PNC Analysis

The PNC Financial Services Group Inc. (PNC)

PNC publishes earnings on Thursday before the opening bell.

I shall use the MAY series of options, which trades for the last time 37 days hence, on May 19.

Implied volatility stands at 27%, which is 1.8 times the VIX, a measure of the volatility of the S&P 500 index.

PNC’s IV stands in the 43rd percentile of its annual range and the 99th percentile of its most recent broad movement.

The price used for analysis was $116.96.

Premium: $6.80 Expire OTM  
PNC – iron fly Strike Odds Delta
Calls
Long 130.00 92.8% 8
Break-even 121.80
Short 115.00 44.3% 59
Puts
Short 115.00 56.3% 40
Break-even 108.20
Long 105.00 86.1 12

The premium is 90% of the width of the position’s wings.

The risk/reward ratio is 1.2:1.

Decision for My Account

I am passing on this trade. It’s hard to set up a reasonable trade structure because the strikes are $5 apart on a low-priced stock compared to many.

By Tim Bovee, Portland, Oregon, April 12, 2017

One thought on “PNC Analysis

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