SpaceX’s Grand IPO Entrance Dents ‘Proxy’ Stocks: Traders Hunt for Opportunities in the Aftermath

There's nothing quite like the genuine article, and Wall Street is certainly feeling that truth following SpaceX's highly anticipated initial public offering (IPO). The arrival of the space giant on public markets has triggered a significant unwinding of gains in several "proxy stocks" — companies whose fortunes were previously tied to the buzz and potential of SpaceX.

These proxy stocks, which saw their options volumes surge in the days leading up to SpaceX's historic debut on Friday, are now adjusting. EchoStar, the Colorado-based networking firm that reportedly holds a 3% stake in SpaceX, experienced a sharp 14% reversal and drop. Similarly, AST SpaceMobile, which is slated to launch satellites on a SpaceX rocket next week, saw its shares plummet nearly 13%. Perhaps the most dramatic shift was seen in Virgin Galactic Holdings, which completely erased Thursday's substantial gains with a steep 34% loss.

Despite the share price dips, options traders appear undeterred. Call options continued to outnumber puts across all three names, with AST SpaceMobile being particularly popular, recording over 250,000 contracts traded, representing more than $60 million in premium. On Friday morning, calls were purchased at more than twice the rate of puts.

"There's a ton of short-dated call buying in these names as a way to get long SpaceX," explained Danny Kirsch, head of options trading at Piper Sandler. He added, "I have no doubt part of it is retail demand but there is definitely institutional demand for SATS." EchoStar (SATS) shares initially showed resilience, rising another 5% in early trading Friday, with AST SpaceMobile also trading higher concurrently.

Cory Johnson, chief market strategist at San Francisco-based Epistrophy Capital Research, highlighted another factor contributing to the elevated prices of these proxy plays: the demand for space-focused exchange-traded funds (ETFs). "People who can't buy SpaceX or didn't think they could get enough quick enough, have been plowing money into these ETFs and so these funds are having to buy shares of AST, EchoStar, Spire, etc.," Johnson stated. He emphasized that this demand "has nothing to do with the quality of these companies, demand for their products, or their cash flows."

Two such ETFs, the Procure Space ETF (UFO) and the Defiance Drone and Modern Warfare ETF (JEDI), both hold shares of ASTS. UFO has surged 38% in 2026, while JEDI is up approximately 33%.

Looking ahead, demand for SpaceX options, set to begin trading on Tuesday, is expected to be colossal. With the IPO pricing at $135 a share, it hits a sweet spot for retail traders attracted to stocks with seemingly lower nominal prices, even if premiums are high. The implied volatilities for EchoStar and AST, which closed at $128.13 and $97.56 respectively on Thursday, stood at 91 and 126.

"SpaceX has the potential to become one of the most actively traded options names among retail investors," commented Anthony Denier, group president and U.S. CEO of Webull. He noted that "The combination of a likely high share price, significant volatility and immense public interest creates an ideal environment for options trading." Denier also suggested that if borrowable shares become scarce or expensive, put options could offer a more practical bearish alternative than shorting the stock directly. This echoes the trading patterns seen in Tesla, another Elon Musk-led company and a favorite among retail options traders.