The HPQ options market is quietly revaluing the "old-school PC stock"—the earnings report on 5/27 is the final hurdle.

To be honest, $HP(HPQ.US) has never been a hot topic in the options circle—everyone is watching NVDA and TSLA, who cares about HP Inc.'s option chain? But the reason I'm making you take a second look this time is simple—the pricing in the options market has changed, and the spot price hasn't fully reflected it yet.

First thing · IV has risen to the 68th percentile

Historically, HPQ's IV has oscillated between the 30th and 40th percentiles. Since late March, it has climbed all the way to the 68th percentile, significantly higher than the 30-day historical volatility. This is a clear pre-earnings pricing signal—the market is willing to pay a premium for volatility.

But the key is the directional structure. If the IV rise was solely driven by "fear of an earnings crash," we would see the Put side move first and the Skew steepen. HPQ's Skew is moving in the opposite direction—the Call side is more expensive (+1.8%), and the Put/Call ratio is only 0.55. This combination indicates the IV rise is not fear-driven, but rather active long positions being built.

Second thing · Probability distribution is clearly right-skewed

In the 60-day surface implied distribution, HPQ has the highest probability of landing in the $30-$34 range. However, the right tail (>$36) is about 22%, while the left tail (<$28) is only 15%—the asymmetry is evident.

This is abnormal for a "traditional PC hardware stock" like HPQ. For the past few years, its option pricing has been symmetrical (after all, no one believed it could surge). The thickening of the right tail now suggests: the market is starting to believe HPQ has the potential for a valuation shift.

Third thing · Smart money has already positioned itself

Starting with the large block Call report on 3/27, Open Interest (OI) has noticeably piled up at the $33 and $35 strikes for the 6/20 expiration. The 6/20 expiry means crossing the 5/27 earnings date—this is a typical "earnings gamble" structure, but choosing 6/20 over 5/30 is to leave an IV buffer (avoiding instant loss from IV crush).

What's the catalyst? The HP Imagine 2026 launch event—AI PCs (HP IQ + NearSense), AI workstations (Z series), quantum-resistant LaserJets. Repackaging HP from a "sunset hardware stock" into a **dual narrative of "AI hardware + enterprise security"**. Q1 already beat (EPS $0.81 vs. expected $0.77), and the market believes Q2 on 5/27 will continue this momentum.

How to use this signal?

For the bulls: Don't chase the spot nakedly. IV is already at the 68th percentile; naked Calls post-earnings risk losing twice (direction must be right + IV can't drop too much). Recommend a Bull Call Spread · 6/20 · $33/$37—buy where the smart money piled up OI, and use the short leg to hedge vega.

For the bears: Don't buy Puts now. The Skew shows low hedging demand; Puts are cheap but the direction is wrong. It's not too late to wait until after the earnings IV crush.

For those unsure of the direction: Watch the changes in the Skew. If the Skew starts to steepen in mid-May (the Put side becomes more expensive), it means institutions are starting to buy protection—that's the first signal of a potential reversal. We haven't seen that yet.

Risk factors

HPQ's biggest risk isn't missing earnings expectations—Q1 already beat, and Q2 EPS expectations have been lowered to $0.71 (low base), making another beat quite probable. The real risks are:

• Conservative company guidance pressuring valuation (beat & miss guidance has been HPQ's typical play in recent years)
• The AI PC narrative being discounted due to weak macro demand
• The market having already "priced in" the 6.9% YoY revenue growth, making it harder to exceed expectations