So, let me get this straight.
Wall Street just rolled out a fresh batch of options contracts for Rivian, and the financial news world is dutifully reporting on them as "of particular interest." You know what's "of particular interest" to me? The fact that they’re selling lottery tickets and calling it an investment strategy.
Let's break down this new casino game. According to the numbers published by Nasdaq, you can buy a put option that bets Rivian will fall below $10 a share by mid-November. The house—I mean, the market—gives you a 90% chance of losing every penny you put down on that bet. A 90% chance of failure. And this is being framed as an "attractive alternative" for investors.
An attractive alternative to what, exactly? Lighting your cash on fire in the backyard? At least that provides a little warmth.
Then there's the other side of the coin: a call option betting the stock will soar past $16. This one "only" has a 67% chance of expiring worthless. What a bargain. The analysis suggests this could be part of a strategy to "boost" your returns. This is the same logic that tells you buying a second lottery ticket is a great way to "boost" your chances of winning the Powerball. Sure, its technically true, but you're still almost certainly going to lose.
The real grift is buried in a number most people skip over: implied volatility. For these new options, it's hovering around 80%. But Rivian's actual volatility over the last year is only 61%.
This is like a bookie setting the odds for a coin flip. A coin flip is always 50/50. But the bookie is pricing the bets as if there's an 80% chance the coin will just float in mid-air, defying gravity. They're artificially inflating the "risk" premium to make the options more expensive, squeezing more juice out of every trade. They’re selling you a fantasy, and charging you for the built-in panic.
This entire setup is just predatory. No, 'predatory' doesn't cover it—this is a five-alarm dumpster fire of financial engineering designed to separate hopeful people from their money. It's the same nonsense we saw with crypto "yield farming" and meme stock pumps. Different ticker symbol, same old game.
And you know what really gets me? The sheer gall of it. They tell you to "study the fundamentals" while simultaneously offering you a gambling instrument that has almost nothing to do with them. What are the fundamentals of a company when you're making a 45-day bet based on algorithm-fueled panic? Does anyone really believe Rivian’s entire corporate value is going to crater by 25% in the next six weeks?
Then again, maybe I'm the crazy one here. Maybe this time it's different.
But it ain't.
And you just know there are thousands of people on Reddit forums right now convincing themselves that their 14-cent bet is the one that will hit. That they're the genius who saw what no one else did, and honestly...
It’s a Sucker’s Bet
Let's be real. This isn't about investing in the future of electric vehicles. It’s about creating a high-turnover, high-fee environment where brokers and market makers skim a little off the top of every desperate trade. The house always wins, and these options are just the newest slot machines they've rolled onto the casino floor. Don't be the one pulling the lever.