HES Analysis

Hess Corp. (HES)

Update 7/28/2017: HES executed a series of wide swings of the $2 magnitude after earnings were published, declining, zig-zagging lower, and then recovering all it had lost and then some. I exited at 14% of maximum potential profit

Shares showed a net decline of 2.2% over my three-day holding period, or a -266% annual rate. The options position produced a 16.0% yield on debit for a +1,946.67% annual rate.

HES 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 36%, which is 3.9 times the VIX, a measure of the volatility of the S&P 500 index.

HES’s IV stands in the 44th percentile of its annual range and the 66th percentile of its most recent broad movement.

The price used for analysis was $45.24.

Premium: $2.03 Expire OTM  
HES-iron fly Strike Odds Delta
Long 49.50 90.6% 10
Break-even 95.00
Short 45.50 49.6% 53
Short 45.50 50.1% 47
Break-even 43.53
Long 41.50 90.6% 8

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 HES as described above. The stock at the time of entry was priced at $45.74.

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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