COTY Analysis

Coty Inc. (COTY)

Update 8/24/2017; COTY missed earnings expectations, coming in at $0.63 as opposed to the consensus $0.75. Shares fell $3+ and zig-zagged for two days. I exited on the third day for a loss.

Shares declined by 13.4% over three days, or a -1,631% annual rate. The options position produced a 46.8% loss for a -5,699% annual rate.


COTY publishes earnings on Tuesday before the opening bell.

I shall use options that trade for the last time 11 days hence, on Sept. 1.

Implied volatility stands at 44%, which is 3.2 times the VIX, a measure of the volatility of the S&P 500 index.

COTY’s IV stands in the 88th percentile of its annual range and at the peak of its most recent broad movement.

The price used for analysis was $19.08.

Premium: $1.41 Expire OTM  
COTY-iron fly Strike Odds Delta
Long 22.00 86.7% 16
Break-even 20.41 ~77.0% ~26
Short 19.00 50.0% 54
Puts
Short 19.00 49.8% 46
Break-even 17.41 ~77.0% ~20
Long 16.00 89.3% 8

The expected move is $1.32, within the $1.50 break-even width.

The risk/reward ratio is 1.3:1.

Decision for My Account

I have entered an order on COTY as described above. The stock at the time of entry was priced at $19.10.

By Tim Bovee, Portland, Oregon, Aug. 21, 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.

License
Creative Commons License

All content on Tim Bovee, Private Trader by Timothy K. Bovee is licensed under a Creative Commons Attribution-ShareAlike 4.0 International License.

Based on a work at www.timbovee.com.

2 thoughts on “COTY Analysis

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s