{"id":65459,"date":"2025-10-22T03:00:04","date_gmt":"2025-10-22T08:00:04","guid":{"rendered":"https:\/\/www.tradestation.com\/insights\/?p=65459"},"modified":"2025-10-22T07:38:28","modified_gmt":"2025-10-22T12:38:28","slug":"options-alert-southwest-puts","status":"publish","type":"post","link":"https:\/\/www.tradestation.com\/insights\/2025\/10\/22\/options-alert-southwest-puts\/","title":{"rendered":"Options Alert: Are the Puts in Southwest Bullish?"},"content":{"rendered":"<p>Southwest Airlines reports earnings this afternoon, and one big trader is using options to shield against potential turbulence.<\/p>\n<p>This large transaction occurred yesterday in the Dallas-based carrier:<\/p>\n<ul>\n<li>13,408 31-October 31 puts were sold for $0.37.<\/li>\n<li>13,408 31-October 33 puts were purchased for $0.87.<\/li>\n<li>Volume was below open interest in the 31s but not the 33s. That suggests an existing position was closed and rolled to the higher strike.<\/li>\n<\/ul>\n<p><a href=\"https:\/\/www.tradestation.com\/insights\/2024\/05\/12\/the-basics-of-options\/\">Puts<\/a> fix the price where a security can be sold. Investors often buy them to hedge against downside, limiting risk during big events like earnings.<\/p>\n<p>In the case of yesterday&#8217;s trade, the investor may own at least 1.34 million shares. The protective puts can limit losses in the event of a selloff. If the company rallies, they can still profit from upside in the stock. Making the adjustment cost a $0.50.<\/p>\n<p>LUV rose 0.73 percent to $34.68 yesterday. Prices chopped in a sideways range since August, consolidating near their 50-, 100- and 200-day moving averages.<\/p>\n<div id=\"attachment_65466\" style=\"width: 1930px\" class=\"wp-caption aligncenter\"><img loading=\"lazy\" decoding=\"async\" aria-describedby=\"caption-attachment-65466\" class=\"size-full wp-image-65466\" src=\"https:\/\/cdn.tradestation.com\/uploads\/sites\/2\/LUV_20251021.jpg\" alt=\"\" width=\"1920\" height=\"918\" srcset=\"https:\/\/cdn.tradestation.com\/uploads\/sites\/2\/LUV_20251021.jpg 1920w, https:\/\/cdn.tradestation.com\/uploads\/sites\/2\/LUV_20251021-300x143.jpg 300w, https:\/\/cdn.tradestation.com\/uploads\/sites\/2\/LUV_20251021-1024x490.jpg 1024w, https:\/\/cdn.tradestation.com\/uploads\/sites\/2\/LUV_20251021-768x367.jpg 768w, https:\/\/cdn.tradestation.com\/uploads\/sites\/2\/LUV_20251021-1536x734.jpg 1536w, https:\/\/cdn.tradestation.com\/uploads\/sites\/2\/LUV_20251021-1080x516.jpg 1080w\" sizes=\"(max-width: 1920px) 100vw, 1920px\" \/><p id=\"caption-attachment-65466\" class=\"wp-caption-text\"><em>Southwest Airlines (LUV), daily chart, with select indicators.<\/em><\/p><\/div>\n<p>Competitors Delta Airlines (DAL) and United Airlines (UAL) issued strong results and guidance earlier in the month.\u00a0Despite the positive numbers, airlines face potential risks if the government shutdown interferes with air-traffic controllers.<\/p>\n<p>Overall option volume in LUV was about twice the daily average, according to TradeStation data. Puts outnumbered calls by more than 3-to-1.<\/p>\n<div>\n<hr class=\"wp-block-separator has-alpha-channel-opacity\" \/>\n<\/div>\n<p><em>Options trading is not suitable for all investors. Your TradeStation Securities\u2019 account application to trade options will be considered and approved or disapproved based on all relevant factors, including your trading experience. See\u00a0<a href=\"https:\/\/www.theocc.com\/Company-Information\/Documents-and-Archives\/Options-Disclosure-Document\">www.TradeStation.com\/DisclosureOptions<\/a>. Visit\u00a0<a href=\"http:\/\/www.tradestation.com\/Pricing\">www.TradeStation.com\/Pricing<\/a> for full details on the costs and fees associated with options.<\/em><\/p>\n<p><em>Margin trading involves risks, and it is important that you fully understand those risks before trading on margin. The Margin Disclosure Statement outlines many of those risks, including that you can lose more funds than you deposit in your margin account; your brokerage firm can force the sale of securities in your account; your brokerage firm can sell your securities without contacting you; and you are not entitled to an extension of time on a margin call. Review the\u00a0Margin Disclosure Statement at\u00a0<a href=\"https:\/\/uploads.tradestation.com\/uploads\/margin-disclosure-statement.pdf\">www.TradeStation.com\/DisclosureMargin<\/a><\/em>.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Southwest Airlines reports earnings this afternoon, and one big trader is using options to shield against potential turbulence.<\/p>\n","protected":false},"author":39,"featured_media":65460,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_et_pb_use_builder":"","_et_pb_old_content":"","_et_gb_content_width":"","inline_featured_image":false,"footnotes":""},"categories":[26,14,13],"tags":[523],"class_list":["post-65459","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-industrials","category-options","category-stocks","tag-luv","et-has-post-format-content","et_post_format-et-post-format-standard"],"yoast_head":"<!-- This site is optimized with the 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