Shares of SpaceX (SPCX) are moving higher after a busy weekend for the rocket and AI company. SpaceX launched NASA's Nancy Grace Roman space telescope, which will study dark matter and dark energy. NASA delayed the upcoming Crew-13 mission after finding an issue during pre-launch processing of the Dragon spacecraft.
Lockups and upcoming launches
Another 378 million shares unlock next week, which could add some short-term price swings. Roughly 3 billion more shares could become available by year end, though each unlock is expected to hit the stock less. Not everyone will sell in these lockups, and some may sell only a small slice. The first lockup that worried people actually turned into a rally on those days, so fixating on lockup expirations misses the point. Two more Starlink launches are scheduled this week from California.
The stock is above $143 a share, up over 30% so far in August, and higher for the fifth day in a row. After a volatile first few days and weeks, it is settling in, and its dominance in space infrastructure is coming into view.
The revenue story
SpaceX is not a new company. Revenue in the second quarter grew 91%. Projected annual recurring revenue could reach $100 billion by December. The company targets $1 trillion in total revenue by 2030. These are lofty numbers, thrown out much like Tesla (TSLA) did for years, so reaching them will be hard.
SpaceX is folding in XAI, bought for $250 billion. XAI revenue last quarter was $2.5 billion, up from $700 million the year before, so there is real growth. SpaceX is building a $100 billion launch area in Louisiana and will need to ramp up launches. Starlink revenue keeps expanding and may push into telecommunications, taking market share from cellular firms. On forward valuation the stock does not make much sense, but if SpaceX hits its stated revenue targets, that is where the optimism lives.
The bullish trade: call calendar
The bullish paper-money trade is a risk-defined calendar spread, chosen because the stock can be volatile. Buy the farther-out date, sell the closer one. Implied volatility has dropped a lot from the original IPO levels, and it now sits at its lowest post-IPO level. Buying calendars in low volatility costs less because the calendar price contracts.
The trade: buy the September 25 weekly 150 call (25 days to expiration), sell the September 11 weekly 150 call (about a week and a half out). It is a two-week call calendar trading around $2.47, up from about $2.30 earlier. It collects a little theta and is about eight deltas long, so it is a directional bet that wants a slow grind up toward $150, about $7 above the current price. The range where it stays profitable runs roughly $140 to $160. The debit paid, about $240 per spread, is the risk.
The near-term September 11 150 call holds about $2.40 of extrinsic premium. If the stock grinds toward $148-$149, that call expires worthless, and you can buy it back and roll to another weekly series to collect credits, raising potential profit. A grind higher gives max profit, but even if the stock stays around $140-$143 there is a good chance to profit, helped by elevated near-term implied volatility and the ability to collect credits on rolls. If the move takes a week, extend duration from September 11 into September 18 and chip away at the net debit.
The bearish trade: broken-wing put butterfly
The bearish side is more directional. It is an unbalanced, broken-wing put butterfly in the September 18 monthly options (18 days to expiration): buy one 143 put (at the money), sell two 135 puts (the target), buy one 133 put. That is buying an $8-wide bearish put vertical and selling a $2-wide one to offset cost. The debit is about $2.70 per spread, maybe a dime cheaper, and that debit is the risk.
The break-even is $140.30, about $3 or 2% below the current price, well within what the options market is pricing for movement over the next 18 days. Max profit is about $530, roughly a triple. It is in the butterfly family but plays directional: staying profitable even past 135 and 133. If the stock falls out of bed and drops below the $135 IPO price, maybe down to $130, the trade is still more than a double, though some profit falls off below the 133 level.
The bull side is more range-bound; the bear side is more aggressive.
