Virgin Galactic Stock Soars After Commercial Launch Update

Options traders are blasting SPCE in response

Deputy Editor
Jan 13, 2023 at 10:08 AM
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Virgin Galactic Holdings Inc (NYSE:SPCE) signaled to Houston it's ready for takeoff. The space tourism name said its commercial launch is on track for the second quarter, with plans for its mothership to enter ground tests next week. 

Virgin Galactic stock is soaring after the update, last seen up 11.4% at $5.14 at last check. A ceiling persists at the $6 mark, but the equity still boasts a spectacular 42.1% year-to-date lead. Longer term, however, SPCE is down 50.8% in the last 12 months. 

Options traders are chiming in this morning, with the 30,000 calls and 7,054 puts exchanged so far accounting for 12 times the average intraday volume. The most popular position is the the weekly 1/13 5.50-strike call, where positions are being opened, indicating these traders expect to see more upside before today's close.

A broader look shows investors have been picking up calls at a much faster-than-usual pace of late. This is per SPCE's 10-day call/put volume ratio of 6.12 at the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), which stands higher than all other readings from the past year. 

Analysts are mostly bearish on Virgin Galactic stock, with six of eight in question calling SPCE a tepid "hold" or worse. Plus, the 49.64 million shares sold short make up 22.2% of the equity's available float, or nearly nine days' worth of pent-up buying power. 

 

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