SpaceX shares are on the mend after a 35% pullback from its post-IPO high and options traders are assembling bullish positions of all forms – from short-term and speculative to big investments for the haul.
Volume has subsided in SpaceX options, with around half-a-million contracts traded by midday Monday, on pace for about half the daily average since they started trading June 15, according to Cboe LiveVol data. Still, positioning is unmistakably bullish.
Traders bought more than four times as many calls than puts, according to ThinkOrSwim data, with total call volume double that of puts. Of the top 10 contracts by volume, seven were calls and nine expire on Thursday. Shares rallied 7% to the highest since last Tuesday following speculation that SpaceX could buy a mobile carrier, as well as
a deal between Rocket Lab and Iridium Communications that renewed excitement around satellite communications.
"From a technical standpoint SpaceX defended its all-time low around $147, which tells me there's buyer demand on the pullback," Charles Moon, a tech and momentum specialist for Prosper Trading Academy in Chicago, said by phone. Moon added that he bought SpaceX stock alongside 170-strike calls.
One notable trade in SpaceX summarized the situation well. When the stock was $155 Monday morning, someone sold about $450,000 of the 150-strike puts expiring in January 2027 then bought the same number of 160-strike calls, a trade that's already making money as the stock hits the highest since last Tuesday.
There was no shortage of gamblers, either.
The second-most popular contract by volume was the 300-strike call expiring Thursday, a 10-cent trade that needs SpaceX to almost double by the end of the holiday-shortened week.
"The 300-strike buyers are trying to force a gamma squeeze with those trades but market-makers know better at this point and that's unlikely to happen," said Moon, referring to the trading phenomenon popularized by Gamestop that can turn the books on market-makers if low-probability events go against them.
Traders looking for shocking moves may want to keep tabs on
Rocket Labs, which added 16% in the session. Options volume was 50% above the 30-day average and calls outpaced puts by a factor of four.
<small>Source: CNBC</small>
