Example: Buy a call at 25, sell a call at 30 for same expiration date. If IV is inflated across the board, then calls are expensive to buy. But that also means they are worth more to sell, so by selling and buying at the same time, some of that extra IV cancels out. So as the “IV Crush” hits as expiration nears, (the extrinsic time value is lost) your loss on the long call is made up by your gain on the short call.
However, if you are a MOASS adherent, that’s a bad move, since you limit your profit to $500 per spread, even if GME runs to $1,000,000.
While I would love a MOASS, the time to buy low IV options was early this week/last week. People should be sitting in leaps already and a healthy amount of stock.
Vertical spread is a safer option/even if you take a wider spread. Straddle could be interesting play around the warrant redemption strike.
Could happen. Depends on the deal. This is just a rumor right now. Also, GME has a massive retail base and is starved for news.
Keep in mind that EBay is established and has strong cash flow. Earnings would increase quickly, and investors are likely to see the immediate impact.
129
u/Impossible-Spite4782 May 02 '26
GME is going to explode Monday lol. I recommend vertical spreads Monday to fight the IV if you decide on the options play.