Jack in the Box Inc. (sym)
Update 5/17/2017: JACK gapped sharply to the upside and then retraced part of the rise. I exited for a loss with a debit of $9.50.
Shares produced a net rise of 7.6% over a day, or a +2,789% annual rate. The options position produced a -24.7% loss on debit for a -9,029% annual rate.
JACK publishes earnings on Tuesday after the closing bell.
I shall use the series of monthly options that trade for the last time 31 days hence, on June 16.
Implied volatility stands at 37%, which is 3.6 times the VIX, a measure of the volatility of the S&P 500 index.
JACK’s IV stands in the 78th percentile of its annual range and the 91st percentile of its most recent broad movement.
The price used for analysis was $101.32.
The premium is 57% of the width of the position’s wings.
The risk/reward ratio is 1.1:1.
Decision for My Account
I have entered a position on JACK as described above. The stock at the time of entry was priced at $101.35.
By Tim Bovee, Portland, Oregon, May 16, 2017