Visa Inc. (V)
Update 2/27/2017: V stair-stepped higher after earnings were published, alternating rises with retracements in a classic movement in the direction of the primary trend.
Shares rose by 7.75 over 25 days, or a +113% annual rate. The options position produced a 40.5% loss on debit for a -592% annual rate.
V publishes earnings on Thursday after the closing bell.
I shall use the MAR series of options, which trades for the last time 43 days hence, on March 17.
Implied volatility stands at 21%, which is 1.8 times the VIX, a measure of the volatility of the S&P 500 index.
V’s IV stands in the 32nd percentile of its annual range and the 64th percentile of its most recent broad movement.
The price used for analysis was $81.85.
The premium is 55% of the width of the position’s wings.
The risk/reward ratio is 0.8:1.
Decision for My Account
I have opened a position on V as described above. The stock at the time of entry was priced at $81.83.
By Tim Bovee, Portland, Oregon, Feb. 2, 2017