SpaceX options traders price in 8% post-earnings swing

Space Exploration Technologies Corp. (SPCX) faces a big test after Tuesday's closing bell when the company is slated to report its third-quarter earnings. The stock finished Monday's trading session up 1.3% at $147.96 but slipped 1.1% to $146.33 in Tuesday's premarket trading.

The Q3 consensus EPS estimate stands at $0.13 per share, marking a return to profitability from a loss of $0.09 per share in Q2. Revenue is expected to reach $13B, up sharply from $7.8B in the previous quarter.

Options market pricing based on Monday's close signals a volatile reaction, with traders pricing in a substantial swing of nearly 8% in either direction by the end of the week. This implies an estimated $11 to $12 post-earnings move in the share price. Looking at the options chain expiring Oct. 23, trader positioning reveals a mix of highly optimistic upside bets and heavy downside protection.

On the bullish side, market participants are making significant upside bets placed well out-of-the-money. The $170 strike call stands out as the most active contract across the entire chain, registering 21,939 traded contracts and an open interest of 21,371.

Considerable optimism is also clustered around the $167.50 and $160 call strikes, which logged heavy volumes of 16,742 and 14,004 contracts, respectively. This aggressive call positioning suggests a subset of investors expects a sizable post-earnings rally or major upside catalysts in the upcoming management call.

Conversely, downside protection is heavily anchored lower down the chain. The $140 strike put dominated defensive trading, accumulating a volume of 17,901 contracts against an open interest of 14,524. Further out-of-the-money puts at the $135 and $130 strikes also experienced elevated activity, posting volumes of 7,666 and 7,086 contracts, respectively.

These dense clusters of put options represent key support targets and highlight substantial hedging activity against the risk of a disappointing financial print.