HAS Analysis

Hasbro Inc. (HAS)

I have rejected a short bull put spread on HAS, using options that trade for the last time 17 days hence, on Feb. 9. The bid/ask spread was very high — greater than 100% — and as a firm rule I don’t trade such illiquid assets.

Here’s the analysis that got me to that decision:

I made the decision to analyze the trade in my account based on a downtrend beginning Jan. 16 as measured by the Fisher Transform metric and a bearish rank and a negative score of -3.87% on the earnings surprise predictor from Zacks.

HAS publishes earnings on Feb. 5 before the opening bell.

Implied volatility stands at 40%, which is 3.7 times the VIX, a measure of the volatility of the S&P 500 index.

HAS’s IV stands in the 97th percentile of its annual range and the 96th percentile of its most recent broad movement.

The price used for analysis was $90.77.

Premium: $0.65 Expire OTM  
HAS-bear call vertical Strike Odds Delta
Long 94.00 69.0% 34
Break-even 91.35 63.8% 38
Short 92.00 58.5% 42

The premium is 65% of the width of the position’s wings.

The risk/reward ratio is 2.1:1.

The bid/ask spread was 146.2%. I generally don’t deal in spreads greater than 10%, and so that killed the position.

By Tim Bovee, Portland, Oregon, Jan. 23, 2018


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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