SpaceX Options Strategy Ahead of Starship Flight 14: Jeff Kilburg’s Bullish Risk Reversal

SpaceX is gearing up for launch, and I intend to use options to capture additional upside in this literal rocket‑ship company. The stock has reclaimed its opening IPO price of roughly $150, yet remains about 35% below the $225 peak reached after the June 12 IPO frenzy. The actual IPO price was $135, and August trading pushed the share down to a washout level of $104.83 — a clear sign of post‑IPO price discovery. Throughout the summer, investors viewed SPCX primarily as a lock‑up and capital‑expenditure issue, but the narrative has shifted in the last 48 hours to reflect the firm’s true identity: the sole operator that launches satellites, runs the Starlink constellation, and stacks AI compute on the same balance sheet.

Oppenheimer’s Tim Horan raised his price target to $280 from $250 and maintained a Buy rating, highlighting the vertically integrated AI stack that includes data, Nvidia GPUs, Grok and the Cursor deal. Bernstein projects AI revenue to surge to $115 billion by 2027 from $24.6 billion in 2026 — a classic hockey‑stick trajectory. J.P. Morgan also lifted its target to $240, while Deutsche Bank and Bank of America keep Buy ratings. The consensus of Wall Street analysts (acknowledging its occasional inaccuracy) still forecasts roughly 50% upside from current levels.

Second‑quarter results already illustrated the mix: revenue rose 92% year‑over‑year to $7.81 billion, a beat; Starlink now serves 12 million subscribers; and name‑plate compute capacity stands at 1.4 GW. Although the space segment continues to burn cash on Starship development — the “vig” investors pay for this high‑flyer — Flight 13 met its objectives after the quarter ended. SpaceX has informed the FCC that it aims for September 15 for Starship Flight 14, the first fully orbital attempt designed to deploy V3 Starlink satellites at a cadence that the earlier Falcon rocket cannot match. A single successful Starship payload would provide the capacity story investors crave, and the launch date falls within the September regular options expiration cycle.

I attribute the stock’s relative cheapness to two upcoming supply events: the September 9 share unlock and the lingering memory of the summer’s post‑IPO air pocket. These factors have driven implied volatility down from triple‑digit IPO levels to a 52% 30‑day reading, with IV rank near the bottom of its post‑listing range, while realized volatility remains higher. In plain terms, the market is paying investors to absorb the unlock that everyone has already anticipated.

The defined‑risk expression of the expected rebound is a bullish risk reversal expiring September 18. The strategy sells the expensive put tied to the unlock and buys a call that should benefit if Flight 14 and the anticipated AI re‑rating materialize as the targets suggest.

The trade: sell the 9/18/2026 $140 put for $2.15 and buy the 9/18/2026 $160 call for $2.50, resulting in a net debit of $0.35, or $35 per one‑lot. At the time the trade was entered, SPCX traded around $149. The short put obligates the holder to purchase SPCX at $140 if assigned — roughly 10% below the current price but still above the $135 IPO print — a level Bernstein models toward $248 and Oppenheimer toward $280. The long $160 call sits about 7% out‑of‑the‑money and pays off if the stock pushes through the mid‑$160s ahead of the September 15 flight. Upside above $160.35 is uncapped, while the maximum loss on the call side is limited to the $0.35 debit if the stock never rises above that level. Assignment risk arises only if SPCX falls below $140 at expiration, a date that captures both the September 9 unlock and Flight 14.

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