Ionis Pharmaceuticals Inc. (IONS)
Update 3/15/2017: IONS rose sharply for three days after earnings, then fell into an equally sharp decline for five days that brought the share price below its pre-earnings level.
I exited early, at 12.5% of maximum potential profit, to avoid time risk after prices settled at that lower level. Shares showed a net decline of 10.% over 16 days, or a -247% annual rate. The options position produced a 14.4% yield on debit for a +328% annual rate
IONS publishes earnings on Tuesday before the opening 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 68%, which is 5.8 times the VIX, a measure of the volatility of the S&P 500 index.
IONS’s IV stands in the 34th percentile of its annual range and the 58th percentile of its most recent broad movement.
The price used for analysis was $45.86.
|Premium:||$7.95||Expire OTM||iron fly|
The premium is45% of the width of the position’s wings.
The risk/reward ratio is 1.3:1.
Decision for My Account
I have opened a position on IONS as described above. The stock at the time of entry was priced at $45.88.
By Tim Bovee, Portland, Oregon, Feb. 27, 2017