By Steven M. Sears

Options on SpaceX stock began trading when the stock market opened on Tuesday. The options listing is a monumental event for a stock that has already become one of the world's most desired equities.

Because options cost far less than shares, a trading frenzy is expected to erupt as investors gamble on SpaceX's stock. The options trading is likely to boost the stock, though it could create some intraday price swings.

Initial listings data indicates that SpaceX's options will have strike prices ranging from $25 to $380. The first tranche of options will expire on Thursday. After that, SpaceX's options expirations will adhere to the standard monthly expiration cycle. We expect exchanges will be under significant pressure to add so-called zero-dated options, whose truncated expiration cycles enable investors to bet on daily stock swings.

Anyone who wants to trade SpaceX's options should expect to encounter a raucous market. Demand for the stock is so high that the options are likely to be among the most actively traded in the entire options market, joining a pedigreed club that includes Apple, Amazon, Nvidia, Meta, and others in an exclusive club.

SpaceX stock is up about 7% in early trading, and we expect two primary trading strategies will shape the options market.

Investors will likely rush to buy call options, which increase in value when stock prices rise. This simple strategy should push the implied volatility of the calls to higher levels than SpaceX's put options, which increase in value when stock prices decline.

Early options trading patterns indicate investors think the stock will continue to rally, Michael Schwartz, Oppenheimer's chief options strategist, tells Barron's. The stock, at $135, is up about 62% since Friday's IPO.

"Investors are aggressively trading SpaceX options and looking for it to top $220 by the end of the week," he says.

The excitement for the stock's advance is also likely to compel many investors to sell puts on SpaceX stock. Investors sell puts to position to buy the stock at lower prices, or to profit from advances. The money received for selling puts can be kept if the stock remains above the strike price.

Trading in SpaceX options is expected to be chaotic. Spreads -- the difference between bid and ask prices -- should be wide because there isn't enough information for dealers to refine options pricing.

Investors who trade SpaceX options should use limit orders. By specifying buying and selling prices, limit orders give investors a bit more control over trades.

One of the most important pieces of information that is needed to evaluate SpaceX options has yet to be revealed: implied volatility levels.

When options start trading, implied volatility data will populate on trading screens. It's likely SpaceX options will have high implied volatility that is much higher than the S&P 500 index, due to the bullish demand that will find expression in the options market.

Chris Jacobson, a derivatives strategist at Susquehanna Financial Group, says he expects retail investors to be very active. He thinks institutional investors might wait for SpaceX options trading patterns to settle before they take on large options positions.

"That said, you could see opportunistic vol sellers come in to take advantage of what I'm assuming will be quite high [in absolute terms] implied volatility," he tells Barron's.

Indeed, the initial determination of SpaceX's options implied volatility is as much art as science. Jacobson says that SpaceX's volatility -- which indicates how the options market is pricing the stock -- will likely reflect a combination of companies that are in the same business as SpaceX, other recent high-profile initial public offerings, and the stock's trading pattern since Friday's IPO.

The final implied volatility level will be determined when there is a balanced flow between options buyers and sellers of options. "Put differently, if you come up with a theoretical implied volatility of 80% but there are only buyers of options at that level, you are going to move volatility higher regardless of what your model says," Jacobson says.

To understand how SpaceX's options might evolve it is helpful to consider Tesla, Musk's electric-vehicle company.

In recent years, Tesla has dominated the U.S. options market's trading volumes as investors -- generally retail ones -- have clamored to speculate on Tesla's stock surging ever higher. In recent years, Tesla has at times dominated as much as 44% of all single-stock options volume. Much of the trading volume was dominated by bullish call buying.

"SpaceX is likely to quickly become one of the top-traded options in the entire market. It will take a little bit of time, however, for pricing and volatility levels to work themselves out," says John Marshall, a senior partner at Carrick Lane, an asset-management firm that specializes in options. Previously, Marshall was Goldman Sachs' derivatives strategist.

It is premature to entirely superimpose Tesla's trading patterns on SpaceX, but that is exactly what many seasoned investors are referencing as the SpaceX options market develops.

When a new options class is listed, initial trading volume tends to come from retail investors and dealers. Institutional investors tend to wait, often for months, for the options market to mature. In the early days, spreads are often wider than merited, and volatility levels are unusually elevated.

The "cowboy market" creates opportunities for aggressive traders who are willing to use options to bet on stock prices. Large institutional investors, especially systematic investors, need seasoned data to make decisions -- and that takes a lot of time.

"It's a process," Marshall says.

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June 16, 2026 11:13 ET (15:13 GMT)

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