SpaceX believers are exploring new strategies in the options market, shifting from aggressive out-of-the-money call buying to selling puts, a move that sophisticated traders interpret as a sign the stock's decline may be nearing its end. This pivot, observed on Thursday, saw a significant portion of the day's $600 million in premium traded allocated to puts, indicating a bullish sentiment focused on stabilization rather than an immediate, massive rally.
SpaceX employees celebrate the market close of the SpaceX initial public offering (IPO) at the Nasdaq Marketsite on June 12, 2026, in New York City.
Spencer Platt | Getty Images
The options market activity on Thursday revealed a preference for directional trades structured as risk reversals, combining the sale of puts with the purchase of calls. Notably, a significant trade shortly after the market opened involved the net sale of $7.7 million, with $12 million in 90-strike puts expiring in June of next year sold against $4.3 million in 220-strike calls with the same expiration. This strategy suggests a belief that SpaceX will not fall another 20% in the next ten months and an added expectation that the stock could potentially double.
A similar, albeit smaller, risk reversal trade occurred later in the day. This involved selling $3.5 million worth of 75-strike puts expiring in January 2028 and buying an equal value of 185-strike calls with the same expiry. In this instance, the cost of the calls ($5 million) exceeded the premium received for the puts, indicating the trade was executed at a debit.
SpaceX shares in the past five trading days
Historically, continuous bullish call-buying in SpaceX options since its debut has acted as a contrarian indicator. However, the recent large, unequivocally bullish trades involving option selling—a tactic favored by institutional investors—suggest that seasoned traders are anticipating a potential bottom for the stock.
Technical analysis of SpaceX's stock chart also supports this view. After hitting a new low on Monday, the day before its earnings report, the stock has largely hovered around the $110 mark since July 23. Downward momentum appears to be waning, with the 14-day relative strength index finding its bottom last month and implied volatility decreasing to its lowest point since June 30.
Adding to the positive outlook is the fact that the stock is trading up on the day the first insider lock-up period expires. This event, which many had predicted would trigger further selling pressure, seems to have been absorbed by the market, further bolstering the argument for a potential price floor.
