On Monday evening, when we previewed the Tuesday launch of SpaceX options, and with the stock soaring in evening trading, we said that "it could gamma squeeze to 400, surpassing NVDA"

That comment was, of course, facetious but what we saw the next day blew us away, with some traders giving the good old gamma squeeze a valiant try, with volume off the charts in 380 Calls expiring tomorrow.

So some fireworks aside, with the first day of SPCX option trading in the history books, here's what really happened.

As Charlie McElligott writes this morning, the “SpaceX Mania” saw an "absolute PANIC chasing into SPCX Upside where we actually saw people put on Skew trades due to the crazy bid to Upside Calls, allowing them to buy Downside Hedges." 

To be sure, none of that is driven by fundamentals, at least not yet: as Bloomberg writes today, SpaceX may have made headlines for overtaking Amazon’s market cap on Tuesday, but it will take time to catch up on capex spending...

... or revenue. 

But then again, positioning and technicals are all that matter in this market (and as we said, the company that performs best is that one that has the most active deep out of the money calls). And in that regard, SpaceX is truly an outlier (similar to TSLA in 2020 period when the stock went from $15 to $300 in what some to this day call a gargantuan gamma squeeze).

Gamma squeeze aside, SpaceX options were truly an outlier, and at one point were the most actively traded options of any US listed company.

In a note on Tuesday evening, Susquehanna did a lengthy post-mortem of the SPCX option trading, noting that SPCX options were extremely busy on their first day listed, with call volume reaching 994k contracts, just shy of 1 million. That ranked as the fifth-highest call volume of the day, putting SPCX in the same activity bucket as SPY, NVDA, QQQ, and TSLA. The volume is even more notable because weekly options have not been listed yet; those are expected to start trading Thursday, which could further increase short-dated activity and retail participation.

Excerpting form the full report (which has much more detail, and is a must read for anyone trading SpaceX at the institutional level), the flow remained two-sided, but the largest trades increasingly looked like hedges tied to future supply risk. SPCX saw a buyer of 7,700 September 200 puts versus a seller of September 220 calls for $10.20, adding another collar that expires after the first large lock-up date. That follows the earlier large September 205p/225c collar, 27,000 times, where the investor bought puts and sold calls while collecting roughly $1.70, likely in anticipation of the first lock-up expiration on 8/20/26, or 70 days after the IPO.

Early flow included buyers of 1,500 July 300 calls for $14, buyers of 6,500 July 325 calls for $7, July 220 straddles sold roughly 3,000 times at $61, and 1,300 Jun 2027 200 puts sold near $61. That mix shows investors are using the options market both to speculate on another squeeze and to monetize or protect against very high volatility.

SPCX traded in a 15% range for the third straight day, but ultimately closed up a modest 5%. Both tails are very bid: Upside calls reflect demand for another sharp move higher, while downside puts reflect concern around lock-up supply, valuation risk, and the possibility that the initial post-listing enthusiasm fades. The result is a difficult trading setup. The tails look too expensive to buy, but they also look too dangerous to sell.

As Susquehanna concludes, September options provide a useful guide to how wide the market thinks the summer distribution could be. Current pricing implies roughly a 15% probability that SPCX is up another 50% by September, while also implying roughly a 13% probability that the stock falls 50%.

Turning to the dealer side of the equation, SpotGamma notes that modeling positioning shows shows dealers long gamma, particularly into 195 for July OPEX. This suggests short term support but also upside squeeze more challenging. Note into July it looks like there are traders short call long put (dealers have opposite side).

Finally, the options drama is just one layer of the euphoria. As Bloomberg Eric Balchunas writes, trading in 2x SpaceX ETFs has topped $3B (up from $1B yesterday), with nearly all funds already above $100M AUM. SPCH reached $1.3B in volume—reportedly the highest ever for a Day Two ETF, surpassing IBIT’s $500M. 

The rapid inflows suggest intense speculative demand, with multiple leveraged products tracking the same single stock attracting substantial and sustained retail trading activity.

In short, the euphoria is certainly raging for now, which is making both calls and puts very expensive, yet a look beneath the surface shows just how torn the market is as to where this stock goes in a few months after the lockups start expiring.