FedEx Corp. (FDX)

Update 3/22/2017: FDX rose slightly and implied volatility declined sharply on the first trading day after earnings were published, bringing the options above my target of 25% of maximum potential profit. I exited.

Shares rose by 0.05% over one day, or a 19% annual rate. The options position produced a 27.9% yield on debit for a +10,192% annual rate

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FDX publishes earnings on Tuesday after the closing bell.

I shall use the APR series of options, which trades for the last time 31 days hence, on April 21.

Implied volatility stands at 28%, which is 2.3 times the VIX, a measure of the volatility of the S&P 500 index.

FEX’s IV stands in the 73rd percentile of its annual range and the 91st percentile of its most recent broad movement.

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3/21 – 3:05 p.m. New York time

Today’s outcomes: I have entered positions on FDX and NKE and exited positions on CIEN, DG and WMT.

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3/20 – 3:27 p.m. New York time

My prospect, GIS, never reached sufficiently high implied volatility to support a trade. My exit order on DG has not yet been filled, although I shall leave it active until the closing  bell.

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3/18 – 10:10 a.m. New York time

The final options in my SU iron fly position expired, wrapping up the position for a loss. I have updated the analysis with results.

By Tim Bovee, Portland, Oregon, March 18, 2017

 

Big ticket purchases and the housing sales will punctuate the trading week

Durable goods orders covers purchases with a useful life of three years or more. The statistics will be published on Friday at 8:30 a.m. New York time.

The housing sales data comes in two installments: Existing homes sales, the greater part of the market, on Wednesday and new home sales on Thursday, each at 10 a.m.

Also out during the week, the Purchasing Managers Institute composite flash report on Friday at 9:45 a.m.

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3/17 – 3:10 p.m. New York time

I am wrapping up a very slow trading day: No new positions and no exits. I shall leave my two exit orders, on DG and CIEN, active until the closing bell, and shall update after the close if I get a fill on either.

SU’s official expiration is on Saturday, and I shall post results on that day.

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3/16 – 3:20 p.m. New York time

No trades today. I’m attempting to exit CIEN at my target price and shall update this afternoon if the trade goes through before the closing bell.

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Oracle Corp. (ORCL)

Update 4/7/2017: ORCL gapped sharply to the upside immediately after earnings were published and then began a rapid decline. I exited the position at 24.7% of maximum potential profit, close to my target price.

Shares showed a net rise of 2.6% over 23 days, or a +41% annual rate. The options position produced a +32.8% yield on debit for a +520% annual rate

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ORCL publishes earnings on Wednesday after the closing bell.

I shall use the APR series of options, which trades for the last time 37 days hence, on April 21.

Implied volatility stands at 20%, which is 1.8 times the VIX, a measure of the volatility of the S&P 500 index.

ORCL’s IV stands in the 36th percentile of its annual range and the 46th percentile of its most recent broad movement. Despite the fact that both metrics are below my standard, the 50th percentile, I’m proceeding with the analysis. IV is fluctuating within a narrow range and easily return to that level by the end of the day. In other words, I’m punting.

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Dollar General Corp. (DG)

Update 3/21/2017: DG traded sideways for two trading days after earnings were published and then declined for two more. I exited at 22.2% of maximum potential profit, ending the trade’s short lifespan.

Shares declined by 1.0% over eight days, or a -58.9% annual rate. The options position produced a 28.6% yield on debit for a +1,738% annual rate.

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DG publishes earnings on Thursday before the opening bell.

I shall use the APR series of options, which trades for the last time 37 days hence, on April 21.

Implied volatility stands at 33%, which is 2.9 times the VIX, a measure of the volatility of the S&P 500 index.

DG’s IV stands in the 71st percentile of its annual range and the 73rd percentile of its most recent broad movement.

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3/15 – 1:15 p.m. New York time

I did my analyses and entry trades earlier than usual today. I shall be breaking away from the markets early to meet a commitment. The stocks analyzed are DG and ORCL. Earlier in the day I exited IONS for a profit.

I prefer to enter positions nearer to the closing bell, and especially on those days when the Federal Open Market Committee makes an announcement. I feel comfortable rushing it today because the markets have priced in a 95% chance that the fed will raise its target rate from 0.75% to 1%. Not much room for surprises.

The market’s pricing in of Fed action came from a tool posted by the derivatives markets company the CME Group.

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