WIX publishes earnings on Wednesday before the opening bell.
I shall use the series of weekly options that trade for the last time 10 days hence, on May 19.
Implied volatility stands at 89%, which is 9.1 times the VIX, a measure of the volatility of the S&P 500 index.
WIX’s IV stands in the 94th percentile of its annual range and the 93rd percentile of its most recent broad movement.
The price used for analysis was $74.00.
The premium is 40% of the width of the position’s wings.
The risk/reward ratio is 1.5:1.
Decision for My Account
The risk/reward ratio is greater than I like, and the super-high volatility makes the minimum cost of a spread of the sort I prefer more expensive that I would like if things move against me. I am passing on the WIX trade.
By Tim Bovee, Portland, Oregon, May 9, 2017