The Boeing Co. (BA)

Update 7/31/2017: BA gapped upward by $23 after earnings were published and rose an additional $23 in the ensuing two trading days. I exited for a loss as expiration approached.

Shares rose by 137% over six days, or an 834% annual rate. The options position produced a -52.4% loss on debit for a -3,190% annual rate.

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BA publishes earnings on Wednesday before the opening bell.

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

Implied volatility stands at 21%, which is 2.3 times the VIX, a measure of the volatility of the S&P 500 index.

BA’s IV stands in the 49th percentile of its annual range and the 87th percentile of its most recent broad movement.

The price used for analysis was $213.06.

Premium:	$5.97	Expire OTM
BA-iron fly	Strike	Odds	Delta
Long	225.00	93.3%	7
Break-even	437.50
Short	212.50	48.1%	53
Puts
Short	212.50	52.0%	47
Break-even	205.97
Long	200.00	91.1%	8

The premium is 48% 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 BA as described above. The stock at the time of entry was priced at $213.24.

By Tim Bovee, Fukuoka, Japan, July 25, 2017

Disclaimer

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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