ORCL Analysis

Oracle Corp. (ORCL)

Update 6/23/2017: ORCL gapped $5 to the upside after earnings were published and continued to trade around that level the next day. I exited for a loss a week before the position’s options expire.

Shares showed a net rise of 9.9% over two days, or a +1,803% annual rate. The options positoin produced a -44.6% loss on debit for a -8,139% annual rate.

ORCL publishes earnings on Wednesday after the closing bell.

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

Implied volatility stands at 27%, which is 2.5 times the VIX, a measure of the volatility of the S&P 500 index.

ORCL’s IV stands at the peak percentile of both its annual range and its most recent broad movement.

The price used for analysis was $46.36.

Premium: $2.05 Expire OTM  
ORCL-iron fly Strike Odds Delta
Long 50.50 91.7% 9
Break-even 48.55
Short 46.50 53.6% 49
Puts
Short 46.50 46.4% 51
Break-even 44.55
Long 42.50 87.9% 11

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 orcl as described above. The stock at the time of entry was priced at $46.35.

By Tim Bovee, Portland, Oregon, June 21, 2017

Disclaimer

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.

License
Creative Commons License

All content on Tim Bovee, Private Trader by Timothy K. Bovee is licensed under a Creative Commons Attribution-ShareAlike 4.0 International License.

Based on a work at www.timbovee.com.

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