Here's the thing about AST SpaceMobile Inc. (ASTS): it's been one of the year's strongest performers, but it can also give options traders whiplash. The satellite designer and manufacturer moves with the kind of volatility that makes you question your life choices, even when the underlying business is doing everything right.

So what's going on? The stock is what finance nerds call "non-ergodic to the extreme." In plain English, this means your actual return might look nothing like the expected average return. It's like planning a road trip based on average speed but not accounting for the fact that half the time you're stuck in traffic and the other half you're on the open highway.

This matters hugely for options traders because volatility spikes and expiration dates can turn a theoretically sound trade into a disaster. Even if ASTS is in a broader bull market, a correction at the wrong time can destroy your position. That's particularly painful when the company itself is hitting milestones and signing contracts like everything's going according to plan.

Why The Selling Pressure?

So why has ASTS been tumbling lately? Part of the answer is insider selling. December has been dominated by sellers in terms of both frequency and dollar volume. Now, before you panic, there's a reasonable explanation: major stakeholders likely sold shares for tax purposes as the year wound down. It's not necessarily a red flag about the business itself.

The typical argument you'll hear is that because AST SpaceMobile has strong fundamentals—hitting satellite launch milestones, securing important contracts—the stock must be undervalued. And sure, over a long enough timeline in a bull market, that reasoning can work out. But here's the problem: that's circular logic.

You're essentially saying "the stock will rise because the market hasn't priced in its growth potential," which sneaks the conclusion into the premise. It's what philosophers call petitio principii or begging the question. The premise does all the work, but nobody actually examines whether it's true.

How do we actually know ASTS is mispriced? That's the real question worth answering.

Measuring Mispricing Through Risk Geometry

I also think ASTS is currently mispriced, but you can't just declare that and expect people to believe you. You need to show your work.

First, we need to quantify what "mispricing" actually means so we can measure it and assign probabilities. Saying something is "undervalued" or a "strong opportunity" sounds nice, but those terms are unbounded and can't be quantified. Price itself is unbounded too—ASTS could theoretically go to infinity. That's why I break price action into bounded categories: "up weeks" and "down weeks."

Second, you need to think hierarchically. A single 10-week strand of price data tells you nothing about probability. But what if you took hundreds of rolling 10-week periods and stacked them into a fixed-time distribution? The most frequent, consistent behaviors create bulges in probability mass.

These bulges represent what I call risk geometry. They show the ascending bullish emotions of buyers, but more importantly, they reveal the transition point where buyers get tempted to become sellers. Calculate this structure correctly and you know where you can push and where you should back off.

Under normal circumstances, 10-week returns from the current price of roughly $72 would place peak probability density around $71.75, suggesting a negative bias. But here's where the mispricing comes in: over the trailing 10 weeks, ASTS has printed a 4-6-D sequence. Translation: only four up weeks, creating a downward slope.

From this setup, the forward 10-week range would likely land between $62 and $92, with peak probability density materializing between $76 and $81. That's effectively a structural arbitrage of approximately 8.71%.

How Probability Decay Defines The Trade

Given this analysis, one trade stands out: the 75/80 bull call spread expiring February 20, 2026. This requires a net debit of $210, which is also your maximum loss. If ASTS rises through the $80 strike at expiration, the maximum profit is $290—a payout of over 138%. Breakeven lands at $77.10, making the risk-reward quite attractive.

The main reason I like this spread is the peak probability density concept. Over the next 10 weeks, ASTS should most likely traverse the range between $76 and $81. It's not that prices beyond this range are impossible—they're just less likely because of probability decay acceleration.

Consider the numbers: between $80 and $85, probability density drops by 71.34%. Between $85 and $90, density plunges another 92.18%. Put simply, it doesn't make sense to buy exposure to outcomes beyond $85 if you're convinced the stock won't get there.

That's where the bull call spread shines. You buy the premiums associated with the probability curve that makes sense while selling the rest of the curve that's less likely to materialize. You're buying reality and selling fantasy.

The beauty of this approach is that it removes the circular reasoning and replaces it with quantifiable probabilities. You're not assuming ASTS will rise because it deserves to. You're identifying where the stock is likely to go based on its historical risk geometry, then structuring a trade that profits from that specific outcome.

Options trading on volatile stocks like AST SpaceMobile doesn't have to be a coin flip. When you understand the underlying probability distributions and risk geometry, you can structure trades that align with the most likely outcomes rather than the most optimistic ones. That's the difference between gambling and trading with an edge.