Ambarella Inc. (AMBA)
Update 6/9/2017; AMBA gapped to the downside after earnings were published and declined only slightly more over the next two days, when I exited for a loss.
Shares declined by 12.5% over the three days, or a -1,523% annual rate. Tye options position produced a 35.4% loss on debit for a -4,306% annual rate.
AMBA publishes earnings on Tuesday after the closing bell.
I shall use options that trade for the last time 10 days hence, on June 16.
Implied volatility stands at 51%, which is 4.9 times the VIX, a measure of the volatility of the S&P 500 index.
AMBA’s IV stands in the 65th percentile of its annual range and the 96th percentile of its most recent broad movement.
The price used for analysis was $60.01.
The premium is 47% 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 AMBA as described above. The stock at the time of entry was priced at $60.03.
By Tim Bovee, Portland, Oregon, June 6, 2017