$UPS Options Intelligence

🎯 SELL UPS NOV 21 100/95 PUT SPREAD

I recommend this credit spread because the term structure reveals a critical pricing inefficiency: the 4-day Nov 21 expiration is trading at 41.3% Clean IV—significantly overpriced relative to the 25.6% baseline historical volatility. This 15.7% IV premium creates an exceptional opportunity to sell near-term volatility before it collapses. Combined with UPS's ex-dividend execution today (the -1.34% move reflects the $1.64 dividend payout), the stock has already digested its primary catalyst, reducing downside risk into Friday's expiration.

Sell UPS Nov 21 100/95 Put Spread
Stock Price: $94.69 | Entry: $0.45 credit

📊 Trade Metrics

• Risk: $455 (max loss if UPS closes below $95)
• Reward: $45 (credit collected)
• Risk/Reward: 10.1:1 (unfavorable, but high probability)
• Breakeven: $94.55
• Win Rate: 78% (based on delta of short put at -0.083)
• Days to Expiration: 4
• Max Profit: $45 if UPS > $100 at Nov 21 close
• Max Loss: $455 if UPS < $95 at Nov 21 close

📈 Term Structure & Volatility Analysis

• Baseline 90-day Vol: 25.6%
• 4-day Clean IV: 41.3% (+15.7% above baseline = SELL signal)
• Current IV: 27.6% (market average)
• IV Rank: 10% (historically low, but near-term elevated)
• Calendar Spread Opportunity: 41.3% (4d) vs 30.8% (9d) = 12.5% IV differential
• Primary Signal: Extreme overpricing in ultra-short-term creates premium-selling edge

This is a high-probability, low-reward trade designed to capitalize on near-term IV crush into expiration. The 4-day window is too short for significant directional moves.

📈 Greeks & Volatility

• Short Put Delta: -0.083 (highly OTM, minimal directional risk)
• Long Put Delta: -0.012 (protection)
• Net Delta: -0.071 (nearly neutral)
• Theta: $0.12/day (rapid time decay benefits this trade)
• Vega: -$2.10 (benefits from IV collapse)
• Current IV: 27.6% vs Historical: 32.8%
• Put/Call Volume Ratio: 0.06 (extremely bullish—heavy call buying)
• Put/Call OI Ratio: 0.21 (calls dominating)

🎯 Why This Trade

The term structure is screaming a sell signal. The 4-day Nov 21 expiration at 41.3% Clean IV sits 15.7% above the 25.6% baseline volatility—this is extreme overpricing. Normally, near-term options trade at a premium to baseline, but this 41.3% level is unsustainable and will collapse as we approach Friday's close. The market is pricing in event risk that has already occurred: UPS went ex-dividend today, explaining the -1.34% move. That catalyst is now behind us.

From market intelligence: "The main specific event on November 17, 2025, affecting UPS stock was the ex-dividend date for the $1.64 quarterly dividend." This is done. The stock has already adjusted. The Put/Call volume ratio of 0.06 shows institutional investors are heavily buying calls (bullish positioning), not puts, reducing downside pressure.

Technically, UPS trades at $94.69—above its 20-day MA of $93.23 but critically below its 200-day MA of $97.89, signaling a bearish long-term structure. However, RSI at 57.89 is neutral (not oversold), and the stock is only 1.6% above the 20-day MA, indicating no extreme overbought condition.

The 100/95 put spread targets a 5.5% downside move, which is 2.3x the expected daily move of ±1.64 (1.74%). This provides a substantial margin of safety. Even if UPS drops to $94 by Friday, you're profitable.

📊 Pro Analysis

• Current IV: 27.6% vs Historical: 32.8%
• IV Rank: 10% (low overall, but 4d expiry at 41.3% is anomalous)
• Expected Daily Move: ±1.64 (1.74%)
• Put/Call Ratio: 0.06 (extremely bullish sentiment)
• Max Pain: $100 (86,118 contracts) — directly at your short strike
• Technical: RSI 57.89 (neutral), Price above 20MA by 1.6%, below 200MA (bearish structure)
• Unusual Activity: Heavy call volume (1891 contracts in Nov 21 100 calls)

💡 Trade Management

• Entry: Sell at $0.45 credit (bid/ask spread likely $0.40/$0.50)
• Target: Close at $0.15 (67% profit) by Wednesday
• Stop: Exit if UPS breaks above $96.50 (closes above day's high)
• Time Stop: Close Thursday if not at target (capture 90% of theta)
• Adjustment: If UPS drops to $93, buy back spread at $0.80 loss to lock in remaining theta

📅 Earnings Date Check

Next earnings: January 29, 2026 (73 days away). This Nov 21 expiration is well before earnings, so no earnings risk. ✅

🔍 Market Overview

The Fed has maintained its hawkish stance with rates at 4.5-4.75%, creating a challenging environment for cyclical stocks like UPS. Recent economic data shows resilience, but recession fears persist. The logistics sector is under pressure—UPS's acquisition of Andlauer Healthcare Group (CAD $2.2B in early November) signals management's