FAST Analysis

Fastenal Co. (FAST)

Update 7/12/2017: FAST whipsawed dramatically in the first hour of trading after earnings were published, gapping to the upside and then falling like a rock in a movement that spanned $5. I exited at 29.1% of maximum potential profit.

During the lifespan of my position, less than a day, shares declined by 0.9%, or a -319% annual rate. The options position produced a 41.1% yield on debit for a +14,991% annual rate

FAST publishes earnings on Wednesday before the opening bell.

I shall use options that trade for the last time 10 days hence, on July 21.

Implied volatility stands at 33%, which is 2.9 times the VIX, a measure of the volatility of the S&P 500 index.

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

The price used for analysis was $43.43.

Premium: $2.37 Expire OTM  
FAST-iron fly Strike Odds Delta
Long 48.00 92.3% 9
Break-even 45.37
Short 43.00 46.7% 56
Short 43.00 43.4% 44
Break-even 40.37
Long 38.00 90.8% 8

The premium is 47% 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 FAST as described above. The stock at the time of entry was priced at $43.43.

By Tim Bovee, Portland, Oregon, July 11, 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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