SpaceX surges 23% in two days after restrictions lifted, options trading hits record, short covering may further push up stock price

SpaceX shares saw sharp gains for a second consecutive trading day, coming within reach of its $135 IPO issue price.On Friday, the company's share price surged about 16%, bringing the two-day cumulative gain to approximately 23%, with the market capitalization increasing by over $327 billion during this period.

This strong rebound occurred after the first wave of large-scale lock-up shares were released. On Thursday, around 911.5 million SpaceX shares became tradable, increasing the number of circulating shares from roughly 639 million to 1.55 billion. Previously, the market worried that concentrated sell-offs by early investors would create significant downward pressure on the stock, but the result was quite the opposite.

The swift rebound of SpaceX's share price has also put tremendous pressure on investors who had bet on a decline.Currently, more than 250 million SpaceX shares remain shorted, accounting for about 16% of tradable stocks. If the share price rises sharply, forced short covering could further boost the stock price,

Meanwhile, SpaceX’s options market has also become exceptionally active.As of 1:50 p.m. New York time on Friday, SpaceX options trading volume reached 2.24 million contracts, with call options accounting for 1.3 million contracts — a record high — indicating a renewed influx of capital.

However, a fast share price rebound does not mean concerns about SpaceX’s lofty valuation have disappeared. As the supply shock from the unlock fades, investors still face a core question: Will the market continue to pay such a high valuation before SpaceX fully realizes the potential of its AI, satellite internet, and space business?

Unlock Triggers Price Surge, SpaceX Adds $327 Billion in Two Days

SpaceX previously underwent a sharp correction.

Shortly after its IPO, the share price quickly climbed to a record high, only to shed over $1 trillion in market capitalization. On Wednesday, after SpaceX released its first public earnings report since listing, shares fell 14% in a single day, primarily due to higher-than-expected spending on artificial intelligence.

But in just two trading days, market sentiment reversed sharply.

On Friday, SpaceX shares rose around 16%, with a two-day cumulative gain of about 23%, bringing the share price back within reach of the $135 IPO issue price. As of Friday’s close, SpaceX shares were at $128.18.

This rebound is particularly noteworthy because it happened after the much-feared lock-up expiry event.

On Thursday, approximately 911.5 million previously locked-up shares hit the market, more than doubling the number of tradable SpaceX shares from 639 million to 1.55 billion.

According to previous market concerns, a large influx of new shares could create heavy potential sell pressure. But in reality, the expiry has become the starting point for the stock’s rebound.

Shorts Hit Hard, Over 250 Million Shares Still Shorted

The swift rebound of SpaceX shares has also put heavy pressure on investors who bet against the stock.

According to S3 Partners, prior to this rally, shorts had amassed over $9 billion in mark-to-market gains.

As per the latest data, more than 250 million SpaceX shares remain shorted, accounting for around 16% of tradable shares. This proportion was even higher earlier.

Before the unlock of 911.5 million shares, the short interest in SpaceX exceeded 36% of tradable shares. With the influx of new shares, the short interest ratio dropped quickly.

Matt Maley, Chief Market Strategist at Miller Tabak, noted that around the unlock event, some bearish positions likely needed to be closed out.

This suggests that the latest rally was fueled not just by new buyers but also by significant short covering.

For popular stocks with high short interest, if the price doesn’t fall as shorts expected but instead rises quickly, forced short covering can further propel the stock upward, creating a “rally—cover—further rally” positive feedback loop.

Record Options Volume, Bullish Money Chasing the Rally

Beyond the spot market, SpaceX’s options market also saw a clear speculative frenzy.

According to exchange data compiled by Bloomberg, as of 1:50 p.m. New York time on Friday, SpaceX options volume had reached 2.24 million contracts.

Of these, call option volume hit 1.3 million, setting a new record; put option volume stood at about 943,000 contracts.

Individual contract trading was especially active. Call options expiring August 14, 2026, with a $320 strike price, saw 64,857 contracts traded, while open interest stood at only 17,702 as of Thursday.

Additionally, put options expiring August 7, 2026, with a $125 strike price, saw 27,866 contracts traded, versus an open interest of 6,314; calls expiring August 7, 2026, with a $120 strike, saw 20,747 traded, versus open interest of 26,724.

The surge in options trading, especially the record-high call option volume, reflects that some investors are betting on SpaceX’s share price continuing to rise.

At the same time, SpaceX’s three-month implied volatility dropped 1.55 percentage points to 77.37%, while the three-month 90/110 skew fell 1.29 percentage points to -0.15 percentage points.

This indicates that as the share price rebounds quickly, the options market’s pricing of tail risk for further declines has also eased.

Wall Street Still Bullish, But Valuation Disputes Remain

Though the unlock event had been seen as a major risk for SpaceX shares, the expiry of lock-up does not mean early investors have to sell immediately.

This is a key reason why the current market reaction differs sharply from earlier bearish expectations.

Meanwhile, Wall Street overall remains highly optimistic on SpaceX.

On Friday, Argus Research upgraded SpaceX from “Hold” to “Buy,” citing the potential for “rapid returns” from the company’s AI infrastructure investments.

According to Bloomberg data, nearly 80% of analysts covering SpaceX now rate it as a “Buy,” with an average price target of about $221.

However, despite the optimism, SpaceX’s valuation remains an unresolved issue for the market.

Matt Maley, Chief Market Strategist at Miller Tabak, pointed out that after the trading effects of the unlock are digested, investors still must decide whether to buy into a company at such a high valuation that may take years to realize its full potential.

In other words, the current rally mainly shows a renewed risk appetite among investors, but doesn’t mean SpaceX’s long-term valuation issues are resolved.

AI and Space Businesses: Deciding Whether the Rally Can Continue

The current valuation logic for SpaceX is no longer confined to traditional space operations.

The company is simultaneously making big bets on rocket launches, satellite internet, and AI infrastructure. Among these, AI investments have drawn particular attention from capital markets, but have also accounted for the recent above-expected spending in earnings.

Therefore, whether SpaceX’s share price can continue to break higher in the future depends not only on the growth of existing businesses like Starlink, but also on whether the market sees tangible returns from AI infrastructure investments.

At present, the unlock event — which could have sparked selling — has been quickly absorbed by the market, with short covering and surging call options further amplifying the upward momentum.

But as short-term trading factors fade, the market will ultimately return to a basic question: Can SpaceX deliver on the high expectations baked into its current market value through business growth over the next several years?

If the answer is yes, $135 may just be the starting point for the next rally; if the AI and space business fall short of expectations, the current rapid rally driven by short covering and options could itself become another source of volatility.