It wasn’t suppose to go this way for Micheal Dell, CEO of Dell (DELL, $21.69, up $0.20). Since returning to the company he founded, Mr. Dell has seen the stock price fall from $31 to a low of $18 in April.

Despite expanding dealer outlets for its computers with deals like Best Buy (BBY, $44.00, up $0.75), Dell appears to be fading in the race to get in the consumer’s face. Not only is Dell losing market share to Apple (AAPL, $187.01, up $0.58) and Hewlett-Packard (HPQ, $46.52, up $0.82) but it recently got hit with some nasty news. Just this week a judge ruled against the company saying it engaged in “fraud, false advertising, deceptive business and abusive debt collection practices.”

Dell is expected to report earnings after the bell today and Wall Street is not looking for much out of the company. Although sales may show an increase of about a billion from roughly $15 to $16 billion for the quarter when compared to last year’s first quarter, analysts are expecting $0.34 a share which would only match the year-ago quarter.

Again, the thing that will most likely move Dell is what guidance it gives. If Dell’s sales and earnings guidance are weak and they show they are losing market share then it could be an ugly open come Friday. Even if Dell surprises and woos Wall Street, I think we get a 5-10% move either way.

Playing earnings is a risky game but a lot of option traders do it. Trading in the June 22 calls (DLQFV, $0.78, up $0.07) is brisk with over 9,000 contracts traded. The June 20 puts (DLYRD, $0.24, down $0.02)have traded nearly 5,000 contracts. Judging by the call/ put ratio, traders are expecting a good report. If you take a look at Dell’s option chain you will notice the options are available in $1 increment strike prices. Not unusual but rare.

I’ll revisit Dell on Friday and we will see how these options fared.

Rick Rouse