XOM Analysis

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.

Premium: $3.79 MAR iron fly
XOM   Odds Delta
Calls
Long 90.00 90.3% 11
Break-even 86.29
Short 82.50 36.6% 67
Puts
Short 82.50 61.4% 36
Break-even 78.71
Long 75.00 92.2% 7

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

2 thoughts on “XOM Analysis

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s