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Today's editorial pick for you
Calculate the Risk Geometry of IONQ Stock Before Rolling the Dice
Posted On Dec 25, 2025 by Joshua Enomoto
With the broader technology space taking a beating recently, it's no surprise that IonQ (NYSE: IONQ) has also suffered badly. While quantum computing names represented the toast of Wall Street earlier this year, it's also fair to point out that timing plays a critical role when it comes to trading IONQ stock and its ilk. For example, on a year-to-date basis, IONQ is up only 23%.
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To bring in some context, the Nasdaq Composite index has gained 22% during the same period. In other words, while IonQ obviously offers acute upside potential, for those who are seeking consistent performance, a more stable collection of established tech players may be a more prudent opportunity. Moreover, the wildness of IONQ stock underscores the importance of operating under a rigorous, empirical methodology.
Sure, it's reasonable to point out that when quantum computing stocks move, they tend to move hard. But that also applies on the downside as much as it does to the upside. For instance, during the Tuesday session, IONQ stock declined by roughly 5%. It can easily make up that loss, but the point is that a haphazard approach can be costly on paper.
Fortunately, by narrowing down the uncertainty inherent in IONQ stock, we can focus more on likely outcomes and thereby make smarter trading decisions.
Advanced Options Trading Comes Down to Variable Elimination
At the end of the day, options trading comes down to the elimination of variables. Clearly, because the equities market represents one of the most complex environments ever concocted, the derivatives subsector will be even more volatile and unpredictable. However, through the process of elimination, we can improve the odds of success.
Back when I was a high school student, my parents signed me up for The Princeton Review, which is a test preparation course. Frankly, I was never really a good test taker, and therefore, I hated dealing with the SAT. However, in order to get into a good school, you need strong standardized test scores — merely doing well in high school isn't enough.
One of the strategies that these course teachers harp on is that for most students, you're never going to feel comfortable answering all the questions. Certain ones are going to be taxing. When you encounter such problems, one approach to consider is variable elimination.
Typically, an SAT question may feature four bubbles, and you're supposed to fill in the bubble associated with the correct answer. Rather than trying to guess, we were taught to eliminate the two that were likely not the correct answer. Through this process, you're not dealing with a 25% chance of guessing correctly — you would narrow it down to 50%.
It's a similar process to the options market. Right now, based on implied volatility (IV) — which itself stems from actual order flows — expected move calculators for the Feb. 20, 2026, options chain show an expected range between approximately $40 and $63. That's a high-low spread of over 22% relative to the current spot price.
To be fair, this projected range is useful in that it's built from IV, which is a real residual metric. However, the underlying Black-Scholes formula treats market returns as falling under a lognormal distribution, which is an absurd claim.
Effectively, under this framework, the chance that IONQ stock falls to $40 is meaningfully no different than the chance it would rise to $63 — largely because the concept of probability is artificially collapsed in a lognormal parametric formulation.
To start eliminating variables, we need a new framework.
Trading IONQ Stock Based on Risk Geometry
Although the concept of variable elimination sounds intriguing, an object must first exist in some identifiable fashion in order for it to be eliminated. That's going to be problematic for IONQ stock — specifically its price action — because price itself represents a continuous signal.
Theoretically, IONQ (like any other security) can go to infinity, and an unbounded concept like infinity cannot be eliminated.
As such, the first order of business is to convert the continuous signal of price into a defined, discrete signal. This way, we can identify and classify different sentiment regimes. Next, we need to take this discretized data and assess it under a hierarchical framework.
Let's assume that we took a single strand of 10-week data of IONQ stock. Obviously, the return during this period won't tell us anything about the probability of performance for the other weeks in the dataset. But what if we were to stack hundreds of rolling 10-week trials in a fixed-time distribution? Under this methodology, the most consistent, frequent pricing behaviors would create bulges in probability mass.
These bulges represent risk geometry, which in part showcases the ascendancy of bullish behavior among IONQ buyers. More importantly, it also reveals the transition point where buyers are tempted to become sellers. By identifying risk geometry, we know where to push — and where to back off.
Using this hierarchical approach, the forward 10-week returns of IONQ stock would likely range between $48 and $53 (assuming an anchor price of $51.39, Tuesday's close). However, we're interested in isolating for the response to the current quantitative signal, which is the 3-7-D sequence. In the trailing 10 weeks, IONQ only printed three up weeks, leading to an overall downward slope.
While such pessimism would seem to have ill effect on the security, in observed reality, IONQ's forward 10-week distribution may range between $43 and $66. Moreover, probability mass would likely be most robust between $50 and $55.
There's some risk involved here — but there's also opportunity.
One Trade Stands Out
For those who are seeking the most risk-reward-balanced trade, the 50/55 bull call spread expiring Feb. 20, 2026, makes plenty of sense. This transaction requires IONQ stock to rise through the second-leg strike ($55) at expiration to be fully profitable. Doing so would lead to a payout of nearly 113%.
The reason why I'm focused on this trade and not the others comes down to probability decay. Between $50 and $55, the change in strikes only leads to a decline in probability density of 14.44% on a relative basis. That's a small penalty in decay. However, the decline between $55 and $60 comes out to a whopping 69.27%.
In other words, by capping the debit-side exposure to $60 with a credit sale, we're limiting our upside to a ceiling of $60. However, we're "happy" with this tradeoff to get a discounted long play because the scope of probability decay becomes exponentially large after $55.
This is the smart way to trade options that practically no one utilizes. And it all comes down to risk geometry — if you're not calculating it, you're playing a dangerously obtuse game.
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