QCOM Analysis


Update 7/24/2017: QCOM gapped downward after earnings were published and continued to decline for the next two days, and I exited as expiration approached.

Shares declined by -5.0% over seven days, or a -258% annual rate. The options position produced a 14.3% loss on debit for a -747.6% annual rate.

QCOM publishes earnings on Wednesday after the closing bell.

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

Implied volatility stands at 29%, which is 2.9 times the VIX, a measure of the volatility of the S&P 500 index.

QCOM’s IV stands in the 63rd percentile of its annual range and the 77th percentile of its most recent broad movement.

The price used for analysis was $56.54.

Premium: $2.33 Expire OTM  
QCOM-iron fly Strike Odds Delta
Long 61.00 91.3% 10
Break-even 58.83
Short 56.50 51.3% 51
Short 56.50 48.8% 49
Break-even 54.33
Long 52.00 88.0% 11

The premium is 52% of the width of the position’s wings.

The risk/reward ratio is 0.9:1.

Decision for My Account

I have entered an order on QCOM as described above. The stock at the time of entry was priced at $56.55.

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.

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