Options for SpaceX commenced active trading on Tuesday, offering investors another avenue to wager on the future price movements of the newly public shares of Elon Musk's rocket company.
Options grant investors the right to buy or sell an asset at a predetermined price within a set timeframe, commonly used for hedging risk or speculating on price swings.
Data from Trade Alert indicates that approximately 115,000 option contracts changed hands in the first 10 minutes after trading began, with a ratio of about 1.7 call options traded for every put option.
Call options give the buyer the right to purchase a stock at a fixed price before a specific date, while put options grant the buyer the right to sell a stock at a set price.
SpaceX options ranked as the third most traded single-stock option contract by volume, trailing only Nvidia and Tesla.
Shares of SpaceX climbed on Tuesday, gaining more than 8%, which propelled its market capitalization past that of Amazon to become the world's fifth most valuable company.
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