LUVSouthwest Airlines Co.
LUV Options Overview
IV is elevated. Conditions favor premium sellers.
REWARDS
RISK ANALYSIS
LUV Gamma Walls
Value
Is IV priced right?
Measures whether options are cheap, fair, or rich relative to historical and peer
IV Rank 78.0% — elevated vs history
IV/HV 1.55x — IV premium over HV
Sector percentile 90% — above sector median
Front/Back 0.88x — contango
Put/Call IV 1.16x — elevated
ATM IV 42.6% — normal range
Effective IV 68.4% (ATM 42.6% + spread 12.9% + bias) — fair
Total drag 18.80% (spread 12.89% + slippage 5.91%) — high friction
Vega efficiency 2.41 (vega 3.109 / spread 12.89%) — spread drag
Sentiment
Bullish or bearish?
Analyzes
Conviction-weighted: -16% (bearish) — Raw: -6%
|OI skew| 17.2% — call-heavy
Vol skew -29.9%, OI skew +17.2% — divergent (opposite)
0-DTE 11%, far-OTM 15%, avg DTE 30
OI change +0.0% (5d) — stable
ITM: -7%, ATM: -22%, OTM: -2% — bearish (ITM/ATM aligned)
Sector P/C percentile 78% — very bearish vs sector
Activity
Unusual activity?
Detects volume surges,
Volume 0.5x avg — normal
Vol/OI 2.2% — normal turnover
1 day(s) elevated — may be one-day event
OI change -2.4% (5d) — unwinding
Sector activity percentile 39% — below sector avg
Large trade volume 31% — institutional presence
Aggressive execution 26% — patient
Conviction -16 (bearish) — mixed
Liquidity
Can I trade efficiently?
Evaluates
Spread 12.9% — wide
OI 248,103 — deep
Volume 5,432/day — active
$0.64 to cross — expensive
0 liquid strikes — limited options
Sector spread percentile 91% — much wider than sector
Depth 394.1 contracts (bid:178.8 ask:215.3) — adequate
Avg slippage 5.91% — poor
Timing
Is now a good time?
Considers earnings proximity,
Slope -11.7% — contango
IV percentile 78% — seller opportunity
IV kink -2.4pts — no clear event
θ/ν ratio 77.72 — favors income trades
3 liquid expirations — flexible
caution advised: FOMC in 5d; CPI in 0d (HIGH)
Spread ratio 1.00x — stable
Flow -16% @ 58% consistency — unclear
Score 61 (ITM 20% + inst 31%) — HIGH institutional
Directional Strategy Fit
For educational purposes only. Not investment advice.
The Options Desk tracks the move options price into every US earnings report the week of Sep 7, next to how much each stock has actually moved on its past prints — plus the SPY, QQQ and IWM expected ranges and the gamma walls that box them in.