Calls and puts are equally expensive! The options frenzy over SpaceX reflects deep divisions in the market.

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SpaceX options were officially listed for trading on Tuesday, June 17th, Eastern Time.

On the first day, SpaceX call options had a trading volume of 994,000 contracts, just shy of a million, ranking fifth in the U.S. for the day—on par with SPY, NVDA, QQQ, TSLA. It’s worth noting that weekly options had not yet launched and are expected to start trading Thursday, meaning the first day’s volume came solely from monthly contracts, making it even more significant.

Nomura cross-asset strategist Charlie McElligott described the market sentiment that day as "absolute panic buying," writing that investors frantically poured into SPCX upside call options. The price of call options was driven so high that some engaged in “skew trades”—selling expensive calls and buying puts, using the premium from the calls to buy downside insurance.

That day, after a third consecutive day of 15% intraday volatility, SpaceX shares ultimately closed up about 5%. This result itself reveals the core issue: the market's view on the stock is highly divided, direction unclear, but bets are placed on both sides.

What are institutions doing: quietly buying insurance

Retail investors chase gains, what are institutions doing? The answer: hedging.

Susquehanna’s recap showed that the largest trades on the first day were not one-sided bets, but “collar strategies”—simultaneously buying puts and selling calls, locking in a price range.

One first-day flow: investors bought 7,700 September $200 strike price put options, while selling September $220 call options, with net premium income of $10.20—this is a classic “collar”, selling calls to subsidize puts, with the position expiring in September. An earlier, larger trade: 27,000 September $205 put/$225 call collars, the investor bought puts and sold calls, netting about $1.70.

Both trades expire in September—coinciding with SpaceX’s first lock-up expiration on August 20th. 70 days after IPO, the first lock-up period ends and early investors and employees can start selling shares. These collar trades are likely insurance for that event.

Of course, some are still betting on gains: 1,500 July $300 call options bought, 6,500 July $325 call options bought, and 3,000 July $220 straddles sold—the latter betting volatility will converge within a certain range. Two totally opposite views, coexisting in the same market, on the same day.

Both ends are expensive, so you can’t trade

Susquehanna’s calculations gave an intuitive figure: current pricing of September options implies SpaceX has about a 15% chance of rising another 50% by September, and about a 13% chance of dropping 50%.

The probabilities of upsides and downsides are similar, but neither is low—which means implied volatility is extremely high, making both calls and puts expensive. If you buy calls, they’re expensive; buy puts, also expensive; sell options, too risky.

SpotGamma’s dealer positioning model shows that currently, dealers are overall long Gamma near the July expiry around $195, providing some short-term price support, but also making further squeezes upward harder. You can also see trader positions with clear "short calls + long puts" combos—market makers hold the opposite positions.

Leveraged ETFs: Breaking records on day two

Aside from options, the leveraged ETF data is equally astonishing.

According to Bloomberg ETF analyst Eric Balchunas, the 2x long SpaceX leveraged ETF reached $3 billion in total trading volume on its second day (Wednesday), tripling from $1 billion the day before. SPCH’s single-day trading volume hit $1.3 billion, reportedly setting a record for second-day ETF volumes, beating the previous record held by Bitcoin spot ETF IBIT, which was $500 million.

Currently, virtually all leveraged ETFs tracking SpaceX have crossed $100 million in assets under management.

The implication: large amounts of retail money are pouring in via leverage and with strong persistence. Multiple products track the same stock, with leveraged effects, meaning SPCX volatility could be further magnified.

Real issues beneath the hype

It’s notable that this frenzy is almost detached from fundamentals. On Tuesday, SpaceX’s market cap surpassed Amazon, but Bloomberg data shows its capital expenditure and revenue are still far behind Amazon.

This isn’t to say SpaceX’s story doesn’t hold up, but rather: the current price action is more driven by positioning, liquidity, and sentiment—rather than re-pricing for earnings forecasts.

By analogy, Tesla's 2020 rally was retrospectively attributed by many to "Gamma squeeze"—rising from $15 to $300, with positive feedback from the options market playing a key role. SpaceX’s current structure is somewhat similar, but the real test comes at the August unlock.

Current options pricing already factors in both scenarios—but neither side is cheap.

Risk Warning and DisclaimerThe market carries risk, investments need caution. This article does not constitute personal investment advice, nor does it take into account the specific investment objectives, financial situation, or needs of any individual user. Users should consider whether any opinions, views, or conclusions herein are suitable for their individual circumstances. Investments made accordingly are at your own risk. ```