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It's been a busy three months for SpaceX.
The company delivered four astronauts to the International Space Station in record time, expanded its mobile network spectrum, is reportedly eyeing a $40 billion debt deal to buy Nvidia chips, and CEO Elon Musk said he plans to give shares to every kid in America next year.
Traders think all that means more gains for the stock after it reports earnings after the bell Tuesday.
Options market-makers are pricing about a 6% swing for SpaceX after the event, according to Cboe LiveVol data. That's less than half the 13% it erased after its inaugural report in August, a selloff that turned out to be the low for the shares, which rallied 60% the following two months before reversing before dropping as much as 19% the past two weeks.
While there are about as many open call contracts as puts on the stock, daily trading volume has leaned toward calls the past week, Barchart data shows.
Among the 1.1 million contracts traded Monday – 20% higher volume than the 30-day average – 665,000 were calls, with more bought than sold, according to Cboe LiveVol. Traders also bought more calls than puts, and sold more puts than they bought, the data show, decidedly bullish flow as the space giant heads into its second earnings.
The most popular call contract for Friday expiry was the 170-strike, which needs about a 14% rally, according to SpotGamma data. There was also notable buying in the 190-strike call for month-end, a 40-cent contract that needs SpaceX to rally 29% to break even.
SpaceX, YTD
For that to happen, SpaceX will have to rally through two more share lockup periods: a scheduled release two days after earnings, as well as another on October 26 that together will amount to over 1.6 billion eligible shares for sale. So far that hasn't been a problem for the stock, as releases on Sep. 9, 10, and 24 had no discernible effect on the share price.
Implied volatility is much lower in SpaceX going into this report compared to last quarter, as reflected in the implied move. SpaceX traded with an IV of 62 on Monday, compared to above 110 before releasing second-quarter earnings, according to ThinkOrSwim.