The stock options of aerospace giant SpaceX (SPCX) are showing how quickly the stock’s post-IPO excitement reversed, with many bullish traders now sitting on heavy losses. The stock initially surged after going public and reached a high of $225.64 within its first week of trading. However, that rally quickly faded, and SpaceX fell to $154.60 by Monday’s close. The call options suggest that many traders expected SpaceX’s early rally to keep going. Indeed, the $180 call had 16,856 contracts in open interest, the largest single call position in the June 26 chain, but it was already down 88.71%.
Other heavily traded calls included the $200, $175, and $195 strikes, which were likely opened when SpaceX was trading much higher. Some traders went even further, with large open interest in the $285 and $300 calls. Those aggressive bets now look nearly worthless as the stock’s valuation comes under more pressure. Meanwhile, put buyers were on the right side of the reversal.
The $162.50 put had 8,810 contracts in open interest and jumped 496% on Monday, while the $165 put rose 455%. Other active downside bets included the $145 and $150 puts, which indicated that some traders were betting the IPO rally had gone too far. Looking ahead, the at-the-money straddle implies a roughly 10.3% move by Friday, which shows that the options market still expects major volatility.
Is SPCX Stock a Good Buy?
Turning to Wall Street, analysts have a Moderate Buy consensus rating on SPCX stock based on three Buys, two Holds, and one Sell assigned in the past three months, as indicated by the graphic below. Furthermore, the average SPCX price target of $222.20 per share implies 40.2% upside potential.
