Trading in SpaceX options launched with historic velocity on Tuesday, shattering records for the most heavily traded derivatives debut in stock market history. The massive volume underscores a ravenous investor appetite for the newly listed aerospace giant.
A Record-Breaking Launch
Within the first hour of trading, over half a million contracts changed hands. By 11:40 a.m. ET, volume soared to approximately 869,000 contracts, fueled heavily by bullish sentiment.
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The Ratio: Call options (bets that the stock will rise) outnumbered put options (bets that it will fall) by a 1.5-to-1 margin.
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The Rank: SpaceX options instantly became the second-most heavily traded contracts on an individual company, trailing only Elon Musk’s other market darling, Tesla.
Fueling a “Gamma Squeeze”
The intense demand for bullish call options created a slipstream effect, pushing SpaceX’s underlying stock price drastically higher. Analysts attribute this to a market dynamic known as a gamma squeeze.
How it works: When investors buy an overwhelming number of call options, market makers (the dealers who sell those options) must buy actual shares of SpaceX to hedge their own risk. Because dealers cannot hedge SpaceX with any other asset, their mandatory buying loop forces the stock price even higher.
Entering the Top Five
The options frenzy follows a spectacular market debut last Friday, where SpaceX shares surged over 25%, initially pushing its valuation past $2 trillion.
On Tuesday, the momentum continued:
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SpaceX shares climbed more than 14%.
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The company’s valuation surpassed Amazon.com and briefly overtook Microsoft.
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Within just days of going public, SpaceX has firmly cemented its place among the top five most valuable companies in the world.
Market experts predict that while the options will remain highly volatile with wide bid-ask spreads due to a limited share float, SpaceX is already on track to develop one of the deepest, most active derivatives ecosystems in the stock market.
