Wall Street’s fear gauge tumbles as traders bid up SpaceX shares
SpaceX ads appear on a digital billboard on a building in Times Square to celebrate the launch of SpaceX’s initial public offering (IPO) in New York on June 12, 2026.
Angela Weiss | Afp | Getty Images
Nothing like investors gobbling up $2 trillion in new stocks to stave off fear in the market.
Just 10 days ago tech was crashing, the stock market had its worst day since October 2025 and Cboe Volatility Index It was soaring, in part, because investors were worried about how the market could absorb the deluge of new markets. SpaceX stock Now, with the largest IPO in history digesting smoothly, investors are repurchasing stocks they previously sold, and Wall Street’s so-called “fear gauge” is back below its long-term average.
CBOE Volatility Index last month
Nasdaq 100 It rose 3% on Monday. S&P 500 The latest increase was 1.7 percent, approaching the record reached earlier this month. semiconductors It regained the lead, rising more than 4% from its all-time high. Arguing that speculators have run out of appetite, bears are now faced with SpaceX’s market value of almost $2.5 trillion. SpaceX shares last rose 13% on Monday.
“While the SPX Index rose a modest 0.7% last week, the VIX Index fell much more than expected, largely due to the unwinding of next 12-month protective hedges and downside convex positions,” Ed Tom, Cboe senior director of derivatives market intelligence, wrote in a note to clients Monday. he wrote.
The VIX traded below 16 at its lowest level on Monday; This ensured that the volatility that started on June 5 disappeared completely. VanEck Semiconductor ETF (SMH) It fell more than 10% from its record. While option flows on chip stocks still show significant hedging activity, trades around the VIX indicate a more bullish outlook for stocks.
There were more calls than puts on the VIX on Monday, according to data from ThinkOrSwim, and nearly as many sells as there were calls. More than $70 million of the $93 million in option premium traded was tied to puts, according to SpotGamma data. The most popular contract in terms of volume was the 16-strike put contract that expired Wednesday, when 46,000 contracts were traded.
Despite semiconductors hitting an all-time high in the SMH, flows continued to trend downward as they have for weeks. Perhaps the biggest impact this month has been investors paying for hedging, given that stock indexes now feature more semiconductors than ever before. While roughly 60% of the premiums on SMH were in puts, there were also notable put spread sellers. This includes the biggest trader of the day, who raised $5 million by selling two large put spreads expiring on July 17, then spent $2.7 million to long the 600/550 spread expiring the same day.
Options traders will have a lot to digest in SpaceX’s slate of options on Tuesday. Options on Tesla have long been a favorite among retail traders and consistently rank among the most active single stock derivatives.
