Space Exploration Technologies (SPCX) debuted its highly anticipated IPO at $135, started trading at $150 and rocketed (pun intended) to $225 for a brief moment. As the new issue is currently enduring aggressive price discovery and traded down to $122 Friday morning following the automatic abort of Starship Flight 13 just seconds before liftoff. With this future outer space data center leader down 45% from its all-time high and roughly 20% from its IPO first trading price, I want to use options in SPCX to express a bullish view, capitalizing on elevated implied volatility to position for a rebound as the company prepares for another launch attempt as early as next week. With the stock under pressure and the Elon “Trillionaire” or “Not a Trillionaire” tweets pumping, the options market is seeing massive activity. The uncertainty surrounding the Starship timeline has dramatically inflated implied volatility (IV). Focusing on the fear currently priced into SPCX options provides a potential opportunity. Even more fascinating is the pricing asymmetry: The put skew on SPCX is massive right now, making downside protection significantly more expensive than equidistant upside options. Trade: Bullish risk reversal In an attempt to capitalize on the historically expensive downside SPCX options and position for a violent snap-back, this risk reversal seeks to finance upside exposure by fading the put skew. Sold the 8/21/2026 SPCX $100 put for $3.75 Bought the 8/21/2026 SPCX $150 call for $6 This spread will cost an investor $2.25 ($225 per one lot spread) to initiate this position. SPCX was chopping around $125 at the time of this risk reversal’s execution. I am trying to take advantage of the massive put skew. If the market’s overreaction to the aborted test flight subsides and SpaceX successfully launches next week, those expensive downside puts should decay rapidly. By selling the $100 put, I am generating $3.75 in premium and expressing a willingness to own the stock at $100 (I already own it as we just entered into a position for our Mango Growth ETF (GARY)) as we anticipated a retest of its IPO price at $135; a 25% discount to its IPO price. I am using that premium to heavily subsidize the $150 call, cutting my entry cost down to just $2.25. As long as SPCX catches a bid and surges back above $152.25 at expiration, this trade offers uncapped upside participation. The extreme fear and emotion currently priced into SpaceX’s options chain speaks volumes into how traders are tactically approaching this new trillion-dollar company. DISCLOSURES: Kilburg executed this risk reversal, and currently holds a position in SPCX in his Mango Growth ETF (GARY). All opinions expressed by the CNBC Pro contributors are solely their opinions and do not reflect the opinions of CNBC, or its parent company or affiliates, and may have been previously disseminated by them on television, radio, internet or another medium. THE ABOVE CONTENT IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY . THIS CONTENT IS PROVIDED FOR INFORMATIONAL PURPOSES ONLY AND DOES NOT CONSTITUTE FINANCIAL, INVESTMENT, TAX OR LEGAL ADVICE OR A RECOMMENDATION TO BUY ANY SECURITY OR OTHER FINANCIAL ASSET. THE CONTENT IS GENERAL IN NATURE AND DOES NOT REFLECT ANY INDIVIDUAL’S UNIQUE PERSONAL CIRCUMSTANCES. THE ABOVE CONTENT MIGHT NOT BE SUITABLE FOR YOUR PARTICULAR CIRCUMSTANCES. BEFORE MAKING ANY FINANCIAL DECISIONS, YOU SHOULD STRONGLY CONSIDER SEEKING ADVICE FROM YOUR OWN FINANCIAL OR INVESTMENT ADVISOR. Click here for the full disclaimer.
SpaceX has tumbled below its IPO price. How Jeff Kilburg is trading for a potential rebound
