PVH Analysis

PVH Corp. (PVH)

Update 6/6/2017: PVH gapped sharply to the upside after earnings were published and then slow retraced about 60% of the rise. I exited at my target price, 25.0% of maximum potential profit.

Shares showed a net rise of 3.0% over the 13-day lifespan of the position, or a +85% annual rate. The options position produced a 33.3% yield on debit for a +936% annual rate.

PVH publishes earnings on Wednesday after the closing bell.

I shall use the series of monthly options that trade for the last time 23 days hence, on June 16.

Implied volatility stands at 35%, which is 3.3 times the VIX, a measure of the volatility of the S&P 500 index.

PVH’s IV stands in the 53rd percentile of its annual range and the 84th percentile of its most recent broad movement.

The price used for analysis was $100.71.

Premium: $6.76 Expire OTM  
PVH-iron fly Strike Odds Delta
Long 115.00 95.1% 6
Break-even 106.76
Short 100.00 48.5% 55
Short 100.00 51.3% 45
Break-even 91.76
Long 85.00 94.4% 4

The premium is 45% of the width of the position’s wings.

The risk/reward ratio is 1.2:1.

Decision for My Account

I have entered an order on PVH as described above. The stock at the time of entry was priced at $100.50.

By Tim Bovee, Portland, Oregon, May 24, 2017

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