CSX Corp. (CSX)
Update 4/20/2017: CSX gapped sharply higher after earnings were published. I exited for a loss.
Shares rose by 6.7% over one day, or a +2,458% annual rate. The options position produced a -46.5% loss on debit for a -16,974% annual rate
CSX publishes earnings on Wednesday after the closing bell.
I shall use the MAY series of options, which trades for the last time 30 days hence, on May 19.
Implied volatility stands at 35%, which is 2.5 times the VIX, a measure of the volatility of the S&P 500 index.
CSX’s IV stands in the 75th percentile of its annual range and the 64th percentile of its most recent broad movement.
The price used for analysis was $47.15.
The premium is 52% of the width of the position’s wings.
The risk/reward ratio is 0.9:1.
Decision for My Account
The stock at the time of entry was priced at $47.08.
By Tim Bovee, Portland, Oregon, April 19, 2017