QVC Group (QVCA)
QVCA 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 49%, which is 4.2 times the VIX, a measure of the volatility of the S&P 500 index.
QVCA’s IV stands in the 73rd percentile of its annual range and the 72nd percentile of its most recent broad movement.
The price used for analysis was $19.81.
|Premium:||$2.05||Expire OTM||iron fly|
The premium is 29% of the width of the position’s wings.
The risk/reward ratio is 2.4:1.
Decision for My Account
I normally aim for premium at half the width of the wings and a risk reward ratio of 1:1. This grid won’t allow me to get close to those metrics, and so I am passing on the trade.
By Tim Bovee, Portland, Oregon, Feb. 27, 2017