BBRY Analysis

BlackBerry Ltd. (BBRY)

Update 6/26/2017: BBRY gapped sown sharply after earnings were published and continued to trade low the day after. I exited at 3% of maximum potential profit.

Shares declined by 8.0% over four days, or a -726% annual rate. The options position produced a 3.1% yield on debit for a +279% annual rate.


BBRY publishes earnings on Friday before the opening bell.

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

Implied volatility stands at 63%, which is 6.1 times the VIX, a measure of the volatility of the S&P 500 index.

BBRY’s IV stands at the peak of its annual range and the 97th percentile of its most recent broad movement.

The price used for analysis was $10.97.

Premium: $1.01 Expire OTM  
BBRY-iron fly Strike Odds Delta
Long 13.00 88.7 14
Break-even 12.01
Short 11.00 54.3% 51
Puts
Short 11.00 46.0% 49
Break-even 10.01
Long 9.00 88.2% 9

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 BBRY as described above. The stock at the time of entry was priced at $10.95.

By Tim Bovee, Portland, Oregon, June 22, 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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