SJM Smucker Co. (SJM)
Update 6/8/2017: SJM gapped sharply higher after earnings were published and then fell below its pre-earnings close I exited on the the way down slightly above my entry price, at 36% of maximum potential profit.
Shares showed a net increase of 0.6% from my entry to exit the next day, or a 210% annual rate. The options position produced a 56.4% yield on debit for a +20,566% annual rate.
SJM publishes earnings on Thursday before the opening bell.
I shall use options that trade for the last time nine days hence, on June 16.
Implied volatility stands at 24%, which is 2.3 times the VIX, a measure of the volatility of the S&P 500 index.
SJM’s IV stands in the 59th percentile of its annual range and in the 96th percentile of its most recent broad movement.
The price used for analysis was $129.94.
The premium is 51% 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 SJM as described above. The stock at the time of entry was priced at $130.12.
By Tim Bovee, Portland, Oregon, June 7, 2017