DexCom [DXCM]
The memo issues no position verdict.
| Item | Value |
|---|---|
| Chosen vehicle / ladder position | Equity, step 1 |
| Trailing 252-day realised volatility | 41.8% |
| Measured implied volatility (Jun-2027 $75 call, ATM, delta 0.63) | 47.88% |
| Implied − realised | +6.1pp |
| Quoted size at the strike | bid 12.79 × 22 / ask 17.29 × 42 |
| Bid-ask as % of mid | 29.9% ($4.50 on a $15.04 mid) |
| Open interest at strike | 4 contracts |
Why not the LEAP — and this one is disqualifying, not merely unattractive. The implied-over-realised
premium of 6.1pp is the smallest of the three names, so on price alone a LEAP would be arguable. It fails
on constructability: 4 contracts of open interest and a 22×42 quote with a 30%-of-mid spread at the
at-the-money strike. Adjacent strikes are no better ($65C: 29×27 with 1 contract of OI; $80C: 24×20 with 3).
This is the HCA/GMED/CRDO failure mode — an entire 12-month-matched chain that cannot be filled. Per
criteria.md, "a vehicle that cannot be filled is not a vehicle," and where no expiry is both liquid and
long enough, the answer is equity.
Note the contrast with BSX, whose Jun-2027 $45 strike quoted 1,201×1,217. Same expiry, same sub-sector, same day — chain depth is name-specific and must be quoted at the strike every time.
| Level | Basis | |
|---|---|---|
| Spot | $75.14 | 2026-07-29 close |
| 12-month target | $96.00 (+27.8%) | 6.91x EV/Sales on $5,350m NTM revenue = trailing-8-quarter own median, 12th percentile of 8-year history |
| 52-week range | $54.84 – $89.35 | −15.9% from high |
| Own 8-year EV/S floor | 4.82x → ~$68 | −9% |
| Bear case | $52 (−31%) / $42 (−44%) | CMS defers past 2028 + Abbott prices against 15-day; p=30% |