I basically agree with this analysis. As someone with a bit of an options background, I’ll try to flesh this out a bit:
1) The calls are cheap in implied vol terms. Depending on what you buy, you’ll probably pay around a 13-15 implied vol. (Note that some brokerages will tell you it’s even cheaper, but they are probably forgetting dividends).
2) The spreads in the calls are extremely wide. If you pursue this strategy, do not pay the offer. You should try to get filled somewhere around mid market (although you will have to aggress a little).
3) The calls have the potential to make large returns if the market merely reprices implied volatility. For instance, the 10k Dec 2029 call—trading around 170 right now with an IV of 14.9 - would be worth $370 if long dated upside vol went to 20 and $600 if it went to 25.
Yeah, you will get much better fills if you walk your options limit orders (manually or automatically, see here for an example of an automatic implementation: https://www.schwab.com/content/how-to-place-walk-limit-order). Market makers will often fill your nearly-mid-market limit orders within seconds.
I basically agree with this analysis. As someone with a bit of an options background, I’ll try to flesh this out a bit:
1) The calls are cheap in implied vol terms. Depending on what you buy, you’ll probably pay around a 13-15 implied vol. (Note that some brokerages will tell you it’s even cheaper, but they are probably forgetting dividends).
2) The spreads in the calls are extremely wide. If you pursue this strategy, do not pay the offer. You should try to get filled somewhere around mid market (although you will have to aggress a little).
3) The calls have the potential to make large returns if the market merely reprices implied volatility. For instance, the 10k Dec 2029 call—trading around 170 right now with an IV of 14.9 - would be worth $370 if long dated upside vol went to 20 and $600 if it went to 25.
Yeah, you will get much better fills if you walk your options limit orders (manually or automatically, see here for an example of an automatic implementation: https://www.schwab.com/content/how-to-place-walk-limit-order). Market makers will often fill your nearly-mid-market limit orders within seconds.
One year later, do you still agree with this analysis?