FHN Analysis

First Horizon National Corp. (FHN)

FHN publishes earnings on Friday before the opening bell.

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

Implied volatility stands at 25%, which is 2.5 times the VIX, a measure of the volatility of the S&P 500 index.

FHN’s IV stands in the 52nd percentile of its annual range and the 48th percentile of its most recent broad movement.

The price used for analysis was $17.40.

Premium: $0.65 Expire OTM  
FHN-iron fly Strike Odds Delta
Long 18.00 78.3% 23
Break-even 17.65
Short 17.00 34.6% 68
Puts
Short 17.00 69.1% 29
Break-even 15.65
Long 15.00 93.3% 6

The premium is 43% of the width of the position’s wings.

The risk/reward ratio is 2.1:1.

Decision for My Account

The iron fly above is the best that can be built off of the FHN options grid, and it’s unusable. The deltas for the shorts are far higher than I can use; the goal for the shorts is close deltas of 50 on both. Moreover, the grid has deteriorated, and there are no longer any bids on puts with strikes lower than 17, my short leg. Given those flaws, I am passing on FHN.

 

By Tim Bovee, Portland, Oregon, July 13, 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.

One thought on “FHN Analysis

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s