EA Analysis

Electronic Arts Inc. (EA)

Update 4/26/2019: I have exited EA 21 days before its expiration, as my rules require, for a $1.27 debit, for a $0.33 profit. The share price was within the profit zone at exit, although the return, at 20.6% of maximum potential profit, fell short of my 50% target.

Shares declined by 6.0% over 21 days, or a -104% annual rate. The options positions produced a 26.0% return for a 452% annual rate.

I have entered a short iron condor spread on EA, using options that trade for the last time 42 days hence, on May 17. The premium is a $1.60 credit and the stock at the time of entry was priced at $99.75.

The profit zone for this position is between $116.60 on the upside and $76.60 on the downside.

The implied volatility rank (IVR) stands at 53.

Premium: $1.60 Expire OTM
EA-iron condor Strike Odds Delta
Long 125.00 94.0% 6
Break-even 116.60 89.0% 11.5
Short 115.00 84.0% 17
Short 85.00 86.0% 14
Break-even 76.60 90.5% 9
Long 75.00 95.0% 4

The premium is 16% of the width of the position’s wings.

The risk/reward ratio is 5.3:1.

By Tim Bovee, Portland, Oregon, April 5, 2019


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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