LUVSouthwest Airlines Co.
Options Analysis Report•AIR TRANSPORTATION, SCHEDULED
Market Cap $21.0B|NYSE
● 2026-04-17$42.70
NEUTRAL
Analysis: 2026-04-16 EOD data
1Y +77.6%YTD +3.4%7D +7.9%
Options Vol
6,599
30D
Implied Move
±18.2%
IV Rank
75%
LUV Options Overview
IV is elevated. Conditions favor premium sellers.
REWARDS
RISK ANALYSIS
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Value
Is IV priced right?
1.9
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 93.4% — elevated vs history
IV/HV Ratio
<1.05xIV/HV 1.32x — IV premium over HV
Sector Relative≤50%
Sector percentile 94% — above sector median
Term Structure
<1.1xFront/Back 1.56x — backwardation
Skew Normal
<1.25xPut/Call IV 1.16x — elevated
Absolute IV
<80%ATM IV 60.9% — normal range
Spread-Adjusted Value
<80%Effective IV 101.1% (ATM 60.9% + spread 20.1% + bias) — expensive
Execution Efficiency
<3.0%Total drag 25.21% (spread 20.09% + slippage 5.12%) — high friction
Vega Efficiency
≥5.0Vega efficiency 7.33 (vega 14.731 / spread 20.09%) — efficient
Sentiment
Bullish or bearish?
5.5
BearishBullish
Analyzes
put/call ratios
, open interest skew
, and flow direction to determine market bias.Risk ChecksBullish - Moderate signal (Conviction: +10%, Raw: +18%)
Flow Direction
|net sentiment| ≥25%Conviction-weighted: +10% (bullish) — Raw: +18%
OI Skew Magnitude
≥15%|OI skew| 25.4% — call-heavy
Volume-OI Alignment
Same sign, |vol skew| ≥10%Vol skew +1.3%, OI skew +25.4% — weak (same direction)
Conviction Quality
≥2/3 conditions0-DTE 19%, far-OTM 15%, avg DTE 30
OI Momentum
|change| ≥3%OI change +0.0% (5d) — stable
Smart Money Flow
|weighted flow| ≥20%ITM: -24%, ATM: -30%, OTM: +41% — strong bearish (ITM/ATM aligned)
Sector Relative≤40% or ≥60%
Sector P/C percentile 64% — bearish vs sector
Activity
Unusual activity?
2.3
QuietActive
Detects volume surges,
block trades
, and unusual options activity that may signal moves.Risk Checks0/9 checks passed
Volume Surge
≥1.5xVolume 0.4x avg — normal
Turnover Rate
≥15%Vol/OI 1.7% — 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 +2.6% (5d) — building
Sector Relative≥60%
Sector activity percentile 19% — quiet vs sector
Trade Quality
≥30%Large trade volume 19% — mixed
Execution Urgency
≥60%Aggressive execution 28% — patient
Flow Conviction
≥30Conviction +10 (bullish) — mixed
Liquidity
Can I trade efficiently?
3.5
IlliquidLiquid
Evaluates
bid-ask spreads
, volume depth, and open interest for trade execution quality.Risk Checks3/8 checks passed
Tradeable Spread
≤5.0%Spread 20.1% — wide
Adequate OI
≥10,000OI 398,350 — deep
Active Volume
≥500Volume 6,599/day — active
Reasonable Cost
≤$0.50$1.00 to cross — expensive
Strike Coverage
≥5 strikes0 liquid strikes — limited options
Sector Relative≤40%
Sector spread percentile 95% — much wider than sector
Order Book Depth
≥100 contractsDepth 369.3 contracts (bid:222.3 ask:147.0) — adequate
Execution Quality
<1.0%Avg slippage 5.12% — poor
Timing
Is now a good time?
7.6
RiskyFavorable
Considers earnings proximity,
time decay
, and event calendar for optimal entry timing.Risk Checks7/9 checks passed
Term Structure Clarity
|slope| ≥5%Slope +56.0% — backwardation
IV Percentile Clarity
<30 or >70IV percentile 93% — seller opportunity
Event Detection
≥10pts kinkIV kink 21.9pts — event priced
Theta/Vega Clarity
<0.5 or >2.0θ/ν ratio 1248.38 — favors income trades
Expiration Distribution
≥3 expirations5 liquid expirations — flexible
Event Risk
≥60% (safe)caution advised: Earnings in 5d (elevated risk)
Spread Momentum
<1.2 ratioSpread ratio 1.00x — stable
Flow Momentum
≥25% strength + ≥50% consistencyFlow +10% @ 55% consistency — unclear
Smart Money Timing
≥40 composite scoreScore 49 (ITM 20% + inst 19%) — moderate institutional
Directional Strategy Fit
Option Buyers
Long Calls4.2
bullishIV expensive, mixed flow
Long Puts3.9
bearishIV expensive, mixed flow
Premium Sellers
Cash-Secured Put6.2
bullishIV rich premium, mixed flow
Covered Call5.8
bearishIV rich premium, mixed flow
For educational purposes only. Not investment advice.