Rocket Lab stock surges on bullish options bets despite recent slump

Rocket Lab, a space technology company specialising in launch services and satellite development, has seen increased options activity this week. On Tuesday, traders focused on a bullish strategy tied to its stock (RKLB), which has fallen by 36% over the past two months. The move follows a period of volatility, with analysts now eyeing potential gains ahead of June's expiration dates.

Since its founding in 2006, the company has completed 63 successful launches of its small Electron rocket, though it does not operate medium-lift vehicles. The most notable trade on Tuesday was a bull call vertical spread using the June $70 and $80 calls. This strategy offers a maximum profit of $6.72 if RKLB closes above $80 by expiration. For the trade to succeed, the stock must stay within favourable boundaries until June.

Options data also reveals wider activity in April, with spreads exceeding 1,400 contracts on the $50 put and $85 call strikes. This pattern suggests traders may be employing a strangle or collar strategy, betting on either a sharp move or hedging existing positions. The market currently expects a 28.55% swing in RKLB's price by June, with a theoretical range of $55.32 to $76.82. Sellers of the strangle could collect around $1.95 if shares remain within this band.

Analysts remain divided on RKLB's outlook. The lowest consensus target sits at $68—just above Tuesday's close of $66.07—while the average estimate foresees a rise to $90.50, a 37% increase. One bullish forecast even predicts a 99.8% surge to $120 within 12 months.

Rocket Lab provides end-to-end space solutions, from launch services to spacecraft manufacturing. Its Electron rocket has maintained a strong track record, though the company has yet to expand into medium-lift vehicles. The recent options activity highlights mixed expectations for RKLB's near-term movement. With a June expiration approaching, traders are positioning for either a rebound or continued volatility. The stock's performance will depend on broader market conditions and Rocket Lab's operational progress in the coming months.