SpaceX Options Debut Shows "Extreme Pricing": About 15% Implied Probability of 50% Upside, About 13% Probability of 50% Downside
BlockBeats reports that on June 17, SpaceX launched options market trading on its first trading day after its IPO, prompting concentrated discussion in the market about its high volatility and high valuation risks. According to Susquehanna strategist Chris Murphy's calculations, current options pricing implies about a 15% probability that the stock price will rise another 50% before September, and also implies about a 13% probability of a 50% decline.
Murphy noted that SpaceX options trading on the day showed significant activity in bullish options, making it one of the top five most actively traded contracts throughout the day. His analysis suggests that large trades mostly have a hedging structure: call options reflect bets on further significant upside, while put options are concentrated on hedging against risks such as supply unlocks, valuation pressure, and a cooling of sentiment after the IPO.
He emphasized that this structure results in a typical state of "tail risk pricing being relatively expensive"—whether buying the upside or downside tail, investors face high costs and asymmetric risks.
Market commentator Peter Boockvar said that the current trading is essentially about "trading narratives and sentiment," not fundamentals. He pointed out that at such high valuation levels, the company will need to deliver sustained growth in the coming years to justify current pricing.
SpaceX's stock price has risen about 50% since its IPO, with market cap once surpassing Amazon and approaching Microsoft levels, sparking ongoing debate about the sustainability of its valuation.
Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.
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