$RIVN Options Intelligence

🎯 SELL RIVN JAN 16 20/17.5 PUT CREDIT SPREAD

I recommend a put credit spread because the term structure shows January 16, 2026 options have a clean IV (~68%) slightly above the 65.9% baseline historical volatility, indicating moderately elevated but fair premium to collect. The stock price at $18.08 is above the 50-day and 200-day moving averages, with bullish technicals (RSI near 70, MACD bullish) and strong recent fundamentals including a 78% revenue increase and first quarterly gross profit, which supports a moderately bullish stance. The put-call volume ratio (0.26) and high call volume indicate strong bullish sentiment. Selling premium at strikes just below the current price captures this bullish bias while limiting downside risk.

Sell RIVN Jan 16 17.5 Put, Buy RIVN Jan 16 20 Put
Stock Price: $18.08 | Entry Credit: Approximately $1.10 (Bid/Ask midpoint: Sell 17.5 Put ~ $1.50 bid, Buy 20 Put ~ $0.40 ask)

📊 Trade Metrics

• Max Credit Received: ~$110 per spread
• Max Risk: $250 (Difference between strikes $2.50 - credit received $1.10)
• Breakeven at Expiry: $16.40 (17.5 strike - $1.10 credit)
• Probability of Profit: High, as stock is currently above 18 and supported technically
• Days to Expiration: 42 days

📈 Term Structure & Volatility Analysis

• Baseline 90-day Volatility: 65.9%
• Jan 16 Clean IV: ~68% (slightly elevated, fair premium for selling)
• IV Rank: 100% (high overall, favors selling premium strategies)
• Earnings Date: Feb 19, 2026 (trade expires well before earnings, so limited event risk)
• Put/Call Volume Ratio: 0.26 (very bullish sentiment)
• Expected Daily Move: ±$0.97 (5.35%) supports strike selection below current price

📈 Greeks & Volatility

• Delta (17.5 Put): ~ -0.39 (moderate downside risk)
• Theta: Positive for seller (time decay benefits)
• Vega: Negative for seller (benefits if IV contracts)

🎯 Why This Trade

The term structure shows options slightly rich but fairly priced for January 16, allowing premium collection. The stock’s recent 2.5% rally after a strong Q3 earnings report with 78% revenue growth and first gross profit signals improving fundamentals. Technical indicators like RSI near 70 and price above 20-day and 50-day MAs support a bullish bias. The put-call volume ratio of 0.26 and unusual call buying volume confirm market optimism. Selling the 17.5/20 put spread captures this bullishness with defined risk, as downside below 16.40 breakeven is needed to lose money. This spread benefits from time decay and potential IV contraction after the recent earnings-driven volatility spike.

📊 Pro Analysis

• Current IV: 84.9% (high, but January options cleaner IV ~68%)
• IV Rank: 100% (high, favors selling premium)
• Market Maker Max Pain: $20 (near current price, supports strike choice)
• Technical: RSI 69.9 (neutral to slightly overbought), MACD bullish, price 11% above 20-day MA
• Fundamental: Q3 revenue +78%, first gross profit, net loss narrowing
• Sector Peers: TSLA, LCID, GM showing mixed performance but EV sector improving

🔍 Earnings Date Check

Earnings on Feb 19, 2026; recommended Jan 16 expiration is well before earnings, so this trade is not an earnings play but rather a premium collection on current bullish momentum.

💡 Trade Management

• Entry: Place limit order to sell spread at $1.10 credit (midpoint between bid $1.50 and ask $0.70)
• Target: Close spread at 50% of max credit ($0.55) for profit
• Stop: Buy back spread if stock closes below $16.50 to limit loss
• Time Stop: Close 3-5 days before expiration if not profitable

🔒 Pricing Validation

• 17.5 Put intrinsic value: max(0, 17.5 - 18.08) = 0 (OTM)
• 20 Put intrinsic value: max(0, 20 - 18.08) = 1.92
• Spread intrinsic value = 1.92 - 0 = 1.92
• Credit received (~1.10) is less than intrinsic, valid for a credit spread
• Put-call parity and bid/ask spreads respected

🔍 Market Overview

The market regime is moderately bullish on RIVN after a strong Q3 earnings report showing operational progress and revenue growth. The stock trades above key moving averages with bullish momentum indicators. The EV sector is seeing renewed investor interest, with Rivian’s price target raised by Tigress Financial to $25. High implied volatility and heavy call buying reflect optimism. The Fed’s recent policy stance and upcoming economic data (Fed rate decision and CPI on Dec 10) may impact overall market volatility but are not immediate catalysts for RIVN. This trade aligns with current momentum and technical support while limiting downside risk.

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Confidence Level: Moderate-High. The trade aligns with bullish sentiment, strong fundamentals, and favorable technicals, while using defined risk to manage potential downside. The spread’s breakeven is below current price, providing a cushion against moderate pullbacks.

Risk Assessment: Max loss limited to $250 per spread. Risk arises if RIVN falls below $16.40 by Jan 16 expiration. Time decay and potential IV contraction support profit if price holds or rises. Not an earnings play, so less event risk.