FB Analysis

Facebook Inc. (FB)

Update 2/7/2017: FB reached its target price and I exited for a profit. 

Shares declined b7 0.6% over six das, or a -36% annual rate. The options position produced a 33.3% yield on debit for a +2,028% annual rate.


FB publishes earnings on Wednesday after the closing bell.

I shall use the MAR series of options, which trades for the last time 44 days hence, on March 17.

Implied volatility stands at 30%, which is 2.6 times the VIX, a measure of the volatility of the S&P 500 index.

FB’s IV stands in the 55th percentile of its annual range and the 87th percentile of its most recent broad movement.

The price used for analysis was $132.68.

Premium: $9.12 MAR iron fly
FB   Odds Delta
Long 150.00 91.7% 10
Break-even 139.12
Short 130.00 43.1% 61
Short 130.00 57.2% 39
Break-even 120.88
Long 115.00 90.5% 8

The premium is 52% of the width of the position’s wings.

The risk/reward ratio is 1.2:1.

Decision for My Account

I have entered a position on FB as described above. The stock at the time of entry was priced at $132.74.

By Tim Bovee, Portland, Oregon, Feb. 1, 2017

3 thoughts on “FB Analysis

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