I told you this would happen…
SPCX announced quarterly financial data this week.
I sent an idea to trade it.
And the contracts surged 500%.
That’s not a typo.
Short-dated contracts can move exponentially compared to the underlying assets.
SPCX shares only dropped 12%. But since our put contracts expired in two days, my trade thesis was immensely valuable.
I theorized a drop was coming in less than 72 hours… talk about high stakes.
But that’s the beauty of options.
Our position can gain 500%, and our potential risk is still capped at the money we put in. Unlike short sellers, who could lose 500% or more depending on how much the stock moves against them.
Use options to boost your gains.
SPCX’s Spike and Crash
A handful of catalysts influenced SPCX’s price action this week…
- Musk pledged 1 SPCX share for every child in America in 2027.
- A quarterly earnings announcement.
- An incoming share lock-up expiration.
- A potential merger with TSLA.
The biggest catalyst was the earnings announcement. It was the company’s second since going public on June 12.
- Revenue: $14.58 billion (up 161% year-over-year compared to $5.6 billion last year, beating the $12.72 billion estimate)
- Adjusted EPS: $0.35 (beating analyst consensus estimates of $0.13 to $0.16)
The stock spiked initially on the strong numbers. But it barely held those gains by the end of the day, closing just under the open price.
I noticed the weakness early and sent an alert to traders:
“$155.00 PUT Oct 23, 2026”
Here’s my alert overlaid on the intraday price action:
Breakouts and Failed Breakouts
Some of the strongest price action comes from breakouts and failed-breakout setups.
Picture it: the stock is about to move into blue-sky territory. There are fewer bagholders to push the price lower.
A successful breakout can send a stock much higher. The euphoria of higher prices causes traders to trip over each other, buying shares in an attempt to capitalize on the strength.
A failed breakout shows that sellers are in control. Suddenly the crowd knows which way the sentiment points. They’ll sell to get out or open short positions to capitalize.
On October 21, SPCX attempted to make new highs after the earnings spike, but it fell below the breakout level. That was a hint that sellers were in control.
Pay attention to breakout levels on the market’s most active stocks.
That’s where we find some of the most dramatic price action. And some of the most valuable.
Stay Street Smart,
Jeff Zananiri
