SpaceX has lost more than $1.2 trillion in market value since hitting a high of $225.64 in June — almost exactly the entire market value of Musk’s other company, Tesla, which just fell to its lowest point in nearly a year. On Monday, SpaceX fell for the 13th time in the past 16 trading days, falling more than 1% to close at $113.50.
SpaceX's largest single options trade on Monday was generally neutral to bullish, although some options flow was evenly balanced between longs and shorts. Small speculators are still piling into "near-impossible" call options - options that would require the plunging stock to quickly reverse and double to make a profit.
Looking at volume, put options outnumbered calls on Monday - traders bought 106,000 calls compared to 77,000 puts, although most of the $442 million in premiums was tied to puts. The most heavily traded contract is the 330 strike price call option expiring on Friday, which is priced at just $0.10 and has about a one-third chance of success, according to ThinkOrSwim data.
CBOE LiveVol data shows that four of the five trades with the largest premiums were neutral or bullish. This included two huge put option spread selling transactions - one of which was a multi-million dollar in-the-money put option spread sale that required SpaceX to rebound to make a profit; the other trader sold 5,200 100 strike price put options that expired on October 16, and simultaneously bought 7,000 85 strike price put options with the same expiration date, raking in $1.8 million in premiums.
"As an investor, it's still early; as a trader, Wall Street is now punishing AI stocks for capital expenditures," said Charles Moon, an expert in technology and momentum strategies at the Prosper Trading Academy in Chicago.
One thing is for sure: SpaceX is giving traders one of the craziest roller coasters on the market. While earnings reports are typically a volatility-reducing event, that may not necessarily be the case following next week's earnings release.
SpaceX's first earnings report since its listing will pave the way for investors to unlock 20% of eligible lock-up shares - up to 911.5 million shares will be available for sale on the second full trading day after the earnings release (i.e. August 6).
"I don't think SpaceX's lock-in unlock will be as bad as everyone fears," Moon said. "But it won't be good for the stock price either."