SpaceX options debut prices 15% odds of 50% stock swing
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- SpaceX options priced in about a 15% chance of a 50% rise and roughly a 13% chance of a 50% decline over the next three months, according to Susquehanna strategist Chris Murphy.
- SpaceX stock recorded the fifth-highest call volume of the day on its options debut, and has risen about 50% from its Friday IPO price.
- SpaceX's market cap has surpassed Amazon and is approaching Microsoft's valuation after the post-IPO surge.
- Chris Murphy of Susquehanna described the largest trades as hedges against future supply risk, with upside calls chasing another sharp rally and downside puts reflecting concerns about lock-up supply, valuation risk, and fading post-listing enthusiasm.
- Peter Boockvar, CIO at One Point BFG Wealth Partners, told CNBC's "Squawk Box Asia" that investors are "trading the story" and "trading Elon Musk," and said it will take at least a couple of years for the company to grow into its enormous valuation.
Why it matters: At a market cap nearing Microsoft's, options price a 13% chance of a 50% decline over three months, with traders citing lock-up supply as the trigger. Boockvar says it takes at least two years for fundamentals to grow into the valuation — a timeline the options market's implied volatility is already discounting.
