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LUVSouthwest Airlines Co.

Options Analysis Report•AIR TRANSPORTATION, SCHEDULED
Market Cap $19.4B|NYSE
● 2026-08-31$39.64
NEUTRAL
Analysis: 2026-08-28 EOD data
1Y +22.9%YTD -4.0%7D -2.6%
9,889
30D
±10.4%
10%

LUV Options Overview

Mixed signals. Conditions favor premium sellers.

REWARDS

RISK ANALYSIS

5.4VALUESENTIMENTACTIVITYLIQUIDITYTIMING

Snowflake Analysis

Balanced conditions with no clear edge

Learn
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LUV Gamma Walls

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Value

Is IV priced right?

5.6
ExpensiveCheap

Measures whether options are cheap, fair, or rich relative to historical and peer

levels.

Risk Checks4/9 checks passed
≤35%

IV Rank 69.9% — elevated vs history

<1.05x

IV/HV 0.95x — IV ≤ HV

Sector Relative≤50%

Sector percentile 78% — above sector median

<1.1x

Front/Back 0.87x — contango

<1.25x

Put/Call IV 1.16x — elevated

<80%

ATM IV 35.0% — normal range

<80%

Effective IV 84.9% (ATM 35.0% + spread 24.9% + bias) — expensive

<3.0%

Total drag 39.38% (spread 24.93% + slippage 14.45%) — high friction

≥5.0

Vega efficiency 0.82 (vega 2.055 / spread 24.93%) — spread drag

Sentiment

Bullish or bearish?

5.5
BearishBullish

Analyzes

,
, and flow direction to determine market bias.

Risk ChecksBearish - Moderate signal (Conviction: -20%, Raw: -21%)
|net sentiment| ≥25%

Conviction-weighted: -20% (bearish) — Raw: -21%

≥15%

|OI skew| 15.7% — call-heavy

Same sign, |vol skew| ≥10%

Vol skew +19.4%, OI skew +15.7% — aligned

≥2/3 conditions

0-DTE 0%, far-OTM 15%, avg DTE 30

|change| ≥3%

OI change +0.0% (5d) — stable

|weighted flow| ≥20%

ITM: -42%, ATM: +43%, OTM: -56% — neutral (ITM/ATM divergent)

Sector Relative≤40% or ≥60%

Sector P/C percentile 52% — neutral vs sector

Activity

Unusual activity?

4.6
QuietActive

Detects volume surges,

, and unusual options activity that may signal moves.

Risk Checks2/8 checks passed
≥1.5x

Volume 1.0x avg — normal

≥15%

Vol/OI 4.1% — normal turnover

≥2 days

1 day(s) elevated — may be one-day event

≥5%

OI change +4.5% (5d) — building

Sector Relative≥60%

Sector activity percentile 63% — active vs sector

≥30%

Large trade volume 33% — institutional presence

≥60%

Aggressive execution 28% — patient

≥30

Conviction -20 (bearish) — mixed

Liquidity

Can I trade efficiently?

3.5
IlliquidLiquid

Evaluates

, volume depth, and open interest for trade execution quality.

Risk Checks3/8 checks passed
≤5.0%

Spread 24.9% — wide

≥10,000

OI 242,522 — deep

≥500

Volume 9,889/day — active

≤$0.50

$1.25 to cross — expensive

≥5 strikes

0 liquid strikes — limited options

Sector Relative≤40%

Sector spread percentile 79% — wider than sector

≥100 contracts

Depth 558.8 contracts (bid:219.0 ask:339.8) — deep

<1.0%

Avg slippage 14.45% — poor

Timing

Is now a good time?

7.6
RiskyFavorable

Considers earnings proximity,

, and event calendar for optimal entry timing.

Risk Checks6/9 checks passed
|slope| ≥5%

Slope -13.2% — contango

<30 or >70

IV percentile 70% — neutral

≥10pts kink

IV kink -2.6pts — no clear event

<0.5 or >2.0

θ/ν ratio 53.39 — favors income trades

≥3 expirations

4 liquid expirations — flexible

≥60% (safe)

safe window: No events detected

<1.2 ratio

Spread ratio 1.00x — stable

≥25% strength + ≥50% consistency

Flow -20% @ 60% consistency — unclear

≥40 composite score

Score 63 (ITM 20% + inst 33%) — HIGH institutional

Directional Strategy Fit

Option Buyers
Long Calls5.6
bullishIV fair, mixed flow
Long Puts5.2
bearishIV fair, mixed flow
Premium Sellers
Cash-Secured Put5.1
bullishIV fair, mixed flow
Covered Call4.7
bearishIV fair, mixed flow

For educational purposes only. Not investment advice.

The Options Desk tracks the move options price into every US earnings report the week of Aug 31, 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.

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