What strategies could capitalize on DAVE's earnings volatility?

Given Dave & Buster's (DAVE) significant earnings volatility, several strategies could capitalize on this volatility. Here are some options to consider: 1. **Long Calendar Spread**: Given DAVE's high implied volatility (IV) of 118.6, which is in the 98% percentile rank, a long calendar spread could be effective. This involves buying a near-expiry option and selling a far-expiry option, all while maintaining a debit position. This strategy benefits from the time decay, which reduces the option's value as expiration approaches, but IV remains high, providing potential for gains. 2. **Sell Covered Straddles**: If you're not afraid of being assigned shares or having them taken away, a covered straddle could be a good bet. This involves selling a straddle (both call and put options) while having a long position in the underlying stock. This strategy profits from the premium received from selling options, especially when IV is high, and the stock remains range-bound. 3. **Volatility Trading**: Given DAVE's high IV, consider trading volatility itself. This can be done using volatility futures or options, betting on how much IV will change. Given the spike in IV around earnings, you could look to trade IV back down as the market digests the earnings report. 4. **Earnings-Season Strategies**: Given DAVE's history of missing revenue targets but exceeding earnings expectations, consider earnings-season strategies. This involves buying options close to earnings and selling them as the market digests the earnings report. Given the high IV, you could profit from the implied volatility decreasing as the market gets more information. 5. **Strategic Partnerships and Revenue Growth**: Dave & Buster's recent report highlights strategic partnerships and a 38% revenue increase. If these trends continue, long positions in DAVE could be beneficial. However, if the company continues to miss revenue targets, this strategy could be risky. In conclusion, given DAVE's high IV and history of volatility around earnings, these strategies could capitalize on the company's earnings volatility. However, it's important to note that options trading involves risk, and these strategies should be executed with a clear risk management plan.