AT&T Inc. (T)
Update April 26, 2017: T rose after earnings were published and remained within the zone of maximum profit. That positioning within the structure of the trade, combined with a sharp declined in implied volatility, brought me close enough to my goal to exit.
Shares rose by 0.7% over one day, or a 247% annual rate. The options position produced a 32.7% yield on debit for a +11,918% annual rate.
T publishes earnings on Tuesday after the closing bell.
I shall use the series of weekly options that trade for the last time 10 days hence, on May 5.
Implied volatility stands at 46%, which is 1.6 times the VIX, a measure of the volatility of the S&P 500 index.
T’s IV stands in the 43rd percentile of its annual range and the 96th percentile of its most recent broad movement.
The price used for analysis was $39.80.
|T iron condor||Strike||Odds||Delta|
The premium is 43% of the width of the position’s wings.
The risk/reward ratio is 1.3:1.
Decision for My Account
I have entered a position on T as decribed above. The stock at the time of entry was priced at $39.83.
By Tim Bovee, Portland, Oregon, April 25, 2017