Kratos Defense & Security Solutions, Inc. (KTOS) Probability Analysis
Probability analysis extracts the risk-neutral probability distribution implied by option prices. It shows the market-implied likelihood of the underlying reaching various price levels by expiration.
Kratos Defense & Security Solutions, Inc. (KTOS) operates in the Industrials sector, specifically the Aerospace & Defense industry, with a market capitalization near $9.32B, listed on NASDAQ, employing roughly 4,300 people, carrying a beta of 1.07 to the broader market. Kratos Defense & Security Solutions, Inc. Led by Eric DeMarco, public since 1999-11-05.
Snapshot as of Jul 13, 2026.
- Spot Price
- $46.74
- ATM IV
- 80.7%
- IV Rank
- 72.6%
- IV Percentile
- 77.4%
- HV 20-Day
- 69.1%
- IV Skew 25Δ
- 0.019
As of Jul 13, 2026, Kratos Defense & Security Solutions, Inc. (KTOS) at $46.74 has an ATM IV of 80.7%, implying a 30-day one-standard-deviation range of approximately ±$10.82. IV rank is 72.6% (elevated, distribution priced wider than typical). IV percentile is 77.4%. The 25-delta skew is +0.019: roughly symmetric wings. Under lognormal assumptions roughly 68% of outcomes fall within ±1σ and 95% within ±2σ; risk-neutral probability analysis refines this by extracting the market-implied distribution directly from options prices, capturing the fat tails that real markets exhibit.
How KTOS probability analysis Data Feeds Strategy Selection
Strategy selection on Kratos Defense & Security Solutions, Inc. options does not derive from any single metric in isolation. The probability analysis view above sits inside a broader read: ATM IV currently sits at 80.7% and dealer gamma exposure is negative, so dealer hedging amplifies directional moves. Combine the probability analysis data here with the volatility-skew surface, dealer-gamma exposure, max-pain level, and upcoming-events calendar to build a positioning thesis. Risk-defined structures (credit spreads, debit spreads, iron condors) are usually safer than naked positions while the regime is uncertain; the data on this page anchors the inputs but does not by itself constitute a trade thesis.
How to read the KTOS probability distribution
The probability cone above is the option-market-implied distribution of where Kratos Defense & Security Solutions, Inc. spot could end up at expiration. It's derived from the implied-volatility surface via a risk-neutral pricing transformation, not from historical realized returns. With ATM IV at 80.7% and spot at $46.74, the 1σ band is approximately ±27.9% over a 30-day horizon. Recent realized HV-20 of 69.1% runs 11.6 vol points below the current implied, suggesting the chain is pricing more dispersion than the underlying has been delivering.
KTOS risk-neutral vs real-world probabilities
The probabilities derived from option prices reflect the market's risk-adjusted view, not the realized statistical distribution. Risk-neutral probabilities include the equity risk premium and skew preferences priced into options, so they tend to overstate tail probability and understate upside drift relative to actually-realized outcomes. For probability-of-touch calculations and assignment-risk modeling, risk-neutral is the right benchmark. For position-sizing your own conviction, blend with realized-volatility-based statistics from the HV columns.
Trading the KTOS distribution
Probability-driven strategies aim to capture mispricings between the implied distribution and your own probability assessment. Premium-selling structures (credit spreads, iron condors, cash-secured puts) profit when the implied distribution overprices tail probability relative to realized; premium-buying (debit spreads, long calls/puts, long straddles) profits in the reverse. With KTOS IV rank at 72.6%, the chain is pricing fatter tails than recent realized history; sellers earn the gap on average. Always pair probability-driven strategy selection with a stop loss or wing-defined risk - the implied distribution is a snapshot, and regime shifts can invalidate it intraday.
Learn how risk-neutral density is reported and how to read the data →
KTOS highest implied-volatility contracts
| Type | Strike | Expiration | Volume | OI | IV | Bid | Ask |
|---|---|---|---|---|---|---|---|
| CALL | $53.00 | Jul 17, 2026 | 389 | 169 | 90.2% | $0.25 | $0.35 |
| CALL | $55.00 | Jul 17, 2026 | 1.2K | 834 | 94.4% | $0.10 | $0.15 |
| CALL | $55.00 | Jul 17, 2026 | 1.2K | 834 | 94.4% | $0.10 | $0.15 |
| CALL | $54.00 | Jul 17, 2026 | 268 | 210 | 91.6% | $0.15 | $0.20 |
Top 4 contracts from the institutional-grade nightly options scan; ranked by iv within the broader S&P 500/400/600 + ETF universe.
Frequently asked KTOS probability analysis questions
- What is the KTOS 30-day expected price range?
- As of Jul 13, 2026, with KTOS at $46.74 and ATM IV at 80.7%, the implied 30-day one-standard-deviation range is approximately ±$10.82, or about $35.92 to $57.56. IV rank is elevated, so the priced distribution is wider than the 1-year typical width.
- What does KTOS risk-neutral density tell us?
- Risk-neutral density is the probability distribution of future KTOS price implied by listed option prices. Extracted via Breeden-Litzenberger (twice-differentiating the call price function with respect to strike), it represents the pricing kernel rather than the real-world probability of outcomes. Persistent skew or fat-tail features in the density reflect how the market is pricing tail risk.
- How does KTOS ATM IV translate to a probability range?
- ATM IV is annualized; multiplying by sqrt(t/365) scales it to the chosen tenor. Under lognormal assumptions, the resulting standard deviation defines the ±1σ band that contains roughly 68% of outcomes, ±2σ for 95%. Empirical equity returns have fatter tails than log-normal, so the implied tail probabilities under-state realized tail frequency in stressed regimes.