Bullish Call OI at $410 vs. Bearish Put Skew: HD’s Volatility Playbook for November

• The Home Depot (HD) trades at $366.78, down 1.17% from its previous close, with RSI at 29.18 and MACD signaling bearish momentum.
• Options data shows heavy call open interest at $410 (3855 contracts) and $395 (3224) for Friday expiration, while puts at $355 (592) and $360 (476) hint at downside hedging.
• Corporate news includes $30M in veteran housing support and a Q3 earnings call on Nov 18—key dates for sentiment shifts.
• Put/call ratio for open interest is 0.7, favoring bullish bets, but technicals suggest caution below $370.

Here’s the thing: HD’s options market is a tug-of-war between aggressive bullish bets and cautious bearish hedges. The stock’s technicals are bearish in the short term, but the call options at $395–$410 suggest big players are pricing in a potential rebound. Let’s break down what this means for traders.

The Call/Put Imbalance: A Battle for HD’s Direction

The options chain tells a story of conflicting expectations. For Friday expiration, the top OTM calls are clustered at $395–$410, with $410 having the highest open interest (3855 contracts). This isn’t just noise—it’s a signal that some traders are betting on a sharp rebound, possibly driven by the Nov 18 earnings call. But the puts at $355–$360 (592–476 OI) show others are hedging against a drop below key support levels.

For next Friday’s expirations, the call skew intensifies. The $420 strike has 11,230 open calls, nearly triple the $450 strike (7003). That’s a big bet on a post-earnings pop. Meanwhile, puts at $365 (2672 OI) and $355 (2153) suggest a floor is being priced in around $360–$365.

The put/call ratio of 0.7 (calls dominate) leans bullish, but don’t ignore the technicals. HD is trading below its 30D ($385.71), 100D ($387.99), and 200D ($380.83) moving averages. If the stock can’t break above $370.30 (intraday high), the bearish bias could win out.

Corporate News: A Soft Tailwind, Not a Gale

The Home Depot’s recent headlines are positive but not explosive. The $30M veteran housing pledge and hurricane relief donations are feel-good stories that reinforce brand loyalty, but they’re unlikely to move the stock much. The real catalyst will be the Nov 18 earnings call. Investors are watching for updates on supply chain issues and holiday sales guidance—two areas where HD’s execution could sway sentiment.

Here’s the catch: the market already priced in some of this. The call options at $395–$410 imply traders expect a post-earnings rally, but if the call is wrong, the puts at $360 could become a lifeline. Retail investors might be tempted to chase the bullish calls, but the technical setup suggests a test of support levels first.

Actionable Trade Ideas: Calls, Puts, and Precision Entries

Let’s get specific. For options traders:

• Bullish Play: Buy the $395 call (Friday expiration) if HD breaks above $370.30. The strike is the second-highest OI for Friday, and a rebound to $395 would align with the 30D MA. Stop-loss below $365.50 (lower Bollinger Band).
• Bearish Hedge: Buy the $365 put (next Friday expiration) if HD closes below $367.50 (200D support). The strike has 2672 OI and could act as a floor if the stock gaps down post-earnings.

For stock traders:

• Entry Near $367.50–$369.30: This is the 200D support range. If HD holds here, consider a long entry with a target at $378.88 (30D support). Stop-loss below $363.48 (intraday low).
• Short-Sellers: If HD breaks below $363.48, target $355–$360 (put-heavy zone). But only if RSI drops below 25 and MACD turns negative.

Volatility on the Horizon: Balancing Hope and Caution

HD’s options market is a chess game. The calls at $395–$410 are aggressive, but the technicals and puts at $360 suggest a volatile path. The key dates are Nov 18 (earnings) and the Friday expirations. If HD surprises to the upside, the $395–$410 calls could explode. If it disappoints, the puts at $365 might cap the damage.

Bottom line: This isn’t a one-way bet. The data leans slightly bullish, but the risks are real. Position yourself with a mix of calls for upside and puts for downside, and keep an eye on the Nov 18 call. In trading, it’s not about being right—it’s about being ready.