NetApp Inc. (NTAP)
Update 5/25/2017: NTAP rose after earnings were published, and I exited at 47.1% of maximum potential profit.
Shares rose by 0.4% over one day, or a +143% annual rate. The options position produced an 89.2% yield on debit for a +32,539% annual rate.
NTAP publishes earnings on Wednesday after the closing bell.
I shall use the series of monthly options that trade for the last time nine days hence, on June 2.
Implied volatility stands at 36%, which is 3.4 times the VIX, a measure of the volatility of the S&P 500 index.
NTAP’s IV stands in the 53rd percentile of its annual range and the 79th percentile of its most recent broad movement.
The price used for analysis was $39.56.
The premium is 49% of the width of the position’s wings.
The risk/reward ratio is 1:1.
Decision for My Account
I have entered an order on NTAP as described above. The stock at the time of entry was priced at $39.60
By Tim Bovee, Portland, Oregon, May 24, 2017