Shares of SpaceX (SPCX) have rallied more than 40% from their Aug. 3 low near $105. The stock was recently trading around $148, putting $150 — its first public trade — squarely back in play. A break above $150 would open the door to the next big test.
SpaceX traded through the $170 area during its initial post-IPO run, and the $172 to $180 zone emerged as resistance again in July. One way to bet on that move while limiting the dollars at risk is a bull call spread. The investor buys one call and sells another at a higher strike, lowering the upfront cost while giving up gains above the higher level.
The first move is buying the Oct. 16 $150 call. But by itself, it is expensive. The call costs about $17.25 per share, or $1,725 for one contract covering 100 shares.
SpaceX would need to reach $167.25 by expiration just for that option to break even. Part of the price comes from implied volatility, a measure of how much movement options traders expect. At roughly 72%, SpaceX options are carrying a hefty premium.
Selling the Oct. 16 $170 call for about $10.25 brings the net cost down to $7 per share, or $700 for the full position. The trade-off is straightforward — any gain above $170 is surrendered. There was an even cheaper-looking choice that was avoided.
The Aug. 21 version cost about $399 and offered roughly $4 of maximum profit for every $1 at risk. With only nine days until expiration, SpaceX would have needed to make the move almost immediately. October costs more but buys roughly two additional months for the $150 breakout to play out.
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