SpaceX surge is creating a unique hedging opportunity

What goes up, must come down, even rockets, and particularly shares of rocket makers. But the once-in-a-generation surge of SpaceX shares is moving options prices too, allowing savvy investors to protect their portfolio at no costs. Space (SPCX) made history with its record-setting Nasdaq listing last Friday, pushing past a $2.5 trillion market cap. To nobody's surprise, Tuesday's launch of SPCX options also set new records for a first-day, post-IPO options volume. The inaugural session saw nearly 1.8 million contracts traded, and revealed a psychological split between ultra-bullish mania and some calculated institutional risk management. Let's break down two notable large block trades from day one, what they reveal about market sentiment, and how I would play the volatility. Appropriately enough for a rocket company, there were several moonshot bets (Mars bets?), for example, the July $325 Calls. The session's headline-grabbing trade was a massive, sweeping purchase of 7,000 July $325 Call contracts, executed at roughly $7.00 per contract. The Premium: Nearly half a million dollars, $490,000 plus commissions, spent. The Trade: This trader is aggressively betting that SPCX will skyrocket more than 50% from its current closing price of around $201 in just over a month. Our Take: We don't like this trade. …