LUVSouthwest Airlines Co.
Options Analysis Report•AIR TRANSPORTATION, SCHEDULED
Market Cap $19.2B|NYSE
● 2026-05-15$39.33
NEUTRAL
Analysis: 2026-05-14 EOD data
1Y +23.5%YTD -4.8%7D -4.8%
Options Vol
4,321
30D
Implied Move
±14.9%
IV Rank
47%
LUV Options Overview
IV is elevated. Conditions favor premium sellers.
REWARDS
RISK ANALYSIS
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Value
Is IV priced right?
3.9
ExpensiveCheap
Measures whether options are cheap, fair, or rich relative to historical and peer
IV
levels.Risk Checks3/9 checks passed
IV Rank
≤35%IV Rank 86.8% — elevated vs history
IV/HV Ratio
<1.05xIV/HV 1.16x — IV premium over HV
Sector Relative≤50%
Sector percentile 93% — above sector median
Term Structure
<1.1xFront/Back 1.15x — backwardation
Skew Normal
<1.25xPut/Call IV 1.16x — elevated
Absolute IV
<80%ATM IV 52.4% — normal range
Spread-Adjusted Value
<80%Effective IV 96.1% (ATM 52.4% + spread 21.9% + bias) — expensive
Execution Efficiency
<3.0%Total drag 29.44% (spread 21.86% + slippage 7.58%) — high friction
Vega Efficiency
≥5.0Vega efficiency 6.42 (vega 14.044 / spread 21.86%) — acceptable
Sentiment
Bullish or bearish?
5.8
BearishBullish
Analyzes
put/call ratios
, open interest skew
, and flow direction to determine market bias.Risk ChecksBearish - Strong signal (Conviction: -11%, Raw: -8%)
Flow Direction
|net sentiment| ≥25%Conviction-weighted: -11% (bearish) — Raw: -8%
OI Skew Magnitude
≥15%|OI skew| 24.5% — call-heavy
Volume-OI Alignment
Same sign, |vol skew| ≥10%Vol skew +22.1%, OI skew +24.5% — aligned
Conviction Quality
≥2/3 conditions0-DTE 25%, far-OTM 15%, avg DTE 30
OI Momentum
|change| ≥3%OI change +0.0% (5d) — stable
Smart Money Flow
|weighted flow| ≥20%ITM: -41%, ATM: -29%, OTM: +4% — strong bearish (ITM/ATM aligned)
Sector Relative≤40% or ≥60%
Sector P/C percentile 39% — bullish vs sector
Activity
Unusual activity?
2.6
QuietActive
Detects volume surges,
block trades
, and unusual options activity that may signal moves.Risk Checks1/9 checks passed
Volume Surge
≥1.5xVolume 0.2x avg — normal
Turnover Rate
≥15%Vol/OI 1.2% — normal turnover
Strike Concentration
≥60%Top 3 strikes = 50% — dispersed
Multi-Day Persistence
≥2 days1 day(s) elevated — may be one-day event
OI Build
≥5%OI change +6.1% (5d) — building
Sector Relative≥60%
Sector activity percentile 15% — quiet vs sector
Trade Quality
≥30%Large trade volume 0% — mostly retail
Execution Urgency
≥60%Aggressive execution 21% — patient
Flow Conviction
≥30Conviction -11 (bearish) — mixed
Liquidity
Can I trade efficiently?
3.4
IlliquidLiquid
Evaluates
bid-ask spreads
, volume depth, and open interest for trade execution quality.Risk Checks3/8 checks passed
Tradeable Spread
≤5.0%Spread 21.9% — wide
Adequate OI
≥10,000OI 372,616 — deep
Active Volume
≥500Volume 4,321/day — adequate
Reasonable Cost
≤$0.50$1.09 to cross — expensive
Strike Coverage
≥5 strikes0 liquid strikes — limited options
Sector Relative≤40%
Sector spread percentile 93% — much wider than sector
Order Book Depth
≥100 contractsDepth 323.1 contracts (bid:197.7 ask:125.4) — adequate
Execution Quality
<1.0%Avg slippage 7.58% — poor
Timing
Is now a good time?
7.4
RiskyFavorable
Considers earnings proximity,
time decay
, and event calendar for optimal entry timing.Risk Checks6/9 checks passed
Term Structure Clarity
|slope| ≥5%Slope +15.4% — backwardation
IV Percentile Clarity
<30 or >70IV percentile 87% — seller opportunity
Event Detection
≥10pts kinkIV kink 6.5pts — no clear event
Theta/Vega Clarity
<0.5 or >2.0θ/ν ratio 1221.21 — favors income trades
Expiration Distribution
≥3 expirations5 liquid expirations — flexible
Event Risk
≥60% (safe)safe window: No events detected
Spread Momentum
<1.2 ratioSpread ratio 1.00x — stable
Flow Momentum
≥25% strength + ≥50% consistencyFlow -11% @ 56% consistency — unclear
Smart Money Timing
≥40 composite scoreScore 30 (ITM 20% + inst 0%) — retail dominated
Directional Strategy Fit
Option Buyers
Long Calls5.0
bullishIV expensive, mixed flow
Long Puts4.4
bearishIV expensive, mixed flow
Premium Sellers
Cash-Secured Put5.7
bullishIV rich premium, mixed flow
Covered Call5.1
bearishIV rich premium, mixed flow
For educational purposes only. Not investment advice.