Half a million SpaceX options traded by midday Monday. A little below average since inception. Retail traders saw this headline and immediately checked their Robinhood accounts to make sure they weren't missing the next yacht payment.
The piece promises to explain how Nasdaq-100 inclusion might affect options pricing. It will not. It will say implied volatility could go up or down. It will mention liquidity. Someone will use the word "sophisticated" to describe institutional money that loses billions every quarter.
SpaceX options have been trading since March. Three months of data. Wall Street analysts are now drawing trendlines on three-month charts like archaeologists who found half a pottery shard and declared they've solved human civilization.
The volume came in below average. Below average volume on a headline about index inclusion that every retail trader on Twitter spent the weekend screaming about. That's the whole story. The thing that was supposed to happen did not happen. Retail saw the news. Retail did not care. Retail is learning.
Just kidding. Retail never learns.
The Nasdaq-100 inclusion means SpaceX gets added to index funds. Index funds rebalance. Market makers adjust their hedges. Options pricing models pretend to account for this by spitting out a Greek letter salad that looks impressive in a Bloomberg terminal and means absolutely nothing by tomorrow morning.
Every options trader who read this headline now believes they have edge. They know something. They saw the article. They understand how inclusion works. They're going to sell some iron condors or buy some calendars or do whatever the f*ck TikTok told them generates "passive income."
The options will expire worthless. The article will still be online. The volume will still be below average. And some guy named Derek will still be explaining to his wife why their vacation fund bought SpaceX calls instead of plane tickets.
Photo by Sven Piper on Unsplash
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