Salesforce.com Inc. (CRM)
Update 5/19/2017: CRM rose sharply after earnings were published and then fell back for a partial retracement. I exited for a debit of $3.17, or 28.8% of maximum potential profit.
Shares at exit had risen by 2.3% compared to my entry into the position the day beofre, or a +839% annual rate. The optoins position produced a 40.4% yield on debit for a +14,738% annual rate.
CRM publishes earnings on Thursday after the closing bell.
I shall use the series of monthly options that trade for the last time eight days hence, on May 26.
Implied volatility stands at 34%, which is 2.2 times the VIX, a measure of the volatility of the S&P 500 index.
CRM’s IV stands in the 61st percentile of its annual range and the 91st percentile of its most recent broad movement.
The price used for analysis was $87.62.
The premium is 49% of the width of the position’s wings.
The risk/reward ratio is 1.1:1.
Decision for My Account
I have entered an order on CRM as described above. The stock at the time of entry was priced at $87.72.
By Tim Bovee, Portland, Oregon, May 18, 2017