WBA Analysis

Walgreens Boots Alliance Inc. (WBA)

Update 6/29/2017: WBA gapped sharply upward after earnings were published and quickly dropped back close to the prior day’s final price. I exited a bit shy of my target price, judging that I now had more to lose than to win by waiting.

Shares showed a net rise of 1.2% from my entry to exit, about a day,, for a +419% annual rate. The options position produced a 21.1% yield on debit for a +7,702% annual rate.

WBA publishes earnings on Thursday before the opening bell.

I shall use options that trade for the last time nine days hence, on July 7.

Implied volatility stands at 27%, which is 2.7 times the VIX, a measure of the volatility of the S&P 500 index.

WBA’s IV stands in the 78th percentile of its annual range and the 91st percentile of its most recent broad movement.

The price used for analysis was $77.56.

Premium: $2.64 Expire OTM  
WBA-iron fly Strike Odds Delta
Long 82.00 88.1% 13
Break-even 80.14
Short 77.50 51.1 51
Short 77.50 48.9% 49
Break-even 74.64
Long 72.00 90.1% 9

The premium is 53% 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 WBA as described above. The stock at the time of entry was priced at $77.51.

By Tim Bovee, Portland, Oregon, June 28, 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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