CGC Analysis

Canopy Growth Corp. (CGC)

Update 4/17/2019: I exited my short iron condor on CGC, 29 days after entering the position and nine days prior to mandatory exit when the options have 21 days left before they expire. The implied volatility at exit was 46. I exited for a $0.62 debit with shares at $42.86.

Shares declined 6.7%, or $3.08. during the holding period, or an 84% annual rate. The options position produced a 117.7% return, $0.73, for a +1,482% annual rate.

On March 19 I entered a short iron condor spread on CGC, using options that trade for the last time 59 days later, on May 17. The premium is a $1.35 credit and the stock at the time of entry was priced at $45.93

The implied volatility rank (IVR) at entry stood at 47.

Premium: $1.35 Expire OTM
CGC-iron condor Strike Odds Delta
Long 60.00 91.0% 13
Break-even 56.35 86.5% 18
Short 55.00 82.0% 23
Short 37.50 76.0% 17
Break-even 33.85 82.0% 12.5
Long 32.50 88.0% 8

The premium is 28% of the width of the position’s wings.

The risk/reward ratio is 2.6:1.

By Tim Bovee, Portland, Oregon, April 17, 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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