WGO Analysis

Winnebago Industries Inc. (WGO)

Update 7/7/2017: WGO rose four four days after earnings were published, settling into a sideways trend thereafter. I exited a week early for a loss the day before the stock went ex-dividend, an even that increases the likelihood of exercise for in-the-money options

Shares rose by 18.4% over 17 days, or a +396% annual rate. The options position produced a -42.4% loss on debit for a -911% annual rate.

WGO publishes earnings on Wednesday before the opening bell.

I shall use options that trade for the last time 10 days hence, on June 30.

Implied volatility stands at 48%, which is 4.6 times the VIX, a measure of the volatility of the S&P 500 index.

WGO’s IV stands in the 94th percentile of its annual range and the 91st percentile of its most recent broad movement.

The price used for analysis was $29.18.

Premium: $2.89 Expire OTM  
WGO-iron fly Strike Odds Delta
Long 35.00 92.2% 10
Break-even 31.89
Short 29.00 51.0% 55
Short 29.00 49.9% 45
Break-even 25.89
Long 23.00 93.1% 5

The premium is 48% 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 WGO as described above. The stock at the time of entry was priced at $29.18.

By Tim Bovee, Portland, Oregon, June 20, 2017


Tim Bovee, Private Trader tracks the analysis and trades of a private trader for his own accounts. Nothing in this blog constitutes a recommendation to buy or sell stocks, options or any other financial instrument. The only purpose of this blog is to provide education and entertainment.

No trader is ever 100 percent successful in his or her trades. Trading in the stock and option markets is risky and uncertain. Each trader must make trading decisions for his or her own account, and take responsibility for the consequences.

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