Qualcom Inc. (QCOM)
Update 4/20/2017: QCOM declined after earnings were published but remained well within the zone of profitability. I exited at 45.6% of maximum potential profit.
Shares declined by 1.8% over one day, or a -640% annual rate. The options position produced an 84.0% yield on debit for a +30,649% annual rate.
QCOM publishes earnings on Wednesday after the closing bell.
I shall use the APR monthlies options, which trades for the last time two days hence, on April 21.
Implied volatility stands at 34%, which is 2.4 times the VIX, a measure of the volatility of the S&P 500 index.
QCOM’s IV stands in the 85th percentile of its annual range and at the top of its most recent broad movement.
The price used for analysis was $52.47.
The premium is 54% of the width of the position’s wings.
The risk/reward ratio is 0.8:1.
Decision for My Account
The stock at the time of entry was priced at $52.50.
By Tim Bovee, Portland, Oregon, April 19, 2017