IONS Analysis

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
IONS   Odds Delta
Calls
Long 60.00 90.1% 14
Break-even 52.95
Short 45.00 51.14 58
Puts
Short 45.00 47.7% 42
Break-even 37.05
Long 27.00 90.9% 5

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

3 thoughts on “IONS Analysis

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