--- title: "SpaceX's \"Perfect Storm\" Arrives: Three Key Hedging Strategies" type: "News" locale: "en" url: "https://longbridge.com/en/news/288872604.md" description: "SpaceX's potential IPO could trigger a migration of tens of billions of dollars in capital and amplify volatility in the U.S. stock market. BNP Paribas suggests monitoring the risk of a pullback in the semiconductor sector by hedging with SMH put options; positioning for rising market volatility using VIX and SPY options; and maintaining a bullish view on the long-term volatility value of Tesla. The core logic is to capture tail risks and structural opportunities arising from liquidity shocks" datetime: "2026-06-05T13:45:29.000Z" locales: - [zh-CN](https://longbridge.com/zh-CN/news/288872604.md) - [en](https://longbridge.com/en/news/288872604.md) - [zh-HK](https://longbridge.com/zh-HK/news/288872604.md) --- # SpaceX's "Perfect Storm" Arrives: Three Key Hedging Strategies The upcoming IPO of SpaceX is not just a financing feast, but also a systemic stress test for global stock market liquidity. It is reported that SpaceX plans to raise up to $86 billion in this IPO, with a valuation of $1.78 trillion, making it the largest IPO in global history. In its latest research report, BNP Paribas warned that **the highly aligned convergence of multiple capital flows surrounding this listing could trigger severe volatility in the U.S. stock market in the coming weeks.** BNP Paribas estimates that **passive funds will generate approximately $30 billion in buying demand for SpaceX, while FOMO (Fear Of Missing Out) sentiment among retail investors could drive even larger-scale capital rotation.** The bank pointed out that this buying demand will primarily be funded by selling other stocks, compounding over $100 billion in selling pressure on U.S. stocks at the end of the quarter, making the market's tail risks impossible to ignore. ## Passive Funds: $30 Billion in Buying, at the Cost of Selling Other Stocks Adjustments to index rules are one of the core variables in the liquidity landscape of this IPO. Nasdaq has removed the free-float proportion limit for large-cap stocks, no longer requiring a 10% free-float threshold, and instead applies a 3x multiplier to calculate the weight for large-cap stocks with low float (see Nasdaq-100 Index Methodology). This means that assuming SpaceX's free-float market capitalization is $75 billion, it could be included in the Nasdaq-100 Index 15 days after listing, but the market capitalization used for weight calculation would be $225 billion. BNP Paribas' cash trading team estimates that passive funds will collectively buy approximately $30 billion worth of SpaceX stock, with about half of this completed within three weeks of the listing. From a timeline perspective, inclusion in the Nasdaq-100 will bring about $8 billion in buying during the first month of listing. Inclusion in the S&P 500 is expected to trigger about six months after listing, bringing an additional $13 billion in buying demand. BNP Paribas noted that the timing of S&P 500 inclusion may coincide with subsequent secondary offerings or the unlocking of lock-up periods, further expanding the free-float size and triggering more passive buying. Passive fund flows also exhibit a significant "short gamma" effect—if SpaceX's stock price doubles, the scale of passive buying doubles; if the price halves, the scale of passive buying is halved as well. This mechanism will significantly amplify the market impact of stock price volatility. ## Retail Capital: FOMO Sentiment and Huge Unrealized Gains Constitute the Biggest Variable BNP Paribas believes that the behavior of retail investors may have a more critical impact on the market than passive funds regarding the SpaceX IPO. Since the beginning of this year, retail investors have continued to display a FOMO-style trading pattern of chasing rallies, and this herd effect often amplifies price volatility and thickens tail risks. Data shows that in the past month, retail investors have net bought more than $20 billion across four U.S. stocks: NVIDIA, Micron, SanDisk, and Tesla. Meanwhile, the assets under management (AUM) of 3x long semiconductor ETFs have exceeded $25 billion, corresponding to a market exposure of over $75 billion, comparable to SpaceX's expected free-float market capitalization. Since the lows in March, the prices of these products have risen by more than 600%, leaving retail investors holding substantial unrealized gains. If retail investors convert these unrealized gains into subscription funds for SpaceX, it will produce two effects: On one hand, it could significantly boost the tail returns of the IPO; on the other hand, withdrawing capital from leveraged products will generate multiplied selling pressure—retail investors selling $1 billion worth of 3x leveraged products will trigger $3 billion in sales of the underlying assets, thereby depressing related stock prices, triggering more mechanical de-risking, and forming a negative feedback loop. ## Multiple Selling Pressures Converge: Market Faces "Perfect Storm" Risk BNP Paribas warns that while various capital flows related to SpaceX might be digestible individually, the problem lies in their highly consistent direction and mutual superposition. The bank estimates that passive funds and retail investors combined may sell approximately $50 billion worth of other stocks to raise funds for subscribing to SpaceX; if the IPO performs strongly, this figure could rise further. At the same time, multiple additional pressures are converging. Regarding corporate buybacks, S&P 500 component companies will gradually enter quiet periods starting mid-June, with daily average buyback volumes plummeting from a high of $6 billion to $1 billion by mid-July. Regarding quarter-end effects, BNP Paribas estimates that given the strong performance of U.S. stocks so far this year, there could be over $100 billion in selling flow of U.S. stocks at the end of the second quarter, coinciding closely with the timing of passive selling related to SpaceX. Furthermore, leveraged ETFs have approximately $9 billion in short gamma exposure, mainly concentrated in the Nasdaq-100 and semiconductor sectors; if the market experiences an extreme decline (a 15% drop within one month, with realized volatility reaching 36%), the selling scale from CTAs and volatility target funds could exceed $100 billion. ## Historical Precedents: Extreme Volatility is the Norm for IPOs Historical data indicates that severe volatility following large IPOs is not an exception, but the rule. Visa listed in 2008, then the largest IPO in the U.S., with its stock price rising 50% on the first day and exceeding the issue price by 100% two months later, but falling about 50% from its peak a year later. Rivian listed in late 2021, with its stock price doubling within two weeks of listing and substantial net buying by retail investors; however, as the stock price fell below the issue price in January 2022, retail investors quickly turned to net selling. Meta (then Facebook) listed in 2012, with its first-day opening delayed due to technical glitches. It rose 16% intraday, then fell 40% from its peak within two weeks, eventually hitting a bottom 60% lower than its higher point in September, before rebounding 200% within the following year. BNP Paribas pointed out that the uniqueness of SpaceX lies in its scale—the listing market capitalization is expected to approach $2 trillion, far exceeding any IPO in history. Nevertheless, the initial free-float market capitalization of $75 billion is a more reasonable reference for measuring liquidity and volatility, and this scale is not fundamentally different from large IPOs in history that triggered severe volatility. ## Trading Strategies: Hedging Tail Risks Given the aforementioned liquidity risks, BNP Paribas proposes three types of hedging transaction ideas. **Semiconductor Put Option Ratio Strategy**: The semiconductor sector may become the main source for retail investors to raise funds to subscribe to SpaceX. Coupled with the short gamma risk accumulated from the cumulative rise of over 600% in 3x leveraged products since the March lows, the downside tail of SMH has high payout potential. The reference strategy is the SMH September 2026 590/500 put option ratio (1x3, buying the out-of-the-money side), with a reference price of 10.5, Delta of approximately -13, and a underlying reference price of 639.29. **Index Protection Strategy**: Selling pressure on stocks in the coming month will push up market volatility, while current VIX and VVIX levels are at yearly lows. Reference strategies include: VIX July 2026 $40 call options, with a reference price of 0.56, Delta of approximately 13, and spot VIX reference of 16.01; and SPY July 10, 2026 $725 put options, with a reference price of 5.1, Delta of approximately -23, and underlying reference of 754.24. **Tesla Long-Term Volatility Strategy**: Tesla was the non-semiconductor asset with the highest net buying by retail investors in the past month, showing significant position overlap with SpaceX, making it unsuitable to short its volatility. Currently, Tesla's term structure is flat, with 1-year at-the-money implied volatility near a five-year low. 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