We're staying off to the sidelines on Dell given the uncertainties over the Dell balance sheet amid the SEC investigation. An SEC probe is always a red flag in my book, BUT - and this is a big but - there are just too many unknowns to make an educated speculative decision on whether to go long or short. There is just no predicting what items like off balance sheet entities, exploding payables and tangible assets will look like. Dell certainly won't dare fudge anything since SEC is looking over their shoulder, but the company can use 'preliminary' numbers to reduce transparency and as a way to retroactively revise figures in the future. Dell can also use any number of tricks with respect to changes in deferrals of revenue recognition and expense capitalization to give a near term boost to its numbers.
The battle lines are certainly drawn. In the December options, 42k Dec 25 calls have traded vs volume of 18k puts. Open interest on the Dec25 calls also out numbers OI on the puts by 16k contracts. Given that implied volatility is about its long term average, both sides may get little satisfaction unless there is a huge surprise which is not factored into the pricing of the options.