SpaceX (SPCX) is finally trading, the IPO dust is settling, and – most importantly for options trader is that a couple days after the stock opened for trading, options have now listed. And when options start trading, hedge funds and institutions get involved. And this week we saw two big, but completely opposite, bets cross the tape in SPCX, one day apart. A bearish put spread on Wednesday … and a bullish call buy on Thursday.
That makes for a perfect teaching moment, so let’s walk through both. Together, they show how you can lean bullish or bearish on a volatile, expensive name like this one – while keeping your risk defined the whole way through.
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The Bearish Bet: January 185/135 Bear Put Spread
Here is the bearish trade my options scanning tool picked up on Wednesday, June 17:
Buyer of 4,000 SPCX January 185/135 Bear Put Spreads for $24.80 – Stock trading at 196.
A bear put spread is one of the cleanest defined-risk ways to bet a stock heads lower. You buy a higher-strike put and sell a lower-strike put against it. The structure here:
- Buy the January 185 put (this is the leg that makes money as the stock falls)
- Sell the January 135 put (this leg brings in premium to lower your cost)
Here’s the math on the position:
| Net debit paid | Max profit | Max loss |
| $24.80 ($2,480 / contract) | $25.20 ($2,520 / contract) | $24.80 ($2,480 / contract) |
Because this trade is 4,000 contracts, that’s roughly $9.9 million in premium at risk, with a max payoff near $10.1 million if SPCX truly cracks.
Why a spread instead of just buying the 185 put?
This is the key lesson on a fresh IPO. We warned before SpaceX even started trading that implied volatility (cost of options) would be sky-high and the option markets would be wide. That makes outright puts very expensive. By selling the 135 put against the 185, this trader knocked the cost of the position way down.
The tradeoff? You give up profit potential below 135 – the short put caps your gains down there. But betting a $196 stock collapses all the way through 135 with a naked put would cost a small fortune in premium. The spread is the cost-conscious way to play it.
P&L at January expiration (per contract):
| SPCX at expiry | Scenario | P&L per contract |
| $196 | Where it traded – both puts worthless | −$2,480 |
| $185 | At the long strike – max loss | −$2,480 |
| $170 | 185 put in-the-money $15 | −$980 |
| $160.20 | Breakeven | $0 |
| $150 | Spread working | +$1,020 |
| $135 | At the short strike – max profit | +$2,520 |
| $120 | Below 135 – gains capped | +$2,520 |
The Bullish Bet: July 190 Calls
Now here is the bullish trade made on Thursday, June 18:
Buyer of 7,000 SPCX July 190 calls (expiring 7/10) for $12 – Stock at 180.
This is the simplest bullish trade in the book: buy a call, get the right to buy 100 shares at the strike, and enjoy leveraged upside if the stock rallies. Your risk is defined – the absolute most you can lose is the premium you paid. The structure:
| Premium paid | Breakeven | Max loss |
| $12.00 ($1,200 / contract) | $202 | $12.00 ($1,200 / contract) |
The max profit here is unlimited – the higher SPCX flies, the more the call is worth.
Breakeven is 202 (the 190 strike + the $12 paid).
At 7,000 contracts, that’s $8.4 million of premium on the line.
The catch: This needs a big move, and fast.
This is a short-dated, out-of-the-money bet. The stock is at 180, the strike is up at 190, and there are only about three weeks until the 7/10 expiration. To even break even, SPCX has to get to 202 – that’s a +12% move in three weeks.
If the stock just sits at 180, or drifts sideways, that $8.4 million bleeds away to nothing as time decay does its work.
This trader needs a sharp, quick pop.
P&L at July 10 expiration (per contract):
| SPCX at expiry | Scenario | P&L per contract |
| $180 | Where it traded – call worthless | −$1,200 |
| $190 | At the strike – still worthless | −$1,200 |
| $202 | Breakeven | $0 |
| $210 | Call worth $20 | +$800 |
| $220 | Call worth $30 | +$1,800 |
| $230 | Call worth $40 | +$2,800 |
| $250 | Call worth $60 | +$4,800 |
Key Takeaways
The thing I’d point out is that both of these are defined-risk trades. Neither trader can lose more than they put up, which is exactly the discipline we preach at Cabot Options Trader.
Between the two structures, the bear put spread is the more “professional” build, in my eye. It respects how outrageously expensive this stock’s options are right now and uses the short strike to cut the cost.
The outright call buy is the gunslinger move – pure leverage, but you’re paying a fat premium for a name that just fell 16 points in a single day, and you need it to scream higher within three weeks.
As for me, given the wild stock and option volatility and the wide markets, I’m in no rush to plant a flag. I’d rather let SPCX establish a real trading range and continue to monitor option order flow before I get involved.
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