Dell Earnings Straddle Strategy and Trading Benchmarks
Dell is gearing up to release its earnings report on November 30, after the market’s closing bell. As many traders, you may be paying attention to the option straddle as a potential opportunity. And of course, as a trader you would want to reference relevant benchmarks to help assess the current market prices.
As you watch Dell’s pre-earnings option straddle prices fluctuate, you maybe asking how far away is the market from a theoretical fair value?
To help with that question, we turn to historical benchmarks, which provide valuable insights into the typical straddle values observed before earnings releases. By analyzing these benchmarks, we can assess whether the current market price is aligned with historical expectations or deviating significantly, potentially indicating an opportunity.
What Is The Typical Price Of An Earnings Straddle For Dell?
Let’s examine historical straddle prices right before Dell’s earnings announcements.
Historical Pre-Earnings Option Straddle Values For Dell
Source: Market Chameleon
The chart above provides a visual representation of historical straddle premiums for Dell. Each bar on the chart represents the straddle premium at the close right before earnings. These visuals offer valuable insights into the variations in straddle premiums over time.
Let’s Review The Key Benchmarks For Dell’s Earnings Straddle
What Is The Average Pre-Earnings Straddle Value For Dell?
Our first benchmark is the average closing value. On average, the straddle closed at a 8.8% premium over the underlying stock price. This figure serves as a reference point for comparing current market prices.
What Is The Range?
We also provide the range, spanning from a high of 13.1% to a low of 4%. This range offers essential context, helping you gauge where today’s market prices stand in relation to historical extremes.
What Is The Median Value?
The median value, pegged at 8.9%, indicates a well-balanced distribution of data. There’s no notable skew in one direction.
What Is The Current Straddle Market Value?
For a swift visual perspective, the light blue bar on the chart illustrates where the current straddle is trading concerning historical benchmarks. You can visualize how the current market, which stands at 6.8%, compares to the previous closing values for a relative perspective.
In Conclusion
These historical benchmarks provide a valuable perspective that is not readily available from other sources, empowering traders to make informed decisions tailored to Dell’s earnings straddle. While we don’t know the future, benchmarks can certainly help you gauge the present, offering insights that can be instrumental in your trading strategies.
As always, remember that past performance is not indicative of future results, and all trading involves risks.
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Originally Posted November 25, 2023 – Are You Thinking About Trading Dell’s Earnings Straddle? You May Want To Look At These Key Benchmarks
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