Despite widespread fears that Thursday’s massive post-IPO share unlock will crush the stock, institutional options traders are aggressively betting on a near-term Space Exploration Technologies Corp. (NASDAQ:SPCX) rally.
$111 Calls See Massive Premium Spike
Ahead of Thursday’s opening bell, the options market is flashing a distinctly bullish signal that contradicts conventional Wall Street wisdom. Traders have heavily accumulated SPCX call options expiring on Friday, Aug. 7, specifically targeting the $111 strike price.
According to options chain data on Nasdaq, the premium for these short-term $111 calls spiked dramatically on Wednesday, surging by $2.40 to close at $6.55 per contract.
This unusual options activity—effectively tripling the contract’s baseline price—suggests that “smart money” expects the stock to swiftly absorb any selling pressure and surge past the $111 mark by the end of the week.
Analysts Question Market Optimism
This aggressive bullish positioning directly challenges the bearish narrative surrounding the company’s first major lock-up expiration, which makes roughly 911 million previously restricted shares eligible for trading.
The Future Fund’s Gary Black has been highly critical of investors buying into the aerospace giant ahead of the unlock. “This makes no sense with 911.5M new SPCX shares potentially entering SPCX’s float tomorrow, which will double its size,” Black stated, questioning the logic of buying the recent dip.
However, the impending dilution is not a single, instantaneous event. The expiration of these locked shares—primarily held by executives, employees, and early investors—will happen in a staggered manner and go on till December, and Elon Musk‘s personal shares will be locked until June 2027.
This will gradually increase the freely tradable float rather than flooding the market entirely on Thursday.
A ‘Capex Tug of War’
While SpaceX has faced recent downward pressure due to a massive $18.4 billion capital expenditure outlay, some view the investments as a long-term catalyst.
Tech analyst Dan Ives recently characterized the dynamic as a “capex tug of war between SpaceX and investors,” emphasizing that it is a “necessary buildout.” For now, options traders are betting that SpaceX’s stock will launch higher, ignoring the dilution fears altogether.
SpaceX Stock Price Action
SPCX shares closed Wednesday at $108.27 per share and hovered around $110 to $111, up by 2.53% in premarket trading.
Benzinga’s Edge Stock Rankings indicate that SPCX maintains a weak price trend in the short, long, and medium terms.
Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
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