Kohl’s Corp. (KSS)
Update 5/11/2017: KSS zig-zagged sharply after earnings were published, ending up at my exit down 2.5%, or an annual rate of 925%. The options position produced a 45.7% yield on debit for a +16,686% annual rate.
The exit price was a $2.10 debit, or 31.4% of maximum potential profit.
KSS publishes earnings on Thursday before the opening bell.
I shall use the series of weekly options that trade for the last time nine days hence, on May 19.
Implied volatility stands at 48%, which is 4.8 times the VIX, a measure of the volatility of the S&P 500 index.
KSS’s IV stands in the 78th percentile of its annual range and the 90th percentile of its most recent broad movement.
The price used for analysis was $40.41.
The premium is 53% of the width of the position’s wings.
The risk/reward ratio is 1:1.
Decision for My Account
I have entered a position on KSS as described above. The stock at the time of entry was priced at $40.45.
By Tim Bovee, Portland, Oregon, May 10, 2017