SPCE: What Does the Options Market Think After a 40% Crash?

After today's collapse, Virgin Galactic ($SPCE) is trading around $4.56. As someone who likes to take a look at distribution, expectations, and what is priced in overall it is interesting to follow this as a case study. What's particularly interesting is that even after the crash, the 15-day ATM straddle is still worth roughly $1.74. This is after a massive IV crush. Nonetheless, IV is still almost 240% That's implying a move of about **±38%** over the next two weeks. Using the straddle-implied range: **68% probability range:** $2.36 to $6.76 **95% probability range:** $0.16 to $8.96 Now obviously this isn't how reality works. Stocks can't go negative, outcomes aren't normally distributed, and SPCE is probably one of the worst possible examples of a stock to model with a textbook bell curve. You've got dilution risk, retail flows, financing headlines, short squeezes, and all kinds of event risk that create very asymmetric outcomes. But I still think it's a useful thought experiment. * The stock just got cut almost in half. * IV has already collapsed from 300%+. And yet the options market is still effectively saying: "*A double from here over the next 15 days is not some crazy tail event.*" The distribution is extremely wide, the market is still pricing SPCE as a stock where almost anything can happen. https://preview.redd.it/p05l1y54a05h1.jpg?width=962&format=pjpg&auto=webp&s=a00376f614bf2ff13142b2e3b63f7cf3bf44eaa6 Uncertainty remains. I am thinking about selling some vol on this stock potentially, the exact setup on how is still something I need to think about, how are you guys playing this stock? Or do you prefer to stay away from highly volatile beasts like this one?