The sole pure spaceflight play on the market is about to go interstellar, according to traders in the options market.
Virgin Galactic shares have already erased their sharp pullback from earlier this week, which came as a result of the company announcing that a test flight would be delayed, and many are betting that the sky may not even be the limit for this trade.
"[Virgin Galactic] normally trades around 100,000 contracts a day. It traded three times that amount today, and actually, we saw the most active activity in the December 28-strike calls, significantly out of the money. The buyers were paying about a dollar for those calls, betting that the stock could rise significantly by the week before Christmas," Michael Khouw, chief investment officer at Optimize Advisors, said Wednesday on CNBC's "Fast Money."
Nearly 16,000 of those call contracts traded during Wednesday's session, representing more than $1.6 million in premium changing hands. Buyers of those calls would need the stock to rise a whopping 27% over the next month in order to break even.
As Khouw pointed out, these traders are, "Not looking at the July highs, but possibly looking at the pre-pandemic highs to see those be profitable."
Virgin Galactic's all-time intraday high of $42.49 came on Feb. 20, which would represent an 88% surge above Wednesday's closing price.
Virgin Galactic shares were 4.5% higher in Thursday's session.