Exxon Mobil Corp. (XOM)
Update 2/6/2017: XOM’s price fell after earnings missed the Street estimate by a wide margin. The stock goes ex-dividend on Feb. 7, and I exited at 21.4% of the maximum potential gain to avoid the risk of early assignment.
XOM shares declined by 1.7% over seven days, or a -87% annual rate. The options positions produced a 21.4% yield on debit for a +1,417% annual rate.
XOM publishes earnings on Tuesday before the opening bell.
I shall use the MAR series of options, which trades for the last time 46 days hence, on March 17.
Implied volatility stands at 19%, which is 1.6 times the VIX, a measure of the volatility of the S&P 500 index.
XOM’s IV stands in the 18th percentile of its annual range and the 54th percentile of its most recent broad movement.
The price used for analysis was $84.51.
The premium is 50% of the width of the position’s wings.
The risk/reward ratio is 1:1.
Decision for My Account
I have entered a position on XOM as described above. The stock at the time of entry was priced at $84.54.
By Tim Bovee, Portland, Oregon, Jan. 30, 2017