CSX Analysis

CSX Corp. (CSX)

Update 7/24/2017: CSX gapped downward by about $1.50 after earnings were published and declined further that day, then entered a sideways movement. I exited as expiration approached.

Shares declined by 6.1% over 10 days, or a -222% annual rate. The options position produced a -27.4% loss on debit for a -1,000% annual rate.

CSX publishes earnings on Tuesday after the closing bell.

I shall use options that trade for the last time 10 days later, on July 28.

Implied volatility stands at 34%, which is 3.5 times the VIX, a measure of the volatility of the S&P 500 index.

CSX’s IV stands in the 71st percentile of its annual range and the 84th percentile of its most recent broad movement.

The price used for analysis was $55.15.

Premium: $2.28 Expire OTM  
CSX-iron fly Strike Odds Delta
Long 60.00 92.6% 8
Break-even 57.28
Short 55.00 49.4% 53
Short 55.00 50.4% 47
Break-even 52.28
Long 50.00 89.6% 9

The premium is 46% of the width of the position’s wings.

The risk/reward ratio is 1.2:1.

Decision for My Account

I have entered an order on CSX as described above. The stock at the time of entry was priced at $2.28.

By Tim Bovee, Portland, Oregon, July 14, 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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