SpaceX options risk reversals signal bullish positioning after lockup test
SpaceX rose as its first lockup expired, while large options trades added bullish exposure with defined but substantial downside risk.
By Maya Okafor · Markets Writer
· 3 min read
SpaceX options risk reversals drew attention Thursday after shares rose while the company’s first insider lockup restriction expired. For investors watching a newly public stock, that mattered because the expiration gave some early holders their first opportunity to sell, an event CNBC said had been expected to create fresh pressure on the shares.
At 3:38 p.m. EDT, SpaceX was trading at $112.43, up $4.16, or 3.84%, according to CNBC. The move does not establish that the stock has reached a lasting low. It does show that the shares held up on a day when an increase in eligible sellers had been a concern.
What do SpaceX options risk reversals mean?
A risk reversal combines the sale of a put option with the purchase of a call option. The put sale brings in premium but leaves the trader exposed if the stock falls below the put’s strike price. The call offers upside participation above its strike. Put together, the structure expresses a bullish view, but it can carry substantial losses if shares decline sharply.
By midday Thursday, about $600 million of SpaceX options premium had traded, CNBC reported, citing SpotGamma data. Puts accounted for $316 million of that activity, and an estimated $166 million was tied to put selling. Total put volume alone is not a clean measure of investor sentiment because puts can be bought as protection or sold as a bullish position.
CNBC said the day’s two largest dollar-value transactions included put sales paired with call purchases. Soon after the market opened, an unidentified trader sold $12 million of puts struck at $90 and expiring in June 2027, while buying $4.3 million of $220 calls with the same expiration. That created a reported net credit of $7.7 million.
At expiration, the short $90 puts would create increasing downside exposure below $90, while the $220 calls would gain value only above $220. The position therefore indicates a view that the shares can stay above a lower threshold, while retaining exposure to a sharp rally.
A later trade used a longer time frame. CNBC reported that a trader sold $3.5 million of $75 puts expiring in January 2028 and bought an equal number of $185 calls expiring at the same time. The calls cost $5 million, making that structure a net debit rather than a credit.
Why did the lockup expiration matter for SpaceX shares?
Lockups restrict insiders and early investors from selling for a set period after an initial public offering. When they expire, more shares can become available for sale, which can weigh on a stock if eligible holders decide to cash out. CNBC had reported earlier in the week that SpaceX was more than 50% below its post-IPO intraday high as of the prior Friday, and that rolling lockup expirations could add supply.
CNBC also pointed to market indicators that suggested selling momentum had eased: shares had largely traded near $110 since July 23, the 14-day relative strength index had bottomed late in the prior month, and implied volatility had dropped to its lowest level since June 30. These indicators describe recent trading conditions, not a confirmed market bottom. The options trades are anonymous, so they do not reveal the traders’ identities, their broader holdings or the full purpose of the positions.
This story draws on original reporting from CNBC.
