Options Trading: Riding Rocket Lab With Big Year Ahead
This budding company is finally getting the recognition it deserves.
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2025 could be labeled a year of speculation.
Many stocks nobody ever heard of suddenly came on the scene and made a big splash. There were several of these "no name" companies that had unforgettable years, rising 100% or more and attracting the big money players. Why not? Money is flowing to stocks that are rising and what better way to play it than hot momentum names?
Count Rocket Lab (RKLB) as one of those names, the stock is up a whopping 170% in 2025, that comes after a 475% gain in 2024! Simply incredible, but as you can see from the chart, the dips were great buying opportunities.
This past week, in some positive news for the company, Rocket Lab received a substantial contract from the U.S. government.
If you manage your risk carefully, then making a play on a small stock with a chance is a good reward/risk. Rocket Lab rewarded those willing to take a chance, but can the stock make another big run in the year ahead? We think so, but would prefer to use an options play, which will give us some nice leverage.
So, what would give us a good chance here?
The March 75 call at $10 is priced nicely, the delta is moderate but there is room and time to let the stock run to a target of $100, and likely higher than that. We choose something closer to the money so the decay is not an immediate factor. Volatility is high for a name like this, so we have to be a bit more conservative.
