Key points
- SpaceX reports after the close Oct. 20
- SpaceX options price a move of about 7%
- How that compares with August's earnings reaction
SpaceX (SPCX) heads into its Oct. 20 earnings with options pricing a move of about 7% in either direction. For shareholders, that's about $10.55 a share. Across the company's about 13.6 billion shares, it represents about $143 billion in market value.
The stock closed at $147.96 on Oct. 19, valuing SpaceX at about $2 trillion. Third-quarter results arrive after the close on Oct. 20. The options calculation covers trading through Oct. 21, so it includes both the session before the report and the market's response afterward.
What the options price tells shareholders
The calculation starts with a straddle: a call and a put with the same strike price and expiration. Buying both gives a trader exposure to a large move in either direction, but the move must be big enough to cover the combined premium for the position to profit at expiration.
At the $148 strike, nearest the Oct. 19 closing price, the Oct. 21 call and put each had a bid-ask midpoint of $5.275, according to Robinhood market data. Their combined midpoint was $10.55 per share, about 7.1% of the stock price.
That combined premium provides a rough gauge of the move priced into options. It doesn't tell shareholders whether the move will be up or down, and it isn't a ceiling on how far the stock could move.
Is 7% a big move for SpaceX?
Before SpaceX's first earnings report as a public company in August, options were pricing a move of about 15% in either direction, according to ORATS data cited by Reuters. With SpaceX then worth about $1.5 trillion, that was close to $225 billion. ORATS uses its own method, so its 15% and our 7.1% straddle figure aren't a direct comparison.
SpaceX closed up 9.4% at $125.33 on Aug. 4, the day of the report. It then fell 13.6% the next day to $108.27, more than reversing the pre-earnings gain, by our calculations from daily closing prices.
The stock has had a wide range since its June debut. It hit $225.64 on June 16 and fell as low as $104.83 on Aug. 3. Even a 7% move is a lot of money at this size, because SpaceX is now worth about a third more than it was in August.
What else is on the calendar?
SpaceX is one of the first big reports in a heavy week. Netflix also reports after the close on Oct. 20, followed by Meta, Tesla, and IBM on Oct. 21. Our earnings calendar has the full list.
