SpaceX Options: Why Market Makers Are Tightening Spreads

SpaceX options just launched and Tom Preston went straight to the platform. June options are pricing 201 percent implied volatility. July options are at 125 percent. The 200 puts traded over 32,000 contracts on day one. And the markets are already 5 to 10 cents wide on some strikes. That is impressive for a stock that has been public for two days. Tom explains why the markets are so tight using the market maker framework: high stock volume means market makers can execute their delta hedges quickly, which means they can afford to tighten the bid-ask. Then he shows exactly how he would trade it. A naked short put on the $170 strike requires $16,000 in buying power because of the extreme volatility. Turn it into a vertical by buying the $165 put and that drops to $350 in buying power. For SpaceX specifically: stick to verticals. 📊 tastylive: https://www.tastylive.com/ 📰 Get Tom's pre-market analysis every morning: https://www.tastylive.com/newsletters 📘 FREE Options Strategy Guide: https://tinyurl.com/bp9ms763 📱 Follow tastylive on X: https://x.com/tastyliveshow Chapters 0:00 SpaceX options go live on day one 0:28 June options: 201 percent IV and 2 days to expiration 0:34 July options: 125 percent IV and 31 days out 0:45 200 puts: 32,000 contracts on day one 1:05 Markets are 5 to 10 cents wide: why that is impressive 2:06 How market makers think and why markets get tight 3:07 Market maker delta hedging explained live 4:13 230 million shares traded: why that tightens the options 5:55 How to trade SpaceX options as a retail trader 6:16 Naked short put: $16,000 buying power requirement 6:33 Vertical spread: $350 buying power same trade 7:22 Stick to verticals on SpaceX #SpaceXOptions #SPCX #OptionsTrading #TomPreston #tastylive #CherryBomb #MarketMakers #VerticalSpread tastylive is a real financial network, producing hours of live programming every day. Follow along as our experts navigate the markets, provide actionable trading insights, and teach you how to trade. With over 120 original segments, and over 25 personalities, we'll help you take your trading to the next level, whether you are new to trading or a seasoned veteran. tastylive content is created, produced, and provided solely by tastylive, Inc. ("tastylive") and is for informational and educational purposes only. It is not, nor is it intended to be, trading or investment advice or a recommendation that any security, futures contract, digital asset, other product, transaction, or investment strategy is suitable for any person. Trading securities, futures products, and digital assets involve risk and may result in a loss greater than the original amount invested. Investment information provided may not be appropriate for all investors and is provided without respect to individual investor financial sophistication, financial situation, investing time horizon or risk tolerance. Options, futures, and futures options are not suitable for all investors. Prior to trading securities, options, futures, or futures options, please read all applicable risk disclosures, including, but not limited to, the Characteristics and Risks of Standardized Options Disclosure and the Futures and Exchange Traded Options Risk Disclosure Statement found at https://tastytrade.com/disclosures/. Past performance is not indicative of future results. Performance is not presented net of all commissions, fees, and expenses. Multi-leg option strategies incur higher transaction costs than single leg trades as they involve multiple commission charges. Examples provided are for illustrative, informational, and educational purposes only and are not intended to be reflective of results you can expect to achieve. Supporting documentation for any claims, including claims made on behalf of options programs), comparisons, statistics, or other technical data, if applicable, will be supplied upon request. tastylive, through its content, financial programming or otherwise, does not provide investment or financial advice or make investment recommendations. tastylive is not a licensed financial adviser, registered investment adviser, or a registered broker-dealer.