Wall Street launches loss‑protecting structured products for SpaceX shares

Wall Street is swiftly creating a suite of structured investment products linked to SpaceX stock after the company's shares fell more than 40% from their peak following the June IPO. At least five financial institutions, including Morgan Stanley and Marex Group Ltd., are preparing notes that can limit investor losses up to 50% while capping potential gains. The offerings span options, leveraged ETFs and other debt‑derivative hybrids aimed at high‑net‑worth individuals, family offices and discretionary managers. Aaron Brachman, CEO of Washington Wealth Group, says growing liquidity in options on newly listed stocks makes banks more comfortable pricing such risk.

These structured notes combine fixed‑income features with derivatives, providing higher‑than‑bond payments but restricting upside. Critics caution that the products expose investors to significant downside if the single‑stock position continues to be volatile, despite the loss‑protection features.