ACN Analysis

Accenture Plc (ACN)

Update 6/26/2017: ACN gapped sharply to the downside after earnings were published and then continued trading within that day’s range for two trading sessions thereafter. I exited at 18.9% of maximum potential profit.

Shares fell by 2.9% over five days, or a -212% annual rate. The options position produced a 23.3% yield on debit for a +1,703% annual rate.

ACN publishes earnings on Thursday before the opening bell.

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

Implied volatility stands at 23%, which is double the VIX, a measure of the volatility of the S&P 500 index.

ACN’s IV stands in the 57th percentile of its annual range and the 85th percentile of its most recent broad movement.

The price used for analysis was $128.81.

Premium: $4.81 Expire OTM  
ACN-iron fly Strike Odds Delta
Long 136.00 91.2% 10
Break-even 131.81
Short 127.00 51.5% 50
Short 127.00 47.4% 50
Break-even 122.81
Long 118.00 87.6% 11

The premium is 53% of the width of the position’s wings.

The risk/reward ratio is 0.9:1.

Decision for My Account

I have entered an order on ACN as described above. The stock at the time of entry was priced at $126.77.

By Tim Bovee, Portland, Oregon, June 21, 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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