Bristol-Myers Squibb Co. (BMY)
Update 2/27/2017: BMY rose continually after earnings were published, moving beyond the breakeven point.
Shares rose by 18.2% over 33 days, or a +201% annual rate. Tye optons position produced a 43.8% loss on debit for a -484% annual rate.
BMY publishes earnings on Thursday before the opening bell.
I shall use the MAR series of options, which trades for the last time 51 days hence, on March 17.
Implied volatility stands at 29%, which is 2.7 times the VIX, a measure of the volatility of the S&P 500 index.
BMY’s IV stands in the 50th percentile of its annual range and the 34th percentile of its most recent broad movement.
The price used for analysis was $49.50.
The premium is 52% of the width of the position’s wings.
The risk/reward ratio is 0.9:1.
Decision for My Account
I have entered a position on BMY as described above. The stock at the time of entry was priced at $49.46.
By Tim Bovee, Portland, Oregon, Jan. 25, 2017