$HD Options Intelligence

# HD Options Trade Analysis – November 17, 2025

🎯 SELL HD NOV 21 420/410 PUT SPREAD

I recommend this credit spread because the term structure reveals a critical opportunity: all expirations are trading at elevated IV premiums well above baseline volatility (Clean IV 27.6% vs 16.7% baseline across all terms). The 4-day Nov 21 expiration shows the most extreme overpricing at 54.6% Market IV, creating an ideal premium-selling setup. Combined with HD's technical breakdown (RSI 29.27 in oversold territory, price 4.1% below 20-day MA), the market has already priced in significant downside risk. The Stifel downgrade to "Hold" with a $370 target has created panic selling, but the options market is now overcompensating with inflated premiums that don't reflect the actual expected move of ±6.95 (1.92%).

Sell HD Nov 21 420/410 Put Spread
Stock Price: $361.88 | Entry: $0.85 credit

📊 Trade Metrics

• Risk: $915 (width of spread minus credit received)
• Reward: $85 (credit collected)
• Breakeven: $409.15
• Max Loss: $915 if HD < $410 at expiry (Nov 21)
• Max Profit: $85 if HD > $420 at expiry
• Win Rate: 94% (based on delta – both strikes deep OTM)
• Days to Expiration: 4

📈 Term Structure & Volatility Analysis

• Baseline 90-day Vol: 16.7%
• 4-day Clean IV: 27.6% (65% ABOVE baseline = MASSIVE SELL signal)
• Market IV: 54.6% (earnings event premium inflating options)
• Earnings Multiplier: 3.56x (extremely high – market expects 4.5% move)
• Current IV Rank: 100% (highest possible – extreme overpricing)
• Calendar Opportunity: CRITICAL – Nov 21 (54.6%) vs Nov 28 (38.4%) shows 16.2% IV collapse opportunity
• Recommendation: SELL near-term premium aggressively; Nov 21 is the peak overpriced point

📈 Greeks & Volatility

• Net Delta: -0.08 (neutral/slightly bearish bias)
• Theta: +$21/day (rapid time decay in final 4 days)
• Vega: -$45 (highly beneficial – IV crush post-earnings will collapse premium)
• Current IV: 54.6% (extreme vs 30.5% average)
• IV Rank: 100% (maximum – sell everything)
• Put/Call Ratio: 0.31 (extremely bullish – heavy call buying, puts underowned)

🎯 Why This Trade

The term structure is screaming SELL. Every single expiration trades above baseline volatility, but Nov 21 is the extreme outlier at 27.6% Clean IV—65% above the 16.7% baseline. This is pure earnings event premium that will evaporate after the November 18 earnings report (tomorrow morning before market open). The market is pricing in a 4.5% move, but HD's actual expected daily move is only ±1.92%. That's a 2.3x overestimate of volatility.

Technically, HD is deeply oversold: RSI at 29.27 signals capitulation, and the stock trades 4.1% below its 20-day MA at $377.17. The Stifel downgrade from "Buy" to "Hold" with a $370 target triggered institutional selling, but this creates a classic "sell the news" opportunity. The 420/410 put spread is positioned far below current price ($361.88), requiring HD to crash another 12.8% just to reach the short strike. The probability of that happening is reflected in the 94% delta win rate.

Post-earnings IV crush will be severe—expect Nov 21 options to lose 40-50% of their premium value by Nov 19 close, regardless of which direction HD moves. This is a "collect premium and exit early" trade, not a hold-to-expiration play.

📊 Pro Analysis

• Current IV: 54.6% vs Historical: 30.5% (79% elevated)
• IV Rank: 100% (maximum overpricing)
• Expected Daily Move: ±6.95 (1.92%)
• Put/Call Ratio: 0.31 (bullish – puts are relatively cheap)
• Market Maker Max Pain: $420 (19,901 contracts – your short strike!)
• Technical: RSI 29.27 (oversold), Price 4.1% below 20MA (capitulation)
• Unusual Activity: 420 put showing 25.6x normal volume (460 vs 18 OI)

🔍 Earnings Date Check

Earnings on November 18, 2025 (TOMORROW, before market open). Your Nov 21 expiration is AFTER earnings, which is CRITICAL. This allows you to capture the IV crush that occurs post-earnings announcement. Do NOT hold through earnings—plan to close this trade by Nov 19 afternoon to lock in profits from premium decay.

💡 Trade Management

• Entry: Sell to open at $0.85 credit (limit order)
• Target: Close at $0.25 (71% profit) by Nov 19 afternoon
• Stop: Exit if HD breaks above $375 (technical resistance)
• Time Stop: Close by Nov 19 close regardless of P&L to avoid earnings gap risk
• Exit Strategy: This is a 2-3 day trade, not a 4-day hold

📅 Economic Events

• Earnings: Nov 18 (TOMORROW – before market open)
• Non-Farm Payrolls: Dec 5 (18 days)
• Fed Rate Decision: Dec 10 (23 days)

🔍 Market Overview

The broader market is navigating a critical inflection point. The VIX closed at 19.8 on Friday, elevated but not panic territory, with the SPX expecting ±1.9% moves this week (±130 points). Fed policy uncertainty