Regions Financial Corp. (RF)
Update 4/25/2017: RF whipsawed for a slight decline after earnings were published and then declined the day thereafter, then reversed to the upside, allowing at exit at my target of 25% of maximum potential profit.
Shares rose by 0.7% over eight days, or a +31% annual rate. The options position produced a 33.3% yield on debit for a +1,521% annual rate.
RF publishes earnings on Tuesday before the opening bell.
I shall use the MAY series of options, which trades for the last time 32 days hence, on May 19.
Implied volatility stands at 36%, which is 2.4 times the VIX, a measure of the volatility of the S&P 500 index.
RF’s IV stands in the 35th percentile of its annual range and the 96th percentile of its most recent broad movement.
The price used for analysis was $13.88.
The premium is 50% 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 RF as described above. The stock at the time of entry was priced at $13.90.
By Tim Bovee, Portland, Oregon, April 17, 2017