$RTX Options Intelligence

🎯 SELL RTX 180/185 CALL CREDIT SPREAD EXPIRING 2026-01-16

I recommend a bear call credit spread because the term structure shows 30-day Clean IV around 21.8%, which is below the 25.3% baseline historical volatility, indicating options are slightly underpriced and favoring premium selling. Additionally, RTX’s implied volatility rank is 100%, signaling very high IV and a favorable environment to sell premium. The stock is currently trading at $171.59, near its 50-day moving average ($170.88), with neutral RSI (48.95), suggesting limited near-term upside momentum. The market sentiment is moderately bullish but with a strong call skew and max pain at $180, so selling calls just above this level aligns with expected resistance.

Sell RTX 2026-01-16 180 Call, Buy RTX 2026-01-16 185 Call
Stock Price: $171.59 | Entry: Sell 180 Call at ~$3.60 (estimate based on IV 20.7%), Buy 185 Call at ~$1.80 (estimate based on IV 18.2%)
Net Credit: Approximately $1.80 per share ($180 per spread)

📊 Trade Metrics

• Max Profit: $180 (net credit received) if RTX stays below $180 at expiration
• Max Risk: $320 (difference between strikes $5 minus credit $1.80, times 100 shares)
• Breakeven: $181.80 (180 + 1.80) at expiration
• Win Probability: Moderate to high, given max pain at $180 and neutral technicals
• Days to Expiration: 42 days (Jan 16, 2026) — well after next earnings on Jan 27, avoiding earnings volatility risk

📈 Term Structure & Volatility Analysis

• Baseline 90-day Vol: 25.3%
• 30-day Clean IV: ~21.8% (undervalued vs baseline, favoring selling premium)
• Market IV Rank: 100% (very high, premium selling favored)
• IV Skew: Calls ~1.7% higher, supporting call credit spread viability
• Earnings Multiplier: 2.96x (high expected earnings volatility, but trade expiration before earnings reduces risk)
• Calendar Opportunity: Moderate, but focus on credit spread for defined risk

📈 Greeks & Volatility

• Delta (short 180 Call): ~0.27 (moderate probability of expiring OTM)
• Theta: Positive for seller, benefiting from time decay
• Vega: Negative, benefits if IV contracts after entry

🎯 Why This Trade

The term structure shows RTX options are underpriced relative to historical volatility, but the IV rank is at the peak, indicating a strong premium selling environment. The stock’s current price near $171.59 is below the max pain strike of $180, which is a magnet for option expiration. The recent defense contract wins and AWS collaboration support steady fundamentals, but technical indicators like RSI near 49 and price just below the 20-day MA ($173.53) suggest limited short-term upside. Selling the 180/185 call spread captures premium with defined risk, capitalizing on the expected price range and elevated IV.

📊 Pro Analysis

• Current IV: 44.2% (high) vs Historical 10.4% (significantly elevated)
• Put/Call Volume Ratio: 0.18 (very bullish, heavy call buying) but skew favors selling higher calls
• Market Maker Max Pain: $180 (aligns with short call strike)
• Technical: RSI neutral, price just below 20-day MA, support at 170.88 (50-day MA)
• Fundamental: Strong Q3 earnings beat, raised guidance, solid defense contracts
• Dividend Yield: 1.56%, not a major factor for this strategy

🔍 Earnings Date Check

Earnings on 2026-01-27, recommended expiration 2026-01-16 is BEFORE earnings, so this trade avoids earnings volatility risk and is focused on premium decay and range-bound movement.

💡 Trade Management

• Entry: Place limit order to sell 180 Call at $3.60 and buy 185 Call at $1.80 for a net credit of $1.80
• Target: Close position at 50-70% of max profit (around $90 to $126)
• Stop Loss: Close if RTX breaks above $185 or if the spread approaches max loss
• Time Stop: Close 3-5 days before expiration to avoid gamma risk

🔒 Pricing Validation

• 180 Call intrinsic value: $171.59 - $180 = $0 (OTM)
• 185 Call intrinsic value: $0 (OTM)
• Spread intrinsic value: $0
• Credit spread pricing respects intrinsic values and put-call parity

🔍 Market Overview

The current market regime is moderately bullish for RTX with solid fundamental catalysts including recent $1.6B F135 engine sustainment contract and AWS partnership enhancing defense tech infrastructure. The stock trades above its 200-day MA ($148.87), confirming a long-term uptrend, but short-term technicals show resistance near $173.53 (20-day MA). The Fed’s upcoming rate decision and CPI data within 5 days inject broader market uncertainty, favoring defined-risk premium selling strategies. Sector peers like LMT and BA show mixed signals, but RTX’s strong earnings and guidance provide relative strength.

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Confidence Level: Moderate to High — The trade aligns with the elevated IV environment, technical resistance, and max pain strike, offering a good risk/reward ratio with defined risk and no earnings exposure.

Risk Assessment: Limited risk of $320 per spread, with max loss if RTX rallies above $185 by expiration. The trade benefits from time decay and potential IV contraction. However, unexpected strong bullish catalysts could push the stock above 185, so risk management is essential.