After an initial surge and subsequent drop, SpaceX shares have remained relatively stable, trading around $140 with a narrow $10 range for three weeks. Implied volatility has decreased significantly from over 120 to 57, reflecting a calmer market environment.
This stabilization is attributed to the confidence of insiders and early investors, as well as SpaceX's inclusion in major indexes like the Nasdaq-100 and Russell 1000. Options trading shows a preference for calls over puts, with a put/call open interest ratio of 1.1, indicating bullish sentiment.
Notably, the most traded options are calls, with a significant volume of contracts suggesting expectations for a price increase. However, analysts caution that while implied volatility appears low, it remains higher than the stock's realized volatility, suggesting that options may not be as cheap as they seem.
Noel Smith, CIO of Convex Asset Management, advises caution, indicating that the current volatility levels might be fair but recommends selling options rather than buying them outright