Workday [WDAY]
As of 2026-07-29 · spot $167.975 · This memo issues no position verdict.
This is the first cluster tonight in which an options vehicle is actually available, and on WDAY the pass is the strongest of the five by open interest. Nine of the ten names where the chain was pulled before this cluster could not be filled at any size:
| Name | Chain depth found | Verdict |
|---|---|---|
| GMED | 13 contracts | Uninvestable |
| HCA | 18 — maximum open interest across an entire March-2027 expiry | Uninvestable |
| CRDO | 78 | Uninvestable |
| ISSC | 506 | Uninvestable |
| KNSA | 2,598 total across the chain | Marginal |
| WDAY | 6,771 at a single strike — the deepest single strike in the cluster | Investable |
| CRWD / CRM / ADBE / PANW | 5,883 / 4,229 / 3,356 / 2,713 at a single strike | Investable |
The Liquidity Criteria exists because "a vehicle that cannot be filled is not a vehicle." WDAY's Jan-2027 $200 strike alone carries 6,771 contracts — 376 times HCA's entire March-2027 chain.
| Metric | Value | Basis |
|---|---|---|
| 3-month average daily volume | 5,068,177 shares | 62 sessions to 2026-07-28 |
| 3-month average daily value | $851m | VWAP-weighted — the thinnest of the five, still ample |
| 252-day volatility | 49.0% | the highest of the five names in this cluster |
| Option-implied volatility, Jan-27 | ~60–64% | §3 |
Sizing implication. At 20% of ADV, ~$170m can be transacted in a session. That is the binding number of the five, and it is still far beyond any plausible size for this book.
Two facts that argue against leverage here. (i) Realised volatility of 49.0% against implied of 60–64% — an 11–15 point premium, so options are rich against Workday's own realised movement. (ii) That 49.0% realised figure is itself the highest in the cluster, so the underlying already delivers the convexity a call would be bought for. Workday is the name where the equity gives you the most movement per dollar and the option costs the most vol premium — the opposite of a case for a derivative.
Liquidity Criteria: PASS.
Scanned: calls, expiry 2026-11-01 to 2027-02-28, strikes $143–$210 (0.85× to 1.25× spot). 26 contracts returned — the narrowest strike ladder of the five, which is the one genuine caveat on this chain. Snapshots are live quotes and Greeks from the Alpaca options entitlement.
| Contract | Expiry | Strike | Open interest | Bid | Ask | Spread | Bid size | Ask size | IV | Delta |
|---|---|---|---|---|---|---|---|---|---|---|
| WDAY270115C00200000 | 2027-01-15 | 200 | 6,771 | 16.32 | 18.07 | 10.2% | 182 | 121 | 60.2% | 0.426 |
| WDAY270115C00195000 | 2027-01-15 | 195 | 5,263 | 18.21 | 19.67 | 7.7% | 77 | 26 | 61.0% | 0.453 |
| WDAY270115C00210000 | 2027-01-15 | 210 | 3,065 | 14.37 | 15.67 | 8.7% | 64 | 33 | 61.0% | 0.384 |
| WDAY261218C00155000 | 2026-12-18 | 155 | 1,529 | 31.66 | 33.86 | 6.7% | 162 | 72 | 62.8% | 0.665 |
| WDAY261218C00160000 | 2026-12-18 | 160 | 1,075 | 29.73 | 31.56 | 6.0% | 114 | 33 | 63.7% | 0.636 |
| WDAY261218C00180000 | 2026-12-18 | 180 | 887 | 21.72 | 22.42 | 3.2% | 26 | 7 | 63.0% | 0.519 |
Reference contract: WDAY270115C00200000 — 6,771 open interest, 182×121 quoted size, 10.2% spread, delta 0.426. At the $18.07 offer that is ~$219k of immediately available offer.
Read the size, not just the open interest. WDAY's open interest is the deepest in the cluster but its quoted size is the thinnest: 182×121 at the reference strike against CRM's 456×346. The $180 December strike quotes a remarkable 3.2% spread but only 26×7 contracts — tight price, almost no size. Depth of position and depth of quote are different things and this chain has the first without much of the second. A meaningful order must be worked.
Structures that are actually fillable: - Outright Jan-27 $200 call — 6,771 OI, 10.2% spread, delta 0.426. The deepest position on the chain. - Jan-27 $195/$210 call spread — both legs quoted, OI 5,263 and 3,065. Net debit ~$3.9 mid. Defined risk, but the $195 leg quotes only 77×26 and the $210 leg 64×33 — this must be legged, and combined round-trip spread cost is ~16% of the premium. - Dec-18-2026 $155 call — 1,529 OI, 6.7% spread, delta 0.665, and it sits across both the Q2 FY27 print (~late Aug) and the Q3 print (~late Nov). Note IV 62.8% against Jan-27's 60.2%: a 2.6-point term premium for the two events. - Cash equity — $851m ADV, 49.0% realised vol. On the numbers this is the better vehicle, for the reasons in §2.
Boundaries of the pull: only 26 contracts exist in the $143–$210 / Nov-26–Feb-27 window, materially fewer than CRM's 48, ADBE's 59, PANW's 81 or CRWD's 96. Strikes and expiries outside that window were not scanned and I make no claim about them. Puts were not pulled — long-only book, no hedge proposed.
Parameters, not a recommendation. The implied-path verdict is INDETERMINATE at −0.0pp, so nothing below should be read as a case for owning it.
Vehicle. The equity, for the two reasons in §2: options carry an 11–15 point vol premium over realised, and the underlying's own 49% volatility already supplies convexity. The thesis is also a multi-year margin-expansion question (Valuation §3), not a dated catalyst, and expressing a five-year margin thesis in a five-month option is the horizon mismatch valuation.md documents.
Entry. No trigger is defended, and Momentum Criteria is MEASURED — it governs when, never whether. Momentum is weak on the five-year view (−26.4%) but the most recent signal is strongly positive: +12.4% in a single session on 2026-05-29 on the Q1 FY27 print. The market liked this quarter. A book wanting confirmation should wait for the Q2 FY27 print (~late Aug 2026), which tests whether the reiterated-not-raised FY27 subscription guide was conservatism or a warning.
Sizing. Inverse-volatility. At 49.0% realised — the highest of the five — WDAY takes the smallest weight of the cluster on that rule. This is the interim control working exactly as designed: the name with the widest range of defensible outcomes (Valuation §3, where the verdict spans FAIL at a 15% terminal margin to PASS at 25%) is automatically sized down. The uncertainty and the sizing mechanism point the same way without anyone having to adjudicate the terminal margin.
Invalidation. Four hard, falsifiable tests, three of them dated: 1. 12-month subscription backlog growth falling below revenue growth. It is +15.5% against +13.5% — the only name in the cluster where the leading indicator is ahead. If that inverts, the central positive fact about Workday is gone. 2. FY27 subscription guidance cut from $9.925–9.950bn. Reported ~late Aug and ~late Nov 2026. 3. Gross revenue retention below 97% — disclosed annually, next ~late Feb 2027. It has already gone 98% → 97%, and it is the only retention metric Workday still publishes (Research §4). 4. GAAP operating margin failing to pass 15% within four quarters. It is 13.3% with +4.1pp of clean YoY expansion. This is the direct test of the terminal-margin assumption that decides the whole verdict.
What does not constitute invalidation: - A quarter with restructuring charges. "Restructuring" mentions went 0 → 12 → 24 across three 10-Ks, so further charges are the base case, not a surprise. They are already treated as recurring in the margin analysis. - A GAAP EPS shortfall driven by SBC. SBC is 17% of revenue and 226% of GAAP operating income by construction. The GAAP EPS line is a residual of that, not a signal. - A fall in "other income." It has already dropped $64m → $17m because cash went to buybacks. That is the buyback partly self-funding its own accretion (~$0.18 of annual EPS), and it is arithmetic, not deterioration.