ORCL Analysis

Oracle Corp. (ORCL)

ORCL publishes earnings on Thursday after the closing bell.

Update 12/16/2016: ORCL gapped down sharply after exceeding earnings expectations (Go figure!), and I exited for a profit at about my normal goal for the iron fly structure; At 25% of maximum possible profit.

Shares declined by 3.96%over less than a day, for a -1,445% annual rate. The options position produced a 33.4% yield on debit for a +12,204% annual rate

I shall use the JAN series of options, which trades for the last time 36 days hence, on Jan. 20.

Implied volatility stands at 25%, which stands in the 42nd percentile of its annual range and the 90th percentile of its most recent broad movement. The price used for analysis was $40.92.

Iron condor, short the $40 calls and long the $45 calls,

short the $40 puts and long the $35 puts,

sold for a credit and expiring Jan. 21.

Probability of expiring out-of-the-money

JAN Strike OTM Δ
Calls 40 39.4% 63
Puts 40 60.0% 37

The premium is $2.19, which is 44% of the width of the position’s wings.

The risk/reward ratio is 1.3:1.

Decision for My Account

I have entered a position on ORCL as described above. The stock at the time of entry was priced at $40.93.

— Tim Bovee, Portland, Oregon, Dec. 15, 2016

2 thoughts on “ORCL Analysis

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