Dick’s Vs. Dicks
If you’re tracking the Dick’s (DKS: Sporting Goods) to Dicks (LEH: Loaning Bads) relationship, big change of direction lately as one (DKS) not looking so much like wallpaper any more. Probably the main factor is that one of them is selling the Speedo Michael Phelps line of everything and the other is selling anything they can get a bid on.
Volatility is of course soaring in LEH, although not quite the obsene 225 volatility of early July as you can see on the chart. Guess it’s more of an orderly implosion this time around. You really have to look at pure dollars when a stock gets to these levels also, as opposed to volatility. And the Sep. 13 straddle goes for about $4.40 or so. If you think the stock will sit here until expiration, you can actually sell that and buy the Oct 14-12-5 strangle for just about zero. So clearly the market is telling us whatever cosmic news we breathlessly await, will hit before expiration. Earnings are right about expiration day, but incredibly unlikely it goes on until then.