Hans put on a trade that was supposed to lose.
He sold a short straddle on SpaceX, which is a fancy way of saying he bet the stock would sit still. A straddle like that only wins if the stock goes nowhere, and it bleeds the second the stock makes a real move. That is the whole deal. He was betting on calm.
Then SpaceX dropped 10% on him. A $20 move, straight against the position. By every options textbook ever written, that trade should be deep in the red right now.
It is not. Hans is up on it, and he has not even closed it yet. As he told me, one of his SpaceX trades is "doing something that's not supposed to happen."
So how does a trader make money on a 10% move that was built to wreck him?
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When Hans sent me this one, I just shook my head and laughed, because it is the perfect example of the thing I have been trying to beat into people's heads for years.
Let me set it up.
Hans sold the 220 straddle in July for $69, meaning he collected $69 in premium for selling both the call and the put. Then the stock fell twenty bucks.
On paper, a move like that is exactly what is supposed to bury a short straddle. So why is he sitting on a $12 gain instead of a loss?
Because two different forces were yanking on this trade at the same time, and most people only know about one of them.
The first force is the stock moving. That is the gamma, the part that hurts a short straddle when the underlying runs away from your strike. That force was working against Hans, no question.
But there was a second force pulling the other way, and it pulled a lot harder. As that stock fell, the fear baked into those options came hissing out like air out of a punctured tire. That collapsing fear is the vega, Hans's gain as volatility drops.
He scalped about 25 volatility points as the market makers crushed all that July premium and filled the retail crowd at the nosebleed prices. The vega win absolutely swamped the gamma loss.
Read that again, because here is the whole ballgame. Hans was wrong on direction and made money anyway.
He says it better than I can, so I will just quote him. "Option prices don't come from where the stock goes. They come from what people will pay for fear." When that fear collapses, the premium collapses right along with it, no matter which way the stock happens to drift.
Now think about who was on the other side of Hans.
It was the retail crowd, the folks who showed up to the SpaceX party and bought those gorgeous, expensive options at the top, right before the market makers pulled the rug.
They paid full price because of FOMO. Hans sold it to them. And this is the part that should make you sit up: he was not guessing.
He spent 15 years on a trading floor and a decade running income ETFs with close to a billion dollars under him, and he built his entire game around being on the right side of exactly this setup.
That is not luck. That is reading the one thing the crowd never bothers to look at.
So here is the lesson, and it is the cheapest tuition you will ever get. If you do not understand how option pricing actually works, you will keep buying premium right before it gets vaporized, and you will keep wondering why you were right on the stock and still lost money.
Hans runs these trades live with his members every week inside Turbo Income, building each one in front of them as he goes.
If you would rather sell the fear than be the one paying for it, that is where he does it.
Go see how Hans trades it here.
Your only option,
Mark Sebastian