FedEx Corp. (FDX)

Update 3/22/2017: FDX 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

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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