salesforce.com inc. (CRM)
Update 3/8/2017: CRM rose sharply after earnings were published, staying in a sideways pattern long enough for time decay and falling implied volatility to produce sufficient profit for an exit, at 24.9% of maximum potential profit.
Shares rose by 11.0% over eight days, or a +499% annual rate. Tue options positon produced a 36.0% yield on debit for a +1,640% annual rate
CRM publishes earnings on Tuesday after the closing bell.
I shall use the APR series of options, which trades for the last time 52 days hence, on April 21.
Implied volatility stands at 34%, which is 2.7 times the VIX, a measure of the volatility of the S&P 500 index.
CRM’s IV stands in the 64th percentile of its annual range and the 60th percentile of its most recent broad movement.
The price used for analysis was $81.01.
| Premium: | $6.58 | Expire OTM | iron fly |
| CRM | Odds | Delta | |
| Calls | |||
| Long | 95.00 | 91.5% | 11 |
| Break-even | 89.08 | ||
| Short | 82.50 | 58.5% | 46 |
| Puts | |||
| Short | 82.50 | 41.6% | 54 |
| Break-even | 75.92 | ||
| Long | 67.50 | 92.2% | 6 |
The premium is 48% of the width of the position’s wings.
The risk/reward ratio is 1.3:1.
Decision for My Account
I have entered a position on CRM as described above. The stock at the time of entry was priced at $80.98.
By Tim Bovee, Portland, Oregon, Feb. 28, 2017
Tim Bovee, Private Trader 
[…] entered five new positions timed to coincide with earnings announcements: BBY, LOW, CRM and […]
LikeLike
[…] have placed an order to exit CRM at my target price, but it has not yet been […]
LikeLike
[…] order to exit CRM at my target price has not yet been filled. If it should be, I shall update Outcomes after the […]
LikeLike
[…] am attempting to exit CRM at my target price, but the order has not been filled. I shall leave it active until the closing […]
LikeLike
[…] entered exit orders at my target prices on CRM and CIEN, but neither has been filled […]
LikeLike
[…] placed exit orders on my ADSK, CRM and CIEN positions. None has been filled. If any are, I shall update Outcomes after the closing […]
LikeLike
[…] order to exit CRM was filled about half an hour before the closing bell. I have updated the analysis with the […]
LikeLike