SpaceX proxy stocks, which had seen increased options trading volumes leading up to the company's initial public offering, are experiencing significant declines. EchoStar shares dropped 14%, AST Spacemobile fell nearly 13%, and Virgin Galactic Holdings saw a 34% loss.
Despite these declines, options traders remain optimistic, with a notable preference for call options over puts, particularly for AST Spacemobile, which traded over 250,000 contracts worth more than $60 million. Danny Kirsch from Piper Sandler noted that both retail and institutional demand are driving this activity.
Concurrently, exchange-traded funds (ETFs) focused on the space sector, such as the Procure Space ETF and the Defiance Drone and Modern Warfare ETF, are also influencing stock prices as they acquire shares of these companies.
The upcoming SpaceX IPO, priced at $135 per share, is expected to attract significant retail interest, potentially making it one of the most actively traded options among retail investors.
Anthony Denier from Webull emphasized that the combination of high share prices and volatility creates a favorable environment for options trading, suggesting that investors may prefer put options as a more practical bearish strategy if shares become scarce