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.

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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.

Premium:	$2.41	Expire OTM
QCOM-iron fly	Strike	Odds	Delta
Calls
Long	57.00	91.1%	10
Break-even	54.91
Short	52.50	51.45	51
Puts
Short	52.50	48.6%	49
Break-even	50.09
Long	48.00	88.6%	10

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