On August 15, a single trade series by Duang Yongping quietly entered the public ledger. The data: 1,000 put options sold at a strike of $115, expiring December 18, 2026, for a premium of $2.326 million. Then, on August 5, 100,000 shares of SpaceX (SPCX) purchased at $108.68. Current price: $140. Unrealized paper profit: $5.458 million.
This is not a victory. It is a snapshot of a structure that has not yet been tested by time. The premium is booked. The calls are still open. The stock position is exposed. The market is euphoric, but the code is incomplete. Liquidity is a mirage; solvency is the only truth.
Context: The Mechanics of the Trade
Let me freeze the frame. Duang Yongping, a well-known retail investor on the Xueqiu platform, executed two transactions over a 20-day window. First, on July 24, he sold 1,000 put options on SpaceX at a strike of $115, collecting $23.26 per option (total premium ~$2.326M). This is a classic 'selling puts to collect premium' strategy—a bet that the stock will not fall below $115 by expiration. Second, on August 5, he bought 100,000 shares outright at $108.68, spending roughly $10.868 million.
SpaceX went public in June, surged briefly above $200, then crashed to around $105 before rebounding to $140 in early August as the first batch of restricted shares unlocked and market risk appetite improved. As of the latest close, the stock position shows an unrealized gain of roughly $3.132 million, plus the already collected premium, yielding a total paper profit of $5.458 million.
Core: Systematic Teardown of the Structural Flaws
I do not trust the pitch; I audit the structure. Let me dissect this trade piece by piece, using the same methodology I applied to the 2017 ICO audits and the 2020 DeFi liquidity mining failures.
1. The Premium is a Liability, Not a Credit
The $2.326 million premium is not free money. It is a liability on the balance sheet. Selling a put obligates the seller to buy the stock at $115 if the price falls below that level. The premium is the compensation for taking on that risk. Until the option expires worthless, the seller is short volatility. In DeFi terms, this is equivalent to providing liquidity in a concentrated range—the upfront yield (fees) is real, but the impermanent loss (or in this case, assignment risk) is deferred. I have seen hundreds of protocols collapse because liquidity providers ignored the tail risk of a price crash. The same principle applies here. If SpaceX drops below $115 (say, due to a failed launch or regulatory change), Duang Yongping must buy 100,000 shares at $115, even if the market price is $90. That would turn the $2.3M premium into a $2.5M loss overnight. Emotion is a variable I exclude from the equation.
2. The Stock Purchase is a Leveraged Bet on Direction
The second leg—buying 100,000 shares at $108.68—effectively converts the put spread into a synthetic long position. The trader is now net long 100,000 shares, but with a risk floor at $115 (due to the put obligation). The breakeven on the combined position is messy: the stock purchase cost $10.868M, the premium collected is $2.326M, so the net cost basis is $84.54 per share (($10.868M - $2.326M) / 100,000). Why? Because if the stock stays above $115, the put expires worthless, and the trader owns the shares at a net cost of $84.54. That seems attractive, but only if the stock doesn't fall below $115. If it does, he must buy 100,000 more shares at $115 (the put assignment), which would double his position and push the average cost to $100.27 (($10.868M + $11.5M - $2.326M) / 200,000). The risk is not symmetrical. The upside is capped (the stock can go to infinity), but the downside is amplified by the put obligation. This is mathematically identical to a DeFi leveraged yield farming strategy where the arithmetic of impermanent loss is hidden until the market moves. I spent three months in 2020 simulating exactly these scenarios for Protocol A. The data never lies.
3. The Volatility Environment is Hostile
SpaceX stock has experienced a 50% drawdown from its peak to trough in less than two months. The stock is reacting to the unlocking of restricted shares—a supply shock that is still being absorbed. The price recovery from $105 to $140 is fragile. In crypto, we call this a 'dead cat bounce' until proven otherwise. The options market is likely pricing in high implied volatility, which makes the put premium attractive, but also means the probability of a large move is higher. Duang Yongping is selling volatility at a time when the underlying is historically volatile. This is the same trap that caught many DeFi LP providers in 2020: they saw high yields (premiums) and ignored the volatility skew. I have written about this before: the yield is the compensation for the risk, not the profit.
4. The Unrealized Gain is a Mirage
The $3.132 million unrealized gain on the stock is subject to a 50% drawdown risk. As of writing, the stock is at $140. If it falls back to $105, the gain evaporates entirely. The premium is locked in, but the stock position is underwater at $105 ($108.68 cost). The net loss would be $0.368M (stock loss of $0.368M) minus the $2.326M premium, leaving a net gain of $1.958M—still positive, but only if the stock doesn't go below $115. If it goes to $90, the stock loss is $1.868M, the put assignment adds further loss, and the total net becomes negative. The paper profit is a snapshot of a specific moment in time. In my 2017 audit of Ethereal Project, I refused to sign off on contracts that showed 'profits' that were contingent on market conditions. This is the same logic.
Contrarian: What the Bulls Got Right
Let me be fair. Duang Yongping is not a novice. He is a seasoned investor with a track record on Xueqiu. The trade has a clear thesis: SpaceX is a high-quality company with a strong brand, and the post-IPO volatility was overdone. The restricted share unlock was a known event, and the market absorbed it. The stock rebounded. The put premium provided a cushion that no simple long stock position would have. In fact, if the stock stays above $115 through December 2026, the trade will generate a 65% return on the net cost basis ($84.54 to $140) plus the premium already collected. That is a high-probability trade if—and this is a big if—the company's fundamentals remain intact. The bullish case is that Duang Yongping has effectively created a synthetic 'put write + long stock' position that mimics a covered call but with a lower cost basis. It is a sophisticated structure, and the timing of the stock purchase (near the bottom of the dip) was opportunistic.
But I have seen this pattern before. In 2021, I analyzed the PixelFlux NFT collection, where the rare trait distribution was algorithmically flawed. The surface narrative was pristine; the underlying code was broken. The same applies here: the surface narrative of 'paper profit' is pristine, but the underlying risk structure is broken. The bulls are correct that the trade has a high probability of success, but they ignore the tail risk. In crypto, tail risk is everything. The fall of Terra/Luna was a tail event. The fall of FTX was a tail event. The market is not rational. The trade is a bet on the absence of a black swan. That is not a strategy; it is a prayer.
Takeaway: The Accountability of the Structure
I do not know Duang Yongping. I do not know his risk tolerance or his portfolio size. But I know the structure. And the structure says: this trade is not a 'risk-free' premium collection. It is a leveraged bet on SpaceX's stability, with a asymmetric downside that is hidden by the paper profit. The options have not expired. The stock is volatile. The market is euphoric.
In my 25 years of observing markets, I have learned that the most dangerous trades are the ones that look profitable before they are closed. The crypto market is full of such trades—yield farming, leveraged staking, options writing. They all look like free money until the margin call hits. The only real hedge is to audit the structure, not the outcome.
Emotion is a variable I exclude from the equation. The equation here is simple: the trade is a net long position with a short volatility overlay. It is a high-probability, low-conviction bet. The probability of profit is high, but the magnitude of loss, if the tail hits, is catastrophic. That is not a trade I would take. But then again, I am not a trader. I am an auditor. And the audit says: the code is not clean.
Check the contract, not the influencer. The contract here is the options contract. The influencer is the paper profit. Which one do you trust?