AKAM Analysis

Akamai Technologies Inc. (AKAM)

AKAM publishes earnings on Tuesday after the closing bell.

I shall use options that trade for the last time 10 days later, on Aug. 4.

Implied volatility stands at 44%, which is 4.8 times the VIX, a measure of the volatility of the S&P 500 index.

AKAM’s IV stands in the 80th percentile of its annual range and the 82nd percentile of its most recent broad movement.

The price used for analysis was $52.30.

Premium: $3.30 Expire OTM  
AKAM-iron fly Strike Odds Delta
Long 60.00 89.6% 13
Break-even 112.50
Short 52.50 53.2% 51
Short 52.50 46.9% 49
Break-even 48.30
Long 45.00 86.1% 11

The premium is 3.3-0% of the width of the position’s wings.

The risk/reward ratio is 1.3:1.

Decision for My Account

AKAM’s grid lacks the granularity I need for the long calls and the liquidity I need for the short puts, pushing the risk/reward ratio above my 1.2:1 limit. I’m passing on he trade.

By Tim Bovee, Fukuoka, Japan, July 25, 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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