SpaceX passed a key test Thursday. Sophisticated traders bet the bottom is in

SpaceX believers are trying a new approach in the options market.

Up until now, options flows were largely dominated by out-of-the-money call-buying, but the most popular directional trade on Thursday – albeit by a small margin – was selling puts. Of the $600 million in premium traded by midday, $316 million was in puts, with $166 million likely tied to sales of puts, SpotGamma data show. It’s a bullish view, but more about the stock stabilizing rather than staging a huge rally.

For the most part, volumes were split between puts and calls Thursday, but two of the biggest dollar-amount trades of the day were bullish combination trades that involved multimillion-dollar put sales alongside long call purchases – a structure known as a risk reversal that offers two points of bullish exposure: short a put and long a call.

Shortly after the opening bell, someone collected a net $7.7 million million selling $12 million of the 90-strike puts expiring in June next year then bought $4.3 million worth of the 220-strike calls expiring the same date. It’s effectively a bet that SpaceX won’t be down another 20% ten months from now, with an additional wager that the stock could double.

A smaller version of the same type of trade went off later in the afternoon when someone sold $3.5 million worth of 75-strike puts expiring in January 2028, then bought the same number of 185-strike calls of the same expiry. This time, the calls – worth $5 million – cost more than the puts brought in, meaning the trade was done at a debit.

While relentless bullish call-buying in SpaceX options since their debut has so far been a contrarian indicator, these two big, unmistakably bullish trades that involve selling options – a tactic favored by bigger-money players – suggest some sophisticated traders think the stock might be finding a bottom.

A quick look at the stock chart arguably adds technical evidence. SpaceX shares made a new low on Monday — a day before reporting earnings — but they have mostly traded close to $110 since July 23. Momentum to the downside has also slowed, with the 14-day relative strength index bottoming late last month and implied volatility falling to the lowest since June 30.

There’s also the fact shares are up on the day the first insider lock-up period is ending – an event many thought would lead to fresh selling of SpaceX stock.