SpaceX options trading explodes: May surpass Nvidia and Tesla
SpaceX stock options are now officially listed and trading, with trading heat rising rapidly after the opening.
Within less than 30 minutes of US stock market opening, SpaceX options volume ranked third among individual stock options, behind only Tesla and Nvidia. Those two stocks typically see millions of contracts traded daily, with options turnover exceeding US$1 billion.
Tom Sosnoff is the co-founder of trading software ThinkOrSwim, founder of TastyTrade, and CEO of Lossdog. Decades ago, he pushed options trading to ordinary individual investors, and many in the industry call him the godfather of options trading. He predicts that SpaceX options volume will eventually top the list of individual stocks in the US market.
The Chicago-based insider said in a text message: "Once market trading stabilizes and liquidity fully releases, after major high-frequency trading institutions have formed a unified expectation of volatility, SpaceX options volume will likely surpass Tesla and Nvidia to become the most actively traded individual stock in the US market. This is good for both industry development and individual retail investors."
ThinkOrSwim trading data shows that within the first 30 minutes of US stock trading on Tuesday, SpaceX options volume exceeded 300,000 contracts; call options volume far exceeded put options, with call buying more than double put buying.
According to options data service provider SpotGamma, within half an hour of opening, total premium turnover for SpaceX options exceeded US$400 million, with call options related turnover exceeding US$300 million. In terms of trading heat, the most popular was the call option expiring this Thursday with a strike price of US$220; after the stock surged 16%, this contract is at-the-money. Call options with a strike price of US$210 (in-the-money) also traded briskly, with initial premium turnover exceeding US$22 million.
Sosnoff gives investment advice: recommend waiting one or two trading days for options pricing to return to a reasonable and efficient range before entering. He estimates that initial options pricing is high, and bid-ask spreads will be too wide.
As of this writing, SpaceX options implied volatility is 135.
