IonQ's Options Are the Cheapest They've Been All Year. Here's the Trade That Takes Advantage.

IonQ's Options Are the Cheapest They've Been All Year. Here's the Trade That Takes Advantage.

• IONQ

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IonQ (IONQ) is a quantum computing company whose stock has been a favorite among speculative buyers and high-volatility traders, thanks to its high beta (3.30 over the last 60 months) and news-driven price action. It's not uncommon to see the stock swinging by double-digit percentages around news, earnings, partnership announcements, or sector sentiment shifts. 

But today, we have a rare event. 

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IonQ, the volatile quantum stock, is now sitting at 0% IV rank. That means options on IONQ are priced much cheaper than they have been historically, creating an opportunity to go long. 

But which option strategy should you use? 

Well, based on Barchart Technical Opinion and Trendseeker, the outlook is grim, making long puts a viable choice. Today, I'll break down the strategy and help you find a trade that matches the trend.

Long Put Explained

A long put is one of the simplest bearish options trades. It's a single-legged trade that makes money when the stock falls.

The trade mechanics are simple. You buy a put that gives you the right, but not the obligation, to sell 100 shares of the underlying asset at a certain price (strike price) on or before a specific date (expiration date). You pay a premium for the put, which is typically expressed on a per-share basis. 

The only money you stand to lose on a long put is the premium you paid at the start. For a volatile name like IONQ, that defined, limited risk profile is a big part of the appeal versus betting against the stock directly.

Why IV Rank Matters When Trading Options

But before I find long put trades on IONQ, I need to explain why that 0% IV rank matters so much to the trade thesis. 

Implied volatility (IV) is one of the main factors that move option premiums. IV is essentially the market's forecast of how big the stock's swings will be going forward, baked into the option's price.

Higher IV means higher option premiums, which typically benefits sellers. Low IV, meanwhile, favors buyers because options are cheaper. 

Now, you might notice that IonQ's implied volatility is actually 68%. That's not low by standard measures. 

That's where IV rank's value becomes clear. IV rank tells you where a stock's implied volatility sits compared with its own range over the past year. It's measured on a scale of 0% to 100%. 

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