As the IPO of SpaceX approaches, options trading has surged for companies associated with it, reflecting a strong speculative interest among investors. EchoStar, which holds about 3% of SpaceX stock, saw its shares rise 11% on Thursday, with options volume exceeding eleven times its 30-day average. Similarly, AST SpaceMobile's stock jumped 12%, driven by nearly $140 million in options trading.
The demand is not limited to these companies; even Virgin Galactic, which has faced significant declines in its stock price, experienced a spike in options trading activity. Danny Kirsch from Piper Sandler noted that both retail and institutional investors are driving this demand, particularly for short-dated call options as a way to gain exposure to SpaceX.
Additionally, the popularity of space-focused exchange-traded funds (ETFs) is contributing to the elevated prices of these proxy stocks, as investors unable to buy SpaceX directly are turning to ETFs that include shares of companies like AST and EchoStar. The upcoming IPO is expected to price at $135 per share, appealing to retail traders who are willing to pay high premiums.
With implied volatilities for EchoStar and AST at 97 and 129, respectively, the environment is ripe for options trading, potentially making SpaceX one of the most actively traded names among retail investors.
Anthony Denier from Webull emphasized that the combination of high share prices, volatility, and public interest creates a favorable landscape for options trading, suggesting that put options may become a practical alternative for bearish investors if borrowing shares becomes challenging