HTZ Analysis

Hertz Global Holdings Inc. (HTZ)

Update 3/22/2017HTZ shares rose sharply after earnings were published stayed high until March 17 and then began to fall sharply, exceeding my target profit of 25% of maximum potential profit. I exited.

Shares showed a net declined of 2.7% over 23 days, or a 42% annual rate. The optons position produced a 49.8% yield on debit for a +790% annual rate.


 

HTZ publishes earnings on Monday after the closing bell.

I shall use the APR series of options, which trades for the last time 53 days hence, on April 21.

Implied volatility stands at 79%, which is 6.7 times the VIX, a measure of the volatility of the S&P 500 index.

HTZ’s IV stands in the 91st percentile of its annual range and the 86th percentile of its most recent broad movement.

The price used for analysis was $19.89.

Premium: $3.97 Expire OTM iron fly
HTZ   Odds Delta
Calls
Long 27.50 92.5% 12
Break-even 21.47
Short 17.50 36.2% 73
Puts
Short 17.50 64.5% 26
Break-even 13.53
Long 12.50 93.0% 4

The premium is 53% of the width of the position’s wings.

The risk/reward ratio is 1.5:1.

Decision for My Account

The $2.50 interval between strike prices on such a low-priced stock and the consequent loss of granularity makes the structure a bit uneven.

I have entered a position on HTZ as described above, dropping the premium by three cents in order to obtain a fill.. The stock at the time of entry was priced at $19.97.

By Tim Bovee, Portland, Oregon, Feb. 27, 2017

2 thoughts on “HTZ Analysis

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