SPAX Strangle Strategy
SPAX (T-Rex 2X Long SpaceX Daily Target ETF), in the Financial Services sector, (Asset Management - Leveraged industry), listed on AMEX.
The Fund seeks daily investment results, before fees and expenses, of 200% of the daily performance of SpaceX. The Fund does not seek to achieve its stated investment objective for a period of time different than a trading day.
SPAX (T-Rex 2X Long SpaceX Daily Target ETF) trades in the Financial Services sector, specifically Asset Management - Leveraged, with a market capitalization of approximately $19.6M, a beta of -0.65 versus the broader market, a 52-week range of 5.36-28.05, average daily share volume of 2.6M, a public-listing history dating back to 2021. These structural characteristics shape how SPAX stock options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.
A beta of -0.65 indicates SPAX has historically moved less than the broader market, dampening realized volatility and producing tighter expected-move bands per unit of dollar exposure.
What is a strangle on SPAX?
A long strangle buys an OTM call and an OTM put at offset strikes, cheaper than a straddle but requiring a larger underlying move to profit since both wings start out-of-the-money.
SPAX snapshot
As of August 14, 2026, spot at $9.09, ATM IV 130.60%, expected move 37.44%. The strangle on SPAX below is built from the August 14, 2026 end-of-day chain, with strikes snapped to listed contracts and premiums pulled from the bid/ask midpoint at a 35-day expiry.
Why this strangle structure on SPAX specifically: IV rank is unavailable in the current snapshot, so regime-based timing for SPAX is inferred from ATM IV at 130.60% alone, with a market-implied 1-standard-deviation move of approximately 37.44% (roughly $3.40 on the underlying). The 35-day window matched to the front-month expiry keeps theta exposure bounded while still capturing the post-snapshot move; longer-dated SPAX expiries trade a higher absolute premium for lower per-day decay. Position sizing on SPAX should anchor to the underlying notional of $9.09 per share and to the trader's directional view on SPAX stock.
SPAX strangle setup
The SPAX strangle below is built from the August 14, 2026 end-of-day chain, with each option leg priced at the bid/ask midpoint of its listed strike. With SPAX at $9.09 on that close, the first option leg uses a $10.00 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed SPAX chain at a 35-day expiry; the cross-strike IV skew is reflected directly in the per-leg values rather than approximated. Quantity sizing assumes one contract per option leg (or 100 SPAX shares for the stock leg in covered calls and collars).
| Action | Type | Strike / Basis | Premium (est) |
|---|---|---|---|
| Buy 1 | Call | $10.00 | $1.05 |
| Buy 1 | Put | $9.00 | $1.48 |
SPAX strangle risk and reward
- Net Premium / Debit
- -$252.50
- Max Profit (per contract)
- Unbounded
- Max Loss (per contract)
- -$252.50
- Breakeven(s)
- $6.48, $12.53
- Risk / Reward Ratio
- Unbounded
Upside max profit is unbounded; downside max profit is bounded at the put strike minus the combined debit (reached at zero). Max loss equals the combined debit times 100 (reached anywhere between the two OTM strikes). Two breakevens at call-strike plus debit and put-strike minus debit.
SPAX strangle payoff curve
Modeled P&L at expiration across a range of underlying prices for the strangle on SPAX. Each row is one sampled price point from the computed payoff curve; the full curve uses 200 price points internally before being summarized into 10 rows here.
| Underlying Price | % From Spot | P&L at Expiration |
|---|---|---|
| $0.01 | -99.9% | +$646.50 |
| $2.02 | -77.8% | +$445.63 |
| $4.03 | -55.7% | +$244.75 |
| $6.04 | -33.6% | +$43.88 |
| $8.04 | -11.5% | -$157.00 |
| $10.05 | +10.6% | -$247.13 |
| $12.06 | +32.7% | -$46.25 |
| $14.07 | +54.8% | +$154.62 |
| $16.08 | +76.9% | +$355.49 |
| $18.09 | +99.0% | +$556.37 |
When traders use strangle on SPAX
Strangles on SPAX are the cheaper cousin of the straddle - traders use them when they want a large directional move but are willing to give up the inner-strike sensitivity in exchange for a lower up-front debit on the SPAX chain.
SPAX thesis for this strangle
The market-implied 1-standard-deviation range for SPAX extends from approximately $5.69 on the downside to $12.49 on the upside. A SPAX long strangle is the OTM cousin of the straddle: lower up-front cost but the underlying has to travel further past either OTM strike before the position turns profitable at expiration. As a Financial Services name, SPAX options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to SPAX-specific events.
SPAX strangle positions are structurally neutral / high-volatility (long premium, OTM); the modeled P&L assumes European-style exercise at expiration and ignores early assignment, transaction costs, dividends paid before expiry on the stock leg (when present), and the bid-ask spread on the listed chain. SPAX positions also carry Financial Services sector concentration risk; news flow inside the sector (peer earnings, regulatory shifts, supply-chain headlines) can move SPAX alongside the broader basket even when SPAX-specific fundamentals are unchanged. Always rebuild the position from current SPAX chain quotes before placing a trade.
Frequently asked questions
- What is a strangle on SPAX?
- A strangle on SPAX is the strangle strategy applied to SPAX (stock). The strategy is structurally neutral / high-volatility (long premium, OTM): A long strangle buys an OTM call and an OTM put at offset strikes, cheaper than a straddle but requiring a larger underlying move to profit since both wings start out-of-the-money. With SPAX stock at $9.09 on the August 14, 2026 close, the strikes shown on this page are snapped to the nearest listed SPAX chain strike and the premiums come straight from that session's bid/ask midpoint.
- How are SPAX strangle max profit and max loss calculated?
- Upside max profit is unbounded; downside max profit is bounded at the put strike minus the combined debit (reached at zero). Max loss equals the combined debit times 100 (reached anywhere between the two OTM strikes). Two breakevens at call-strike plus debit and put-strike minus debit. For the SPAX strangle priced from the August 14, 2026 end-of-day chain at a 30-day expiry (ATM IV 130.60%), the computed maximum profit is unbounded per contract and the computed maximum loss is -$252.50 per contract. Live intraday quotes will differ as the chain moves through the trading session.
- What is the breakeven for a SPAX strangle?
- The breakeven for the SPAX strangle priced on this page is roughly $6.48 and $12.53 at expiration, derived from the August 14, 2026 end-of-day chain's premiums. Breakeven is the underlying price at which the strategy's P&L crosses zero ignoring transaction costs and assignment risk. The SPAX market-implied 1-standard-deviation expected move in the same options snapshot is approximately 37.44%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
- When should you consider a strangle on SPAX?
- Strangles on SPAX are the cheaper cousin of the straddle - traders use them when they want a large directional move but are willing to give up the inner-strike sensitivity in exchange for a lower up-front debit on the SPAX chain.
- How does current SPAX implied volatility affect this strangle?
- Current SPAX ATM IV is 130.60%; IV rank context is unavailable in the current snapshot.