Tesla and SpaceX have together erased about $1.5 trillion in market value since mid-June, with attention now turning to the next major catalyst for Musk's businesses.
Investors will be watching whether the recent sell-off in Elon Musk-led companies has further to run as SpaceX prepares to report its first earnings next week, followed by the expiry of an insider lockup period that could add to market volatility.
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SpaceX Earnings, Lockup In Focus
SpaceX has declined nearly 50% from its recent high, while Tesla shares have fallen 18% since reporting earnings last week. The spotlight is now on SpaceX's earnings report due on Tuesday, with the company's early insider lockup set to expire two days later.
According to options pricing, traders are expecting a sharp move in the stock after the results. Options imply a roughly 15% swing following earnings, while implied volatility stands at 122, making SpaceX one of the most volatile names in the market.
Investors are expecting this lockup expiry to be as crucial as the earnings announcement. Once the lockup expires, more than 900 million shares, representing about 20% of eligible locked-up stock, will become available for trading. The possibility of insider selling has added another layer of uncertainty for investors.
Unlike a typical earnings event, where implied volatility tends to decline once results are announced, traders are weighing whether the lockup could keep volatility elevated or even push it higher in the days that follow.
Also Read: Money Won't Matter In 2036, Elon Musk Makes Bold Claim; Explains Why
Options Market Signals Mixed Sentiment
The options market continues to reflect strong interest in SpaceX despite the recent decline. Contracts expiring on Aug. 7 carry implied volatility of 160, compared with 55 for Tesla.
Retail traders have largely remained optimistic, with nearly 100,000 call options traded on Tuesday compared with about 46,000 put options.
However, activity among larger traders suggests a more measured approach. While the most actively traded contract by volume was the 330-strike call expiring next Friday, larger premium flows were concentrated in November 130-strike call options, where about $8.7 million in premium changed hands across 5,400 trades.
The contrasting positioning underscores the uncertainty surrounding SpaceX's earnings and the potential impact of the insider lockup, events that investors will closely monitor for signs of the company's next direction.
Also Read: SpaceX Short Sellers Pocket $15.5 Billion As Stock Falls Below IPO Price
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