SpaceX shares are rallying once again, climbing from $171 to an intraday high exceeding $225. However, a key distinction separates this rally from its June debut: market volatility has significantly cooled. Upon its initial public entry in June, the stock reached similar heights in fewer than three trading sessions while trailing an implied volatility rate above 110. Currently, that figure sits at 55, recovering slightly from an all-time low below 50 recorded on Thursday.
This compression in volatility has altered the odds assigned by market-makers. Pricing data from the close of Monday’s session indicates that the probability of SpaceX touching $225 at least once between now and July has fallen below 50%. For nearer-term outcomes, there is a 54% chance the stock will reach $185 by month’s end.
Options data also reveals a shift in risk perception. According to Barchart, put options now carry implied volatilities equal to or higher than those of call options. While put premium typically exceeds call premium in broad market indexes like the S&P 500, equity skew can vary. In contrast, Nvidia frequently sees more expensive calls across many expirations, reflecting investor fear of missing rallies rather than dread of crashes.
Despite the cautious volatility metrics, actual trading flows on Monday leaned heavily toward optimism. Data from Cboe LiveVol suggests traders purchased approximately 456,000 calls against fewer than 240,000 puts. Additionally, there was selling activity of roughly 295,000 calls and 250,000 puts, indicating complex hedging strategies amidst the bullish sentiment.
Charles Moon, a technical and momentum trader at Prosper Trading Academy in Chicago, noted that the success of the Starship program has provided tailwinds, but the broader market shift appears imminent. “It seems like Wall Street is piling in starting Q4,” Moon said, adding that SpaceX and Tesla are increasingly moving in sync. ThinkOrSwim data shows the 30-day correlation between the two companies currently stands at 0.66.
Investment analysts remain bullish on the valuation perspective. In a Sunday note to clients, Jonas, an analyst at Morgan Stanley, described SpaceX as one of the more cost-effective avenues to gain exposure to the robust optionality within the space and intelligence economy, particularly when adjusted for growth metrics.
SpaceX and Tesla moving in sync at 0.66 correlation is wild. Maybe Elon’s empire is finally acting like one big company.
Wait, the stock hit $225 but traders only give it a fifty-fifty chance it stays there? That math seems… optimistic?
The volatility drop is huge compared to June. This feels like a much healthier rally, not just speculative panic.