Will the earnings release trigger any changes in options activity, such as increased implied volatility or adjustments to the options chain?

Earnings‑driven options dynamics

Because DDS will release its Q2 and year‑to‑date results before the open, the market will price in the surprise (or confirmation) overnight. In the days leading up to the release, the options chain typically tightens: bid‑ask spreads narrow, and the implied volatility (IV) surface compresses as traders shed “event‑risk” premium. Once the earnings are posted, the first reaction is a sharp IV spike—often 15‑30 % above the pre‑release level—for the nearest‑expiry strikes (0‑30 days) as market participants scramble to re‑price the new information. The jump is most pronounced on the at‑the‑money (ATM) and near‑ATM strikes where delta exposure is highest, while far‑out‑of‑the‑money (OTM) contracts see a more muted rise.

Trading implications

• Short‑term volatility play: If you expect the results to be broadly in line with consensus, a sell‑IV or short‑gamma strategy (e.g., short straddles/strangles) can capture the IV decay after the post‑release spike. Conversely, if you anticipate a material beat or miss, buying ATM options (calls for a beat, puts for a miss) before the release can profit from the IV surge and directional move.
• Liquidity & delta management: The IV jump will increase premiums on the front‑month series, making it attractive to sell high‑IV options (e.g., sell a near‑term call/put) and hedge with the underlying or a delta‑neutral spread. Watch the VIX‑DDS correlation; a broader market VIX rise can amplify DDS IV, so consider hedging systemic risk if you hold large directional positions.
• Chain adjustments: Expect market makers to re‑quote the entire chain after the release, widening bid‑ask spreads on the most active strikes. Anticipate a brief period of elevated IV across the 30‑day and 60‑day expirations, then a gradual re‑version to the historical volatility baseline as the earnings narrative settles.
  

Actionable take‑away: Position ahead of the release with a short‑IV bias on the front‑month ATM strikes if you’re comfortable with a modest directional view, and be ready to take profits or roll the position as IV normalizes within 1‑2 days post‑release. Keep a close eye on the actual earnings surprise and any forward‑guidance, as those will dictate whether the IV spike sustains or collapses.