SpaceX shares have stabilized around $140 for three weeks, trading in a $10 range after an explosive debut and sharp crash that made it the most volatile large-cap stock.
Implied volatility has collapsed to 57 from over 120 before the recent earnings report, according to ThinkOrSwim data. The stock no longer ranks in the top 25 most volatile names in the S&P 500.
Bulls attribute the calm to conviction among insiders and early investors who held through the first equity lockup period expiration. Index inclusion in the Nasdaq-100 and Russell 1000 has also smoothed volatility by widening the shareholder base.
Noel Smith, CIO and founder of Convex Asset Management, predicted in June that SpaceX's volatility would collapse. "SpaceX now lives in the city," Smith said, meaning the stock has integrated into broader market dynamics.
But Smith warns that cheaper options are not a bargain. "Just because it's the cheapest it's ever been relative to itself doesn't mean much," he said. "If you really pressed me on what I'd do at vol 54 or 55, I'd still say sell it."
His caution is grounded in a structural reality: implied volatility at 57 still exceeds realized volatility, meaning outright option purchases appear artificially cheap.
Options contracts expiring Sept. 25 are pricing a $16 move, or 11 percent—smaller than implied moves priced into Intel, Robinhood Markets, Corning and Dell Technologies.
Options flow, however, tells a bullish story. On Thursday alone, 335,000 calls traded versus 75,000 puts, according to SpotGamma data. The top seven contracts by volume were all calls. The most popular was the 144-strike call expiring the next day, requiring a 3.5 percent rally to profit.
Open interest data from Barchart show more puts than calls overall, with a put/call ratio of 1.1, down from an all-time high of 1.2 on Monday. The shift suggests institutional rebalancing favoring upside.
One institutional trade crystallizes the bullish thesis: a trader collected $7.7 million net by selling June 2025 90-strike puts while buying 220-strike calls with the same expiry. This structure bets against a 20 percent drop over 10 months and bets on a double.
The options market is pricing heavy upward skew at higher strikes, reflecting demand for out-of-the-money calls well above the current price—traders are willing to pay premiums for lottery tickets.
SpaceX's first earnings report cleared the way for 911.5 million locked-up shares from insiders and employees to potentially sell starting Aug. 6. This will increase both tradable and lendable supply, a potential headwind for momentum plays.
