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SpaceX believers are trying a new approach in the options market.
Up until now, options flows were largely dominated by out-of-the-money call-buying, but the most popular directional trade on Thursday – albeit by a small margin – was selling puts. Of the $600 million in premium traded by midday, $316 million was in puts, with $166 million likely tied to sales of puts, SpotGamma data show. It's a bullish view, but more about the stock stabilizing rather than staging a huge rally.
For the most part, volumes were split between puts and calls Thursday, but two of the biggest dollar-amount trades of the day were bullish combination trades that involved multimillion-dollar put sales alongside long call purchases – a structure known as a risk reversal that offers two points of bullish exposure: short a put and long a call.
Shortly after the opening bell, someone collected a net $7.7 million million selling $12 million of the 90-strike puts expiring in June next year then bought $4.3 million worth of the 220-strike calls expiring the same date. It's effectively a bet that SpaceX won't be down another 20% ten months from now, with an additional wager that the stock could double.
