SPCX Could Really Surge to $400? Gamma Squeeze Projections on the First Day of Options Listing

TL;DR

• ZeroHedge believes that the opening of SPCX options could trigger a gamma squeeze, potentially pushing the stock price to $400 in extreme scenarios.
• For now, we can only confirm that the volatility channel has been opened; $400 should not be regarded as market consensus.
• Related assets: SPCX, NVDA, MSFT, AAPL, SQQQ, SOXS.

ZeroHedge posted on social media stating that the opening of SPCX options could trigger a gamma squeeze, pushing SpaceX's stock price to $400. As an influential and aggressive financial media and trading account in the US stock market, it has long been adept at discussing macro liquidity, position structures, and extreme trading scenarios together. This time, it directly linked SPCX's option listing, a gamma squeeze, and the $400 stock price.

On its first trading day, SPCX surged over 25%, reaching a valuation exceeding $2 trillion. Overnight and after-hours quotes once approached $230, but this is not the official closing price, nor does it directly indicate that long-term capital is willing to accept this price. For ordinary readers, what matters more than the number of shares issued in the IPO is the limited tradable supply in the early stages of listing, the highly concentrated retail buying, and the upcoming launch of options.

This is where the $400 narrative truly warrants discussion: the figure itself is exaggerated, but it points to a market structure that requires caution. ZeroHedge believes that SPCX's low float, retail buying influx, and option listing combined could trigger an effective gamma squeeze. Based on an estimated fully diluted share count of approximately 13.1 billion shares, $400 would correspond to a market capitalization of about $5.2 trillion, bringing SpaceX very close to or even briefly surpassing Nvidia.

Why Can SPCX Fluctuate Like a Small-Cap Stock?

What makes SPCX special is not that the company is small, but that the number of tradable shares is limited in the early stage.

Low float refers to a limited proportion of shares available for free trading on the market. Even if a company has a very large total market cap, if only a small portion of its shares enters the secondary market after listing, the short-term price will be more sensitive to buying pressure. The pool is large, but the amount of water available for trading is limited.

This is also the key difference between SPCX and stocks like Apple, Microsoft, and Nvidia. Mature large-cap stocks have a huge number of outstanding shares, institutional holdings, index funds, market makers, and arbitrage capital. Moving the market cap of such stocks by hundreds of billions of dollars in a single day requires massive capital and broader consensus.

SPCX is in its early listing phase. SpaceX's official announcement confirmed the IPO share count and overallotment arrangements, but relative to the company's overall valuation, the initial public float remains low. The combination of low float and the Musk narrative can make the stock price behave more like a newly listed stock under concentrated capital pressure in the short term, rather than a mature mega-cap stock.

This also explains why the after-hours price is closely watched. After-hours trading has even lower liquidity and thinner order books. When capital chases the same stock, price elasticity is amplified. After-hours quotes approaching $230 at one point illustrate tight supply at that moment, but they do not directly indicate that long-term capital has accepted this valuation.

The first layer of ZeroHedge's $400 projection is based here: if a trillion-dollar company exhibits the short-term trading characteristics of a low-float small-cap stock, it could experience price jumps rarely seen in normal large-cap stocks.

Options Lend a Lever to Volatility

Options are significant because they can transform retail directional bets into passive hedging demands for market makers.

According to Reuters, trading for SPCX options was expected to begin as early as Tuesday, with Cboe anticipating the launch. The report cited market participants' expectations of potentially heavy early trading, high volatility, and expensive premiums.

For ordinary investors, this means SPCX is no longer just about buying the underlying stock. With options listing, the market will see a large number of cheaper, higher-leverage, and higher-risk call options.

What is most likely to fuel sentiment is out-of-the-money (OTM) call options, i.e., call contracts with a strike price higher than the current stock price. They are relatively cheap, more like lottery tickets. If the stock price rises fast enough, the potential returns can be very high. If it doesn't, the options can quickly become worthless. Retail investors often favor such contracts in hot stocks because they allow betting on larger upside gains with smaller capital.

The core mechanism of a gamma squeeze occurs right here.

When many investors buy call options, the counterparty selling the options is often a market maker. To manage risk, market makers typically need to buy some of the underlying stock as a hedge. As the stock price rises, the options become closer to being in the money, potentially forcing market makers to buy more of the stock. This creates a positive feedback loop: retail buys calls, market makers buy the stock, the stock price rises, market makers increase their hedge positions, and the rise attracts more buying.

In the case of SPCX, this mechanism has significant imaginative potential. It simultaneously possesses a low float, a compelling narrative, retail investor attention, an upcoming option listing window, and the already dramatic price volatility seen at the start of trading. ZeroHedge believes that if demand for OTM call options becomes sufficiently concentrated, the hedging purchases by market makers could push the stock price to $400 in a short period.

Boundaries must also be clearly defined. The $400 figure is the extreme upside scenario presented by ZeroHedge, not a baseline judgment independently deducible from current evidence. The imminent option launch only confirms that new leverage channels are appearing. To prove that a gamma squeeze is forming, one would need to see actual trading volumes on the first day and subsequent days, open interest for OTM calls, the strike price distribution, implied volatility levels, and the net gamma exposure of market makers.

What can be said now is that the mechanism has the conditions to start. What cannot be said is that the mechanism has definitely already started.

Vanda Data Supports Crowded Trade, But Not Widespread Frenzy

If one only looks at SPCX's price action, it's easy to conclude that retail investors are fully returning to risk assets. However, Vanda's fund flow data paints a narrower picture.

According to Vanda Track data cited by ZeroHedge, SPCX ranked first in net retail buying for the second consecutive trading day, with daily net purchases of approximately $93.8 million, accounting for about 73% of the total net retail buying in US single stocks that day. This data was not cross-verified through independent public channels this time, making it more suitable as a reference for observing retail crowding rather than a confirmed market fact from multiple sources.

Nevertheless, even this data supports part of ZeroHedge's assessment: SPCX is indeed experiencing an unusual concentration of capital. For a stock with a low float, concentrated buying alone is sufficient to significantly impact the price. If option trading further amplifies this directional betting, volatility could continue to expand.

However, this data also provides constraints. During the same period, while semiconductor stocks saw some modest capital inflows, there was no indication of an indiscriminate spread of risk appetite across the entire market. Short or inverse leveraged ETFs like SQQQ and SOXS continued to attract buying, suggesting that retail investors are not rushing headlong into all risk assets but are concentrating their attention on the single narrative of SPCX.

This distinction is very important.

If it were a widespread expansion of risk appetite, SPCX's rise could be understood as part of the overall market sentiment. If it is a single-stock crowd, the faster the rise, the more fragile the position structure becomes. The more concentrated the capital, the stronger the short-term upward momentum, but once expectations fail, option premiums fall, or after-hours liquidity worsens, the downward reversal can also be more violent.

This is also where the market cap comparison between SPCX and Nvidia is most easily misinterpreted. Nvidia's valuation is supported by AI chip revenue, data center demand, profit margins, and sustained validation of long-term growth expectations. SPCX's current short-term trading is more driven by its early-stage liquidity structure, the Musk narrative, and expectations of option leverage. Both can achieve high valuations, but the underpinning mechanisms are different.

Waiting for the Options Chain to Validate the $400 Thesis

The most important variable for SPCX going forward is not how many more people shout "$400" on social media, but what the options market actually looks like.

For ZeroHedge's extreme scenario to continue gaining traction, one would first need to see sufficiently concentrated trading volume and open interest in out-of-the-money call options. Just the option listing and active trading are not enough. The key lies in whether buying pressure is concentrated in call contracts above the current stock price and whether these contracts force market makers to continuously buy the underlying stock for hedging.

Implied volatility must also be monitored. When options first list, premiums can be expensive. For the buyer, even if the underlying stock continues to rise, a rapid drop in implied volatility could erode option profits. For the market structure, high premiums can discourage subsequent chasing or prompt early buyers to take profits.

The underlying stock's ability to absorb trades is equally important. Low float can amplify upward movements but also amplify downward ones. After-hours high prices proved liquidity is tight, but they do not prove that long-term capital is willing to continuously absorb supply. If option buying is weaker than anticipated, or if early-stage profit-takers decide to cash out en masse, SPCX could experience a negative feedback loop.

Finally, we come to the fundamental anchor. SpaceX's long-term story is not weak; Starlink, launch services, space infrastructure, and potential communication synergies are all reasons markets are willing to assign a high valuation. However, a move from a market cap around $3 trillion to over $5 trillion in the short term looks more like an extrapolation of trading structure than a revaluation validated by financial data.

In the coming days, what investors really need to watch are the strike price distribution on the options chain, open interest for out-of-the-money calls, changes in implied volatility, and whether the underlying stock can still attract real buy orders at elevated levels. Only if these data points simultaneously point in the same direction will ZeroHedge's $400 scenario transition from an extreme extrapolation to a risk that the market must price in.