Firefly Aerospace Soars 14% Intraday – What’s Fueling This Rocket’s Trajectory?

Summary
• Firefly Aerospace (FLY) surges 14.16% to $28.14, breaking above its 52-week low of $16
• Tradr 2X Long FLY Daily ETF (FLYT) rockets 29.77%, signaling leveraged demand
• Options chain shows 2025-12-26 calls at 28.5 and 29 strike prices dominate with 566% and 120% price change ratios

Firefly Aerospace’s intraday rally has ignited a frenzy in the options market, with leveraged ETFs and gamma-driven call options amplifying the move. The stock’s 14.16% surge—its largest single-day gain since 2023—has pushed it 16.5% above its 30-day moving average of $19.51, while the Tradr 2X Long FLY Daily ETF (FLYT) has become a proxy for aggressive bullish bets.

Options Volatility and Gamma Squeeze Ignite FLY’s Intraday Surge
The explosive move in FLY is driven by a gamma squeeze in the December 26 options chain, where 2025-12-26 calls at 28.5 and 29 strikes have seen price change ratios of 120% and 566%, respectively. High implied volatility ratios (104.42% and 104.61%) and leveraged gamma (0.115993 and 0.113869) indicate aggressive hedging by market makers, amplifying demand for the underlying stock. The 28.5 call’s 23.43% leverage ratio and 0.481270 delta suggest it’s a key catalyst for short-term momentum.

FLYT’s 29.77% Rally and FLY20251226C28.5 as Gamma-Driven Play
• Tradr 2X Long FLY Daily ETF (FLYT): 22.23 (+29.77%)
• RSI: 69.62 (overbought threshold near 70)
• MACD: -0.0727 (bullish histogram at 0.6279)
• Bollinger Bands: 23.87 (upper), 19.44 (middle), 15.01 (lower)
• 30D MA: 19.51 (below current price)

FLY’s 14.16% rally has created a short-term overbought condition, but the gamma squeeze in the December 26 options chain suggests momentum could extend. Aggressive bulls should target the 28.5 and 29 strike calls, which offer high leverage and gamma to capitalize on continued volatility. The 28.5 call (FLY20251226C28.5) has a 23.43% leverage ratio, 0.481270 delta, and 0.115993 gamma, making it ideal for a 5% upside scenario (projected price: $29.55, payoff: $1.05). The 29 call (FLY20251226C29) offers 28.11% leverage and 0.113869 gamma, with a projected $0.55 payoff under the same scenario. Both contracts have high turnover (12,787 and 16,611) and implied volatility (104.42% and 104.61%), ensuring liquidity.

FLY20251226C28.5: Code: FLY20251226C28.5, Strike: 28.5, Expiry: 2025-12-26, IV: 104.42% (high volatility), Leverage: 23.43% (high), Delta: 0.481270 (moderate), Theta: -0.239481 (high time decay), Gamma: 0.115993 (high sensitivity). This contract thrives on rapid price acceleration, with high gamma ensuring delta increases as FLY approaches 28.5.
FLY20251226C29: Code: FLY20251226C29, Strike: 29, Expiry: 2025-1226, IV: 104.61% (high volatility), Leverage: 28.11% (high), Delta: 0.425160 (moderate), Theta: -0.225995 (high time decay), Gamma: 0.113869 (high sensitivity). This call benefits from a broader price range, with high leverage amplifying returns if FLY breaks above 29.

If $29.55 breaks, FLY20251226C29 offers exponential upside; aggressive bulls may consider scaling into FLY20251226C28.5 as a core position.

Backtest Firefly Aerospace Stock Performance
The backtest of FLY's performance after a 14% intraday surge from 2022 to the present reveals a significant underperformance. The strategy's CAGR is -15.90%, with a total return of -49.32% and an excess return of -92.29%. This suggests that the strategy not only failed to capitalize on the surge but also incurred substantial losses relative to the benchmark.

FLY’s 28.14 Pivotal – Gamma Squeeze Intensifies as 29.5 Target Looms
FLY’s 14.16% surge is a gamma-driven anomaly, fueled by leveraged ETFs and high-IV options. The 28.5 and 29 strike calls are prime for short-term volatility, but traders must watch the 29.5 level as a critical inflection point. If FLY sustains above $28.14, the 29.5 target could trigger a 20%+ extension. Sector leader Lockheed Martin (LMT) rose 2.04% today, but FLY’s move is decoupled from aerospace fundamentals—this is a pure options-driven trade. Action: Buy FLY20251226C28.5 if FLY closes above $28.5; exit if 29.5 fails to hold.