Nordstrom Inc. (JWN)
Update 3/13/2017: JWN rose for two days after earnings were published, traded in a range for our days and then worked its way lower. I exited at my target price of 25% of maximum potential profit with the share price near the price of the pre-earnings close.
Shares declined by 1.8% over 18 days, or a -37% annual rate. The options position produced a 33.3% yield on debit for a 674% annual rate.
JWN publishes earnings on Thursday after the closing bell.
I shall use the APR series of options, which trades for the last time 57 days hence, on April 21.
Implied volatility stands at 48%, which is 4.1 times the VIX, a measure of the volatility of the S&P 500 index.
JWN’s IV stands in the 72nd percentile of its annual range and the 71st percentile of its most recent broad movement.
The price used for analysis was $44.61.
|Premium:||$5.05||Expire OTM||iron fly|
The premium is 58% 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 JWN as described above. The stock at the time of entry was priced at $44.59.
By Tim Bovee, Portland, Oregon, Feb. 23, 2017