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Option Market Alert: DHI Group Inc Implied Price Swing Hits An Amplified Level




DHI Group Inc (NYSE:DHX) Risk Hits An Amplified Level

Date Published:

No Risk Alert Here: Before we dive into any analysis we simply note that DHI Group Inc (NYSE:DHX) risk is neither elevated nor depressed. We'll detail it below -- but that's the lede -- the option market is in a holding period with an IV30 of 53.16% verus the IV30 of the S&P 500 at 11.15%. You might say that the post it note for DHI Group Inc would read, "holding pattern." The annual high for DHI Group Inc IV30 is 70.58%.



To skip ahead and see if buying or selling options has been a winner in DHI Group Inc, you can go here: Geting serious about option trading.

PREFACE
This is a proprietary risk rating and risk alert system that looks forward for the next month -- or really 30 days to be exact -- and that includes weekends. The system is based on multiple interactions of data points, many of which come directly from the option market for DHI Group Inc (NYSE:DHX) . The creator of this model is Capital Market Laboratories (CMLviz.com).


Option trading isn't about luck -- this four minute video will change your trading life forever: Option Trading and Truth

In the "Why This Matters" section at the end of this article on DHI Group Inc we're going to take a step back and show in great specificity that there is actually a lot less "luck" in successful option trading than many people know. The whole concept of an "option trading expert" is vastly over complicated and we'll talk about how superior returns are earned.

But first, let's turn back to DHX and the company's risk rating:

We also take a peek at the implied vol for the Technology ETF (XLK), our broad based proxy for DHX.





SNAPSHOT SUMMARY
S&P 500 IV30     11.15%
Nasdaq 100 IV30     12.44%
XLK IV30     12.46%

DHX HV 30     78.74%
DHX Current IV30     53.16%
52 Week Low IV30     37.77%
52 Week High IV30     70.58%


The implied price swing risk as reflected by the option market has hit an amplified level relative to the company's past. The option market reflects a 95% confidence interval stock price range of ($3.40, $4.40) within the next 30 calendar days.

DHX OPTION MARKET IMPLIED PRICE SWING RISK
The IV30® is the implied price swing risk reflected by the option market in the stock price for the next 30 calendar days -- it's forward looking. DHI Group Inc shows an IV30 of 53.2%, which is an amplified level for the company relative to its past.

The option market for DHX has shown an IV30 annual low of 37.8% and an annual high of 70.6%, meaning that DHX is at the 47% percentile right now. Here's a table of the data before we dig into the implied price swing risk rating further.

DHX
Current IV30    
DHX
Low IV30    
DHX
High IV30   
53.2% 37.8% 70.6%

The implied stock swing risk from the option market has created a range which is tighter in the next 30 calendar days for DHI Group Inc (NYSE:DHX) than it has been on average for the last year on average.
Further, if we look backwards, the stock has a realized 30-day historical volatility, called the HV30, of 78.74%.




We have a situation now where the IV30 is depressed relative to the past and at the same time the option market reflects the likelihood of a smaller stock movement in the next 30-days than the stock has realized in the last 30-days. Let's turn to a chart to see what's going on.
 
Note how much lower the forward looking stock swing price risk for DHI Group Inc is priced (53.2%) compared to what happened just in the last 30-days (78.7%).

DHI Group Inc Risk Rating
The DHX risk rating is at 3.5, where the rating goes from one (the lowest risk) to five (the highest risk). The driving factors for the 3.5 rating are:

The IV30 is below the annual average.
The IV30 is above 50%.
The HV30 is above the annual average.
The HV30 is above 70%.
The IV30 is below the HV30.
The stock has moved -32.2% over the last 3-months which does indicate some elevated risk.