PM Analysis

Philip Morris International Inc. (PM)

Update 7/20/2017:  PM fell sharply after earnings were published. I exited at 39.6% of maximum potential profit.

Shares declined by 0.5% over three days, or a -56% annual rate. The options position produced a 65.9% yield on debit for a +7,992% annual rate

PM publishes earnings on Thursday before the opening bell.

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

Implied volatility stands at 22%, which is 2.3 times the VIX, a measure of the volatility of the S&P 500 index.

PM’s IV stands in the 66th percentile of its annual range and the peak of its most recent broad movement.

The price used for analysis was $119.09.

Premium: $3.38 Expire OTM  
PM-iron fly Strike Odds Delta
Long 126.00 92.3% 8
Break-even 122.38
Short 119.00 50.8% 51
Short 119.00 49.2% 49
Break-even 115.38
Long 112.00 89.1% 10

The premium is 48% 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 PM as described above. The stock at the time of entry was priced at $119.09.

By Tim Bovee, Portland, Oregon, July 17, 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.

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

3 thoughts on “PM Analysis

Leave a Reply

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

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

Google+ photo

You are commenting using your Google+ 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 )

Connecting to %s