🎰 DRAFTKINGS: DERIVATIVES TRADING 🎰
DraftKings Inc. operates as a digital sports entertainment and gaming company in the United States and internationally. The company offers online and retail sports betting, daily fantasy sports, digital lottery couriers, prediction markets, and other products, as well as retails sportsbooks. It also provides iGaming, or online casino products, which includes blackjack, roulette, baccarat and slot machines. In addition, the company engages in the design and development of sports betting and casino gaming software for online and retail sportsbooks, and iGaming operators.
Margins LTM [22/02/26]:
- Gross margin: ≈ 76.1%
- Operating margin: ≈ -0.04%
- EBITDA margin: ≈ 4.81%
- Net margin: ≈ 0.06%
- ROIC: ≈ -0.27%
Insights:
- P/S ratio close to ≈ 1.7x, where 4x is the average of last years
- PER ratio of 0x, where the median is ≈ 0x (not applicable)
- EV/EBITDA of 38x, where the median is ≈ 40x
- Correlation with SP500 [VOO] of ≈ 55.7%, where their behaviour only could be explained by ≈ 31.7% in the last year [LTM]
- Beta with SP500 [VOO: Benchmark] of ≈ 2.39x
Based on its last P/S [22/02/26 TTM] of ≈ $12.21 USD and a 3 Forward P/S Ratio and a sensibility of ± 0.4918x annual, a hypothetical spread could be (ceteris paribus):
- High: ≈ $ 54.67 USD
- Neutral: ≈ $ 36.64 USD
- Down: ≈ $ 18.62 USD
Hypothesis
DKNG in the next ≈ 12 months, might have a strong distribution phase above ≈ $36.5 USD and a strong accumulation phase below ≈ $23.5 USD where there is a bearish bias due to its financial metrics and other quantitative parameters.
:::> It could be an acceptable risk to take due to the possibility of a technical rebound that stabilizes the trend.
Hedge plan example:
- Call [sell]: $53 USD
- Call [buy]: $36 USD
- Put [buy: $23.5 USD
- Put [sell]: $20 USD
Risks
- Prices higher than $53 for a long time
- Prices lower than $20 for a long time.
- The neutral price of ≈ $30 / $37 is not reached at expiration
- Roll over costs (if time is not well estimated)
- Not revaluation of strategy each 6 months
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J. Joel Padilla
▶️Blog: https://jjplindex.blogspot.com/
▶️Telegram: https://t.me/JJPL_Index
Copyright: Joel Padilla 2026
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