SpaceX Options Debut Unleashes "Extreme Pricing": Implied 50% Upside Probability Around 15%, Downside Around 13%

On June 17, the first trading day following SpaceX’s initial public offering (IPO), the company launched options trading, sparking widespread market debate over its extreme volatility and elevated valuation risks. Susquehanna strategist Chris Murphy calculated that current option pricing puts an approximate 15% chance the stock will rally another 50% by September, while also pricing in a roughly 13% likelihood of a 50% drop. Murphy noted SpaceX options saw heavy call option volume that day, ranking among the top five most-traded securities overall. His analysis finds that larger trades took the form of hedging structures: bullish options signal bets on additional sharp upside, while bearish options are used to hedge risks tied to supply unlocks (e.g., post-lockup share releases), valuation pressure, and cooling post-IPO sentiment. He stressed this structure has created a market dynamic of "expensive pricing paired with fat tail risk": both upside tail bets and downside tail hedges carry steep costs and asymmetric risks. Market observer Peter Boockvar added that current trading is driven largely by "narratives and sentiment" rather than underlying fundamentals. He pointed out that at these lofty valuation levels, SpaceX will need to sustain strong growth over the next few years to justify its current price tag. Since its IPO, SpaceX’s stock has climbed roughly 50%, pushing its market capitalization past Amazon at one point and coming close to Microsoft’s valuation—fueling ongoing market debate over whether its valuation is sustainable.