SpaceX's elevated volatility will persist despite index inclusion because index holders will hedge with options and high volatility attracts call buyers seeking exposure to bull market winners.
Too little corroboration in the last 3 days to call a trend (1 article). Watching for it to gain traction.
The counterargument holds that index inclusion will not tame SpaceX's volatility because index holders will turn to the options market to hedge their forced exposure, sustaining elevated demand for puts. Simultaneously, the stock's status as a high-momentum bull market winner attracts call buyers seeking leveraged upside, keeping implied volatility structurally bid from both directions.
When a high-profile stock enters a major index, it often develops a self-reinforcing options ecosystem where hedging demand and speculative interest compound each other, meaning elevated implied volatility can persist well beyond the initial inclusion period regardless of the underlying stock's fundamental stability.
"The counterpoint is that those index-holders may use SpaceX options to hedge its inclusion, which would keep demand elevated for puts. Add in the fact that high volatility has been a key characteristic of many of the bull market's biggest winners, keeping calls in strong demand despite expensive premiums, and there's a case to be made SpaceX volatility could stay."