The lifting of the 100 billion dollar ban will not crush Musk's followers! SpaceX (SPCX.US) stock price crosses supply tests, smart money, and options operations suggest “bottoming out”
The Zhitong Finance App learned that bullish followers of SpaceX (SPCX.US), an American supertech giant founded by Musk and focused on “AI+ space exploration,” are experimenting with a new trading method in the options market. As SpaceX's stock price, which entered the US stock market in June and fell below the issue price, passed a key test of lifting the ban and sell-off on Thursday, professional traders are now actively betting that the bottom zone may have appeared and ushered in an optimal bottoming period.
The probability of SpaceX forming a phased bottom has indeed risen significantly, but in the opinion of some analysts, it cannot be described as “the funds unanimously confirm a new round of upward trend” for the time being. The first batch of 9115 million restricted shares increased to about 1.55 billion shares, constituting a potential supply shock at the level of nearly 100 billion US dollars; however, the stock price rose 6.14% to $114.92 US dollars on the day the ban was lifted, and about 255 million shares were traded throughout the day, indicating that the 13.6% sharp drop after the earnings report on Wednesday had already released quite a bit of pressure on lifting the ban, capital expenditure, and profit orders ahead of time. The additional sales were also effectively absorbed by bottom funds and short compensation.
This is also a very typical “empty spot without falling” signal: it proves that there is strong marginal acceptance around $105-110, but it is not enough to prove that long-term supply pressure is over, because there are still many stages and large-scale shareholder bans to be lifted, and the stock price is still below the $135 IPO issuance price.
The bottom-up sentiment about SpaceX is also embedded in the rapid restoration of the overall risk appetite of US stocks: S&P 500 bullish options sold over 4 million in a single day and set a record, showing that investors' concerns about a shortfall surpassed protection against pullbacks; after experiencing severe deleveraging in crowded technology stocks, Goldman Sachs trading last week recorded the largest weekly net purchase in the US stock market since November 2020, and was mainly driven by bears' compensation.
As the richest person in the world so far, Musk has accomplished what others thought was impossible in the past — building a commercially viable high-frequency rocket launch business through SpaceX, bringing electric vehicles into the mainstream market through Tesla, the global electric vehicle leader, and providing internet connection infrastructure services from space through Starlink (Starlink). However, there are also investors who doubt whether Musk can actually build his latest “most epic” core building operation in Austin and whether he can actually achieve the “superblueprint for large-scale penetration of artificial intelligence technology, autonomous driving, humanoid robots, and space AI data centers.”
“Sell Put+ Buy Call” is the bottom line! Risk reversal deals heavily bet SpaceX will bottom out
Up to now, capital flows for SpaceX options have mainly been dominated by off-price call option purchases, but Thursday's most popular directional targeted trading — despite a small margin of advantage, suddenly evolved into selling put options. SpotGamma statistics show that of the $600 million option premium traded as of midday trading in the US stock market, $316 million came from put options, of which about $166 million may be related to selling put options. This is still a bullish option view, but it is more about betting that the stock price will stabilize and bottom, rather than expecting it to rise sharply.
Most options trading volume on Thursday was roughly evenly split between put options and call options, but the two largest trades of the day in terms of value revolved around a combination of call options: buying call options at the same time as selling millions of dollars worth of put options. This structure is known as option trading that bets on risk reversal. By shorting put options and going long on call options, a double bullish exposure is formed.
Shortly after the opening bell rang, a professional institutional trader apparently sold a put option worth $12 million with an exercise price of $90 million and due to expire in June next year, then bought bullish options worth $4.3 million with an exercise price of $220 million and the same expiration date, and eventually collected a net premium of $7.7 million. This is actually a bet that SpaceX's stock price will not drop sharply by 20% in the next ten months, while also betting that there is an additional chance that its share price will double.
Later in the afternoon of the same day, a smaller deal with the same structure was completed: a trader sold a put option worth $3.5 million, with an exercise price of $75 million and due to expire in January 2028, and then bought the same amount of call options with an exercise price of $185 and the same expiration date. This time, the call option was worth $5 million, and its cost was significantly higher than the premium obtained by selling the put option, so the deal was completed as a net outlay.
Since the launch of SpaceX Options, continuous bullish option buying has so far been an inverse indicator; however, these two large-scale professional trader-level options operations with clear bullish intentions and include selling options — selling options is a long-term favorite strategy of hedge fund traders with more financial strength — suggests that most professional traders believe that the stock may be forming a major bottom.
If you take a quick look at the stock price chart, you can also think that there is some significant evidence at the technical level. SpaceX shares hit a new low on Monday — the day before the company announced earnings — but it has been trading close to $110 for most of the time since July 23. Downside activity has also slowed. The 14-day Relative Strength Index (14-day RSI), which is technically critical, bottomed out at the end of last month, and implied volatility fell to its lowest level since June 30.
Furthermore, on the day the ban ended by the first group of insiders, SpaceX stock prices continued to rise; previously, many investors believed that this incident would trigger a new round of large-scale sell-off and collapse of SpaceX shares.
SpaceX crosses supply stress tests, “smart money” starts betting on wind reversal deals
Overall, based on three types of signals from stock decline points, options, and seller research, the probability that SpaceX will form a phased bottom has increased significantly, but this does not mean that “capital unanimously confirms a new round of upward trend.”
The first batch of 9115 million restricted shares was lifted to about 1.55 billion shares, constituting a potential supply shock of nearly 100 billion US dollars; however, the stock price instead rose 6.14% to $114.92 on the day the ban was lifted, and approximately 255 million shares were traded throughout the day, highlighting that the 13.6% post-earnings drop on Wednesday had already released quite a bit of pressure on lifting the ban, capital expenditure, and profit margins ahead of time. The new sales were also effectively absorbed by bottom capital and bear compensation, which strongly proved that there was a strong margin of capital acceptance around $105-110.
The flow of funds in options is certainly more informative than simply buying a call option. Of the approximately $600 million premium transaction on the same day, about 166 million US dollars may have come from selling put options; the two large-scale risk reversal transactions also “sell lower put+ and buy upper call” to simultaneously bet capital on “limited downside space” and “preserve significant upward flexibility.” Selling a $90 Put and buying Call for $220 in June 2027 essentially promises to take over around $90 and bet on the possibility of doubling the stock price; this type of strategy is generally closer to institutional probability distribution transactions than retail investors chasing high execution price calls.
At the technical level, combined with the RSI indicator bottoming out on the 14th, implied volatility falling, and rising against the ban day, professional hedge fund traders seem to be switching from “chasing the end of the upside” to “selling downside fears and building asymmetric bulls”, that is, the market began trading in the bottom range, rather than just trading for a brief rebound.
The seller's report provided a fundamental fulcrum for this bottom deal. SpaceX's second-quarter revenue increased 92% year over year to 7.814 billion US dollars, adjusted EBITDA increased 191% to US $3,538 billion; AI revenue increased 247% year over year to 2,561 billion US dollars. AI computing power scale increased from 0.4 gigawatts to 1.4 gigawatts in the same period last year, and signed a cloud service contract of 14.1 billion US dollars. However, in response to this, total capital expenditure reached 18.369 billion US dollars in a single quarter, of which AI capital expenditure was 15.828 billion US dollars, far exceeding AI-related revenue for the current quarter, and the company still recorded a net loss of 541 million US dollars.
After SpaceX's results were released, Wall Street financial giant J.P. Morgan Chase raised the target price from 225 US dollars to 240 US dollars, Goldman Sachs raised to 220 US dollars, and Morgan Stanley maintained 300 US dollars, reflecting an increase in the long-term final value of Starlink (Starlink), AI cloud computing power, and vertical integration, but this does not mean that Wall Street denies short-term free cash flow and financing pressure.
SpaceX's bottoming out sentiment is also embedded in a rapid recovery in the overall risk appetite of US stocks: S&P 500 bullish options sold over 4 million in a single day and set a record, showing that investors' growing concerns about shortfalls outweigh protection against pullbacks; after crowded technology stocks experienced severe deleveraging, the Goldman Sachs Trading Desk recorded the largest weekly net purchase of US stocks since November 2020, and is mainly driven by bears' compensation. Therefore, the current macro funding environment is particularly beneficial for SpaceX, which has crowded short positions and is highly option-sensitive — rising stock prices force bears to buy back stocks, and market makers choose to continue buying to hedge against Call (bullish) exposure, leading to a reverse upward trend. But this also means that the current rebound includes a fairly high percentage of mechanical reimbursement and FOMO funding, not all of which are stable long-term institutional increases; once index risk appetite weakens, AI capital expenditure is questioned again, or the next round of unbanned supply exceeds expectations, this part of the liquidity drive may quickly reverse.
When investors buy a large number of call options (Call), market makers that take on counterparties are often in a position to sell Call, or short Call. A short call has a negative delta: Assuming that a standard stock option corresponds to 100 shares, and the delta for a call is 0.40, then the market maker bears a directional risk equivalent to shorting 40 shares after selling one. In order to maintain delta neutrality, market makers bought around 40 shares to hedge. An OIC study clearly states that negative delta positions usually need to be hedged by buying the underlying stock, while standard stock options generally correspond to 100 shares.
The point is that after the stock price rises, Call Delta will usually continue to grow. As a result, a counterproductive chain may be formed: investors buy Call — market makers sell Call and buy shares to hedge — stock prices rise — Call Delta increases — market makers buy additional shares — stock prices rise further. This is what the market often calls Gamma Squeeze (Gamma Squeeze). It is most obvious when the options are large, the market maker's margin is Gamma, the call is close to flat value, the term is short, and the stock price quickly approaches the execution price.
According to some senior analysts, SpaceX's strong rise of more than 6% in a single day on Thursday meant that it passed the first supply stress test, evidence of a tactical bottom is accumulating, and has already entered the early stages of “bottom building — potential reversal,” but the medium-term upward trend has not been officially confirmed. The real confirmation conditions include continuing to maintain the support area of about $105-110, recovering the $135 IPO price in volume, not setting a new low after lifting the ban, and the ability of AI computing power contract revenue to catch up with capital expenditure and improve free cash flow. Until these conditions are met, selling put put options and risk reversals reflect “the falling odds have improved” and is not the same as “the upward path has been determined.”