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.

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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.

Premium:	$6.33	Expire OTM
SINA-iron fly	Strike	Odds	Delta
Long	95.00	88.7%	14
Break-even	68.83
Short	62.50	48.7%	56
Puts
Short	62.50	50.8%	44
Break-even	78.83
Long	72.50	72.5	12

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