DAL Analysis

Delta Air Lines Inc. (DAL)

Update July 13, 2017: DAL moved little after earnings were published. The profit largely came from a decline in implied volatility. I exited at 24.9% of maximum potential profit.

Shares rose by 0.7% over one day, or a +256% annual rate. The options position produced a 33.1% yield on debit for a +12,081% annual rate.


DAL publishes earnings on Thursday before the opening bell.

I shall use options that trade for the last time nine days hence, on July 21.

Implied volatility stands at 31%, which is triple the VIX, a measure of the volatility of the S&P 500 index.

DAL’s IV stands in the 31st percentile of its annual range and the peek of its most recent broad movement.

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DAL Analysis

Delta Air Lines Inc. (DAL)

Update 4/27/2017DAL did a fair imitation of a yo-yo after earnings were published, rising sharply from where it began the today and then falling to near its starting point, falling further the next day and then rising to slightly beyond the post-earnings peak, and then declined again to near where the fluctuations began.

All in all, a lot of Sturm und Drang, signifying nothing. I exited at 33% of maximum potential profit.

Shares staged a net decline of 0.8% over 16 days, or a +18% annual rate. The options position produced a 49.1% yield on debit for a +1,121% annual rate.


DAL publishes earnings on Wednesday before the opening bell.

I shall use the MAY series of options, which trades for the last time 38 days hence, on May 19.

Implied volatility stands at 32%, which is 2.1 times the VIX, a measure of the volatility of the S&P 500 index.

DAL’s IV stands in the 27th percentile of its annual range and the 96th percentile of its most recent broad movement, which is in a fairly narrow range typical of DAL for the past two months.

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The Week Ahead: Prices, sales, production, Yellen on the Hill

 

Prices move to the center of economic reporting this week, the consumer price index on Friday and the producer price index on Thursday, each at 8:30 a.m. New York time.

Two other major reports punctuate the week, both on Friday: Retail sales at 8:30 a.m. and industrial production at 9:15 a.m.

Fed Chair Janet Yellen testifies twice on Capitol Hill about monetary policy, On Wednesday before the House Committee on Financial services and on Thursday before the Senate Committee on Banking, Housing and Urban Affairs. Each hearing begins at 10 a.m.

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The Week Ahead: Interest rates, prices, retail, housing, industry

The Federal Open Market Committee two-day meeting will culminate with an announcement and release of forecasts on Wednesday at 2 p.m., followed by a news conference with Chair Yellen at 2:30 p.m.

The FOMC in 2008 lowered its fed funds rate to a range of from 0.00% to 0.25% on Dec. 16, 2008, and kept it there for long valley of the Great Recession. The money regulators began raising rates seven years later, on Dec. 17, 2015, by a quarter point to 0.25% to 0.50%, and has since raised the target twice, at quarter-point intervals: On Dec. 15, 2017 to 0.50% to 0.75% and last March 16, 2017 to 0.75% to 1.00%.

If they were to raised rates at this week’s meeting, it would be the first break with one-year intervals in nine years. Will they or won’t they? And will the markets care?

Five economic reports of note will be published during the week: At 8:30 a.m., the producer price final demand index on Tuesday; the consumer price index and retail sales on Wednesday, and housing starts on Friday. The industrial production stats will be out on Thursday at 9:15 a.m.

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The Week Ahead: Employment, income, outlays, manufacturing, trade

 

In a reversal of T.S. Eliot, next week will begin with a whimper — the U.S. markets are closed on Monday for the Memorial Day holiday — and will end with a bang — the always much anticipated employment situation report, on Friday at 8:30 a.m. New York time.

The employment report will be previewed on Thursday  by the private-sector ADP employment report, out at 8:15 a.m.

Three other major reports  will be published during the week: Personal income and outlays on Monday at 8:30 a.m., the Institute of Supply Management manufacturing index on Thursday at 10 a.m. and international trade on Friday at 8:30 a.m.

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The Week Ahead: GDP, durables

The gross domestic product statistics providing a second estimate for the 1st quarter will be published on Friday at 8:30 a.m. New York time. Durable goods orders will be released concurrently.

Two real estate reports will punctuate the week: New home sales on Tuesday and the far larger existing home sales on Wednesday, each at 10 a.m.

Also out: the Purchasing Managers Institute composite flash report on Wednesday at 9:45 a.m., Federal Open Market Committee minutes from the May 2-3 meeting on Wednesday at 2 p.m. and international trade in goods on Thursday at 8:30 a.m.

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