup period ends, the stock is going to get drilled into the ground.
This is clearly being priced into the October option contracts right now; take a look at a $20/$19 put debit spread. This is an OTM spread that you would expect to cost less than 50 cents (it has a max payout of 1 dollar, so a price above 50 cents would mean that it is MORE LIKELY to hit a dollar than it is to hit 0 dollars. Well, the price of that spread is sitting at about 70 cents right now, meaning the market thinks that in a month, there is a roughly 70% chance that the price or IRNT is going to be BELOW $19-$20.
Of course that makes sense though, the current play that WSB is talking about has to do with a short/gamma squeeze that is only able to occur because of a share lockup. My question to you all is this then; at what point are you supposed to sell?
Well we know that you have to sell before Friday’s market close; and maybe you think you’re smarter than the rest of WSB so you’ll actually sell halfway through the day on Friday (in hopes that that would be the peak of the squeeze). Well, I think people are going to start selling even before Friday at noon to beat the masses out of the trade, but lets consider for a moment that Friday at noon is when retail investors exit the trade.
That would still leave at least a half of a trading day of panic selling, where retail investors are rushing to exit a trade that we all know is going to get pummeled by locked-up shares on Monday.
So call me fucking crazy, but I just opened 22.5 strike put contracts expiring this Friday, and if the share price gets driven down to 15 dollars by EOD that day, I’ll make myself a healthy 10x. Puts expiring in october are way too expensive, but I think the first leg down is going to take place this week. Once again, the evidence for that is that nobody is bullish on this fucking stock past monday, so the selling will take place AT LEAST before the end of friday.
Don’t get caught with your fucking pants down. I’m opening more OTM puts tomorrow if the price is above $25.
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September 15, 2021 at 12:55PM