I entered a position on JWN timed to coincide with an earnings announcement.
I placed an order to exit BP at my target price, but it has not yet been filled. If it should be filled by the closing bell, I shall update Outcomes this afternoon.
By Tim Bovee, Portland, Oregon, Feb. 23, 2017
Nordstrom Inc. (JWN)
Update 3/13/2017: JWN rose for two days after earnings were published, traded in a range for our days and then worked its way lower. I exited at my target price of 25% of maximum potential profit with the share price near the price of the pre-earnings close.
Shares declined by 1.8% over 18 days, or a -37% annual rate. The options position produced a 33.3% yield on debit for a 674% annual rate.
JWN publishes earnings on Thursday after the closing bell.
I shall use the APR series of options, which trades for the last time 57 days hence, on April 21.
Implied volatility stands at 48%, which is 4.1 times the VIX, a measure of the volatility of the S&P 500 index.
JWN’s IV stands in the 72nd percentile of its annual range and the 71st percentile of its most recent broad movement.
I shall analyze JWM as a potential earnings play, and I’m attempting to exit BP at my target price.
By Tim Bovee, Portland, Oregon, Feb. 23, 2017
Out of four possible prospects, only JWN has sufficiently high liquidity and implied volatility to warrant further analysis.
BIDU and COG have low implied volatility relative to both the annual range and the most recent broad movement. HPE has insufficient liquidity on its options grid.
I intend to analyze JWN on Thursday as a potential earnings play. I’ll monitor BIDU, COG and HPE and shall resurrect any that become viable during the day. Otherwise, they’re off my prospects list.
By Tim Bovee, Portland, Oregon, Feb. 22, 2017
Range Resources Corp. (RRC)
Update 3/6/2017: RRC continued an ongoing decline to below the zone of profitability after earnings were published. A gap up this morning provided an opportunity to get out at 6.4% of maximum potential profit, well below my 25% profit. However, with expiration approaching, I was content to end the trade in the black.
Shares declined by 5.9% over 12 days, or a -179% annual rate. The options positon produced a 6.9% yield on debit for +209% annual rate.
RRC publishes earnings on Wednesday after the closing bell.
I shall use the MAR series of options, which trades for the last time 23 days hence, on March 17. The APR series options, trading for the first time today, were too illiquid for my taste.
Implied volatility stands at 45%, which is !0 times the VIX, a measure of the volatility of the S&P 500 index.
RRC’s IV stands in the 17th percentile of its annual range and the 89th percentile of its most recent broad movement.
Tesla Inc. (TSLA)
TSLA publishes earnings on Wednesday after the closing bell.
I shall use the APR series of options, which trades for the last time 58 days hence, on April 21.
Implied volatility stands at 46%, which is 3.9 times the VIX, a measure of the volatility of the S&P 500 index.
TSLA’s IV stands in the 41st percentile of its annual range and at the peak of its most recent broad movement.
Two of my prospects, RRC and TSLA, have sufficiently high implied volatility to qualify for further analysis and possibly trades.
Their APR-series options are trading for the first time today. Although open interest remains lower than I like, I shall bend the rules to open a trade, given the rapid growth of options liquidity for the series.
The third prospect, LB, has IV that remains a bit short of where it needs to be to support a trade. I’ll continue to monitor it during the day, but if IV is unimproved, then I won’t do further analysis.
By Tim Bovee, Portland, Oregon, Feb. 22, 2017
Newly minted APR-series options grids have been added to several symbols that are publishing earnings for acton on Wednesday. They are TSLA, RRC and LB. The options expiring in April are my preferred vehicle at present.
None of the APR grids show any open interest as of yet. TSLA has the highest share volume of the three and so is most likely to be tradable. I shall make a final decision on analysis of the three prospects after the opening bell.
By Tim Bovee, Portland, Oregon, Feb. 21, 2017
Implied volatility on TJX rose sufficiently during the day to support analysis and a trade.
I have an order in to exit BP at my target price.
However, it has not yet been filled and appears unlikely to be. None the less, I shall leave the order active and, if it is filled, update Outcomes after the closing bell.
By Tim Bovee, Portland, Oregon, Feb. 21, 2017
You must be logged in to post a comment.