It’s been a busy 3 months space x.
The company is reportedly considering a $40 billion debt deal to send four astronauts to the International Space Station in record time, expand the spectrum of its mobile network and acquire NVIDIA chips, and CEO Elon Musk has said he intends to give stock to every child in America next year.
Traders believe this could mean further gains for the stock after the company announced earnings after the bell on Tuesday.
Options market makers are pricing in about a 6% swing in SpaceX after the event, according to data from Cboe LiveVol. That’s less than half of the 13% the company erased after its first report in August, a decline that set the stock at its lowest since then, after rising 60% in the next two months before reversing and dropping 19% in the past two weeks.
Barchart data shows the stock has about the same number of open call contracts as puts, but daily trading volume has skewed toward calls over the past week.
Of the 1.1 million contracts traded on Monday, there were 665,000 calls, 20% more than the 30-day average, and more buys than sells, according to Cboe LiveVol. Traders also bought more calls than puts and sold more puts than they bought, according to the data, a clear bullish trend as the space giant heads toward its second earnings call.
The most popular call contract expiring Friday was the 170 strike, which would require a rebound of about 14%, according to SpotGamma data. There was also notable buying in the 190 strike call at the end of the month, a 40 cent contract that would need to rise 29% for SpaceX to break even.
SpaceX since the beginning of the year
For that to happen, SpaceX needs to get through two more stock lock-up periods. With the release scheduled for two days after the closing date and October 26th, the total number of shares to be sold will exceed 1.6 billion. The releases on September 9th, 10th, and 24th have not had a noticeable impact on the stock price, so it has not been a problem for the stock price so far.
As reflected in the implied movement, SpaceX’s implied volatility in this report is much lower compared to previous quarters. According to ThinkOrSwim, SpaceX’s IV on Monday was trading at 62, but before the second quarter earnings release, the IV was above 110.
