SpaceX shares have entered a phase of unusual stability following a highly volatile debut, holding steady around the $140 mark for the past three weeks. After initially being the most volatile large-cap stock, the company’s implied volatility—a key indicator of expected price swings based on options pricing—has dropped significantly to 57 from over 120 before its earnings report. This sharp decline signals a major shift in the trading dynamics surrounding SpaceX, which is now less volatile than many other heavyweights in the market.

The current calm in SpaceX’s stock price is attributed partly to strong conviction from insiders and early investors who have held their shares even after the expiration of the company’s first equity lockup period. Additionally, SpaceX’s recent inclusion in major indices like the Nasdaq 100 and Russell 1000 has contributed to this stability by attracting a broader base of investors and smoothing out wild price fluctuations. Investment strategist Noel Smith of Convex Asset Management illustrated this change, describing the stock's volatility transformation as moving from a wild, untamed state to a more moderated, “urban” trading environment.

Options trading activity in SpaceX reveals a slight tilt toward bullish bets, despite a mild majority of open put contracts compared to calls. On a recent Thursday, about 335,000 call options were traded, with 168,000 being bought, nearly doubling the 75,000 put contracts purchased that day. The most actively traded options contracts have all been calls, signaling that some investors are betting on the stock rising further, particularly in contracts expiring soon that require the stock to appreciate around 3.5% within a matter of days.

Even with implied volatility down, some market observers caution investors to be wary when buying options outright. Though weaker than before, SpaceX’s current volatility remains somewhat elevated relative to the actual price movement realized in the stock. Noel Smith advises a conservative approach, suggesting that while the options may appear inexpensive compared to their previous highs, selling volatility rather than buying it might still be the smarter play at this stage, given the risk-reward balance.