WBA Analysis

Walgreens Boots Alliance Inc. (WBA)

Update 11/7/2018: I have exited WBA for a debit of $503 per contract, $147 greater than the credit at entry, with shares at $890.65, $6.96 higher than at entry.

Shares rose by 9.4% over 28 days, or a +123% annual rate. Tye options position produced a 29.2% loss for a -381% annual rate.

I have entered a short iron fly options spread on !S, using options that trade for the last time 37 days hence, on Nov. 16. The premium is a $3.56 credit per contract/share and the stock at the time of entry was priced at $73.60.

I made the decision to enter the trade in my account to coincide with an earnings announcement, on Thursday, Oct. 11, before the opening bell. 

The profit zone for this position is between $78.06 on the upside and $71.06 on the downside.

Implied volatility stands at 30%, which is 1.7 times the VIX, a measure of the volatility of the S&P 500 index.

WBA’s IV rank stands at 58%.

The price used for analysis was $73.74.

Premium: $3.56 Expire OTM
WBA-iron fly Strike Odds Delta
Long 77.50 74.0% 28
Break-even 76.06 74.7% 24
Short 72.50 44.0% 59
Short 72.50 56.0% 56
Break-even 71.06 74.0% 23
Long 67.50 81.0% 17

The premium is 71% of the width of the position’s wings.

The risk/reward ratio is 0,4:1, with a $144 risk against a $356 reward per contract.

The bid/ask spread was 2.3%.

By Tim Bovee, Portland, Oregon, Oct. 10, 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.

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.

21 thoughts on “WBA Analysis

Comments are closed.