SINA Corp. (SINA)
Update 5/17/2017: SINA gapped sharply to the upside immediately after earnings were published, retracing a portion of the rise the day after, allowing for a slightly improved, although still losing, exit at a $10.20 debit.
Shares showed a net rise of 7.6% over two days, or a +1,395% annual rate. The options position produced a -37.9% loss on debit for a -6,924% annual rate.
SINA publishes earnings on Tuesday before the opening 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 41%, which is four times the VIX, a measure of the volatility of the S&P 500 index.
SINA’s IV stands in the 57th percentile of its annual range and at the peak of its most recent broad movement.
The price used for analysis was $83.10.
The premium is 56% 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 SINA as described above. The stock at the time of entry was priced at $83.12.
By Tim Bovee, Portland, Oregon, May 15, 2017