URI Analysis

United Rentals Inc. (URI)

Update 7/20/2017: URI gapped upward after earnings were published. I exited at 25.0% of maximum potential profit.

Shares rose by 4.2% over three days, or a +507.1% annual rate. The options position produced a 33.3% yield on debit for a +4,049% annual rate.

URI 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 44%, which is 4.5 times the VIX, a measure of the volatility of the S&P 500 index.

URI’s IV stands in the 65th percentile of its annual range and the peak of its most recent broad movement.

The price used for analysis was $118.21.

Premium: $8.09 Expire OTM  
URI-iron fly Strike Odds Delta
Long 135.00 92.2% 9
Break-even 127.09
Short 119.00 54.6% 49
Short 119.00 45.5% 51
Break-even 111.09
Long 103.00 88.9% 9

The premium is 51% of the width of the position’s wings.

The risk/reward ratio is 1:1.

Decision for My Account

I have entered an order on URI as described above. The stock at the time of entry was priced at $118.16.

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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