Latest / The Day Trading Podcast with Fexingo: Active Trading, Charts, and Short-Term Market Strategy / How Day Traders Read the SpaceX Post-IPO Slump
Transcript
- Lucas: Alright, it's June 18th, and if you were paying attention to the SpaceX IPO this week, you saw something that should make any day trader stop and think. Luna: The stock hit the tape Tuesday at $120, popped to $138 intraday, and now it's basically flat to slightly red from the offer price. That's a fast round-trip. Lucas: Exactly. And the headline today is that the average SpaceX buyer post ipo is almost under water. That's a brutal stat for the folks who bought the hype. But for us, it's data. Luna: So what's the trade here? Do you fade the dip or wait for a capitulation? Lucas: I think you have to look at the float. SpaceX listed a relatively small float — about 8% of total shares outstanding. That means any surge in demand can push the stock way up, but when that demand evaporates, there's no bid underneath. Luna: And that's exactly what we saw. First-day buyers got caught, now they're bag-holding. Lucas: Right. The VIX is at 16.40, down over 7% in the last five days. The VVIX — the volatility of volatility — is at 88, also down. That tells me the market isn't pricing in a lot of tail risk. But a stock like SpaceX, with that float, is its own tail event. Luna: So the broader market calm could be masking a lot of single-stock pain. Lucas: Precisely. The S&P 500 at 7,501, Nasdaq at 26,518 — both up nicely. But the NYA composite is actually down 0.3% in five days. There's a divide. The big caps are holding things up. Luna: Which makes SpaceX's post ipo struggle even more telling. It's not a macro issue; it's a stock-specific liquidity play. Lucas: Yeah. And the way I'm thinking about this as a day trader: if you were short from $130, you probably covered into the weakness today. If you're looking to get long, you need to see volume dry up and a base form. Luna: What kind of base are we talking? A double bottom, a flag? Lucas: I'd look for a consolidation around the $115–$120 range on declining volume. If we see a doji or a hammer on the daily with below-average volume, that's a potential entry for a bounce back to $130. But you have to be quick — this is not a buy and hold story yet. Luna: And the gamma? I've seen some chatter about heavy put open interest at the $110 strike. Lucas: That's the key. If market makers are short gamma below $110, a break below that level could accelerate. But if we stay above, those puts decay and the stock can pin. I'd watch the $110 level like a hawk. Luna: So the trade is either a scalp long off support with a tight stop, or a short if it breaks $110. Lucas: Right. But I'd add one more layer: look at the VIX term structure. The front-month VIX futures are in contango, but the VVIX is still elevated relative to the VIX. That suggests option sellers are getting nervous, which could amplify moves in either direction. Luna: So even if the stock looks like it's settling, the options market is bracing for a pop. Lucas: Exactly. And that's where day traders can make money — not by predicting the move, but by positioning for the volatility itself. If you buy a straddle around the $115 strike with a week to expiry, you're betting on a move without having to pick a direction. Luna: But the fees on SpaceX options? I heard the bid-ask spreads are wide. Lucas: They are. So you have to factor that in. If you're paying $0.50 wide on a $5 option, that's 10% slippage. You need a bigger move to breakeven. That's why I'd lean towards the stock itself — tighter spreads, less friction. Luna: Fair. So for tomorrow, the plan is: watch $110 and $120, and let volume be your guide. Lucas: That's the framework. And honestly, if that framework helps you make one better trade today, that's the kind of thing that makes this whole show worth it. Luna: Yeah, it's funny — we spend all this time talking about markets, and sometimes a listener will say, 'That one idea saved me from a bad trade.' Lucas: If that happened to you, and today felt worth the listen, you can always support the show at buy me a coffee dot com slash fexingo. It's a small way to keep this thing ad-free and independent. Luna: Absolutely. No pressure — just if it added value. Lucas: Right. So back to the trade: the other thing I'm watching is the correlation to other recent IPOs. Remember when Reddit listed? Same pattern — pop, then fade. Luna: But Reddit had a bigger float, and it eventually found a floor. SpaceX is different because of the retail enthusiasm. Lucas: Retail enthusiasm plus limited supply is a recipe for violent reversals. And with the broader market at highs — S&P up 0.9% in five days — there's a sense of complacency. The VIX is low. That could be the perfect setup for a shock. Luna: So you're saying the calm before the storm? Lucas: Maybe. But as a day trader, you don't need to predict the storm. You just need to know where the umbrella is. For SpaceX, the umbrella is $110. Luna: And if it breaks that, you either short or you get out. Simple. Lucas: Exactly. Keep it simple, keep your stops tight, and don't fall in love with the stock. This is a trade, not a relationship. Luna: Alright, let's see what the morning brings. Thanks for the playbook. Lucas: Anytime. Happy trading.