CSIQ Analysis

Canadian Solar Inc. (CSIQ)

Update 6/6/2017: CSIQ opened low after earnings were published and then rose back to near the prior day’s close, with falling volatility allowing me to exit near my target, at 24.8% of maximum potential profit.

Shares showed a net rise during the day I held the position of 0.1%, or a +43% annual rate. The options position produced a +33.0% yield on debit for a +12,028% annual rate.

CSIQ publishes earnings on Tuesday before the opening bell.

I shall use options that trade for the last time 11 days hence, on June 16.

Implied volatility stands at 59%, which is six times the VIX, a measure of the volatility of the S&P 500 index.

CSIQ’s IV stands in the 26th percentile of its annual range and the 77th percentile of its most recent broad movement.

The price used for analysis was $12.72.

Premium: $1.17 Expire OTM  
CSIQ-iron fly Strike Odds Delta
Long 15.00 90.2% 12
Break-even 13.67
Short 12.50 47.7% 58
Short 12.50 52.4% 42
Break-even 11.17
Long 10.00 92.5% 6

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 CSIQ as described above. The stock at the time of entry was priced at $12.72.

By Tim Bovee, Portland, Oregon, June 5, 2017


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