FDX Analysis

FedEx Corp. (FDX)

Update 3/22/2017FDX rose slightly and implied volatility declined sharply on the first trading day after earnings were published, bringing the options above my target of 25% of maximum potential profit. I exited.

Shares rose by 0.05% over one day, or a 19% annual rate. The options position produced a 27.9% yield on debit for a +10,192% annual rate


 

FDX publishes earnings on Tuesday after the closing bell.

I shall use the APR series of options, which trades for the last time 31 days hence, on April 21.

Implied volatility stands at 28%, which is 2.3 times the VIX, a measure of the volatility of the S&P 500 index.

FEX’s IV stands in the 73rd percentile of its annual range and the 91st percentile of its most recent broad movement.

The price used for analysis was $193.50.

Premium: $9.85 Expire OTM  
FDX – iron fly Strike Odds Delta
Calls
Long 210.00 87.4% 14
Break-even 204.85
Short 195.00 56.2% 47
Puts
Short 195.00 43.5% 54
Break-even 185.15
Long 175.00 86.2% 12

The premium is 56% of the width of the position’s wings.

The risk/reward ratio is 1:1.

Decision for My Account

I have entered a position on FDX as described above. The stock at the time of entry was priced at $9.85.

By Tim Bovee, Portland, Oregon, March 21, 2017

2 thoughts on “FDX Analysis

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