Oasis Petroleum Inc. (OAS)
OAS publishes earnings on Monday after the closing bell.
I shall use the series of monthly options that trade for the last time 32 days hence, on June 16.
Implied volatility stands at 53%, which is 5.2 times the VIX, a measure of the volatility of the S&P 500 index.
OASIS’s IV stands in the 32nd percentile of its annual range and the 70th percentile of its most recent broad movement.
The price used for analysis was $12.02.
The premium is 50% of the width of the position’s wings.
The risk/reward ratio is 1.4:1.
Decision for My Account
I am passing on OAS. The grid forces me to assume a higher risk/reward ratio than I like when using the iron fly structure. I prefer to keep it at 1.2:1 or better.
By Tim Bovee, Portland, Oregon, May 15, 2017