I entered a position in SU as a potential earnings play. I analyzed KO for entry but declined to take the trade.
I exited AAPL to avoid assignment as the stock goes ex-dividend. I also exited UNP and USB as they approached expiration.
KO Analysis
SU Analysis
Suncor Energy Inc. (SU)
Update 3/18/2017: SU rose after earnings were published and then took it all back. A short put options was assigned when the stock went ex-dividend, creating a complex exit: After the assignment, I sold the short call options, and then let the long options — calls and puts — expire worthless.
For the entire position, shares showed a net rise of 0.5% over 37 days, or a +5% annual rate. The options positions, including the shares from assignment, altogether produced a -9.6% loss on debit for a 95% annual rate.
Lesson learned: Don’t overlook ex-dividend dates. It’s bad joss.
SU publishes earnings on Wednesday after the closing bell.
I shall use the MAR series of options, which trades for the last time 37 days hence, on March 17.
Implied volatility stands at 28%, which is 2.5 times the VIX, a measure of the volatility of the S&P 500 index.
SU’s IV stands in the 16th percentile of its annual range and the 91st percentile of its most recent broad movement. The broad movements have been relatively narrow compared to the annual range because of an IV spike to the upside in February 2016.
Wednesday’s Agenda
I shall analyze two symbols as potential earnings plays: KO and SU.
I have exited AAPL for a loss in order to avoid the likelihood of assignment when the stock goes ex-dividend on Thursday. I shall update the analysis with results later today.
Wednesday’s Prospects
I shall analyze KO and SU on Wednesday as potential earnings plays. SU’s options grid’s coverage is a bit weak, but I shall try to make it work.
I shall exit AAPL the day before the stock goes ex-dividend. I am also trying to pick the right time to exit UNP and USB as they approach their last day of trading on Feb. 17 prior to expiration.
By Tim Bovee, Portland, Oregon, Feb. 7, 2017
Tuesday’s Outcomes
Tuesday’s Agenda
Implied volatility on GILD has fallen in early trading and it no longer qualifies for an analysis.
Tuesday’s Prospects
I shall analyze GILD on Tuesday as a potential earnings play.
MDLZ qualifies on liquidity and options-grid coverage but falls short on implied volatility which stands in the lower half of both the annual range and the most recent broad move. I shall check it again after the opening bell, but unless IV improves, I shall do no further analysis of MDLZ.
By Tim Bovee, Portland, Oregon, Feb. 6, 2017
Monday’s Outcomes
I entered positions on GM and BP timed to coincide with earnings announcements.
I exited a position on XOM the day before the stock went ex-dividend in order to ensure my position wasn’t assigned.
I am attempting to exit FB, LMT and QCOM at my target prices and shall update this post after the market close if my orders are filled.
By Tim Bovee, Portland, Oregon, Feb. 6, 2017
BP Analysis
BP p.l.c. (BP)
Update 2/27/2017: BP fell for a week after earnings were published, and then zig-zagged sideways. The declined in volatility and time decay did their work, and I was able to exit for a profit at 25.2% of maximum potential profit, slightly above my 25% target..
Shares fell by 4.8% over 21 days, or an 84% annual rate. The options position produced a 33.6% yield on debit for a +584% annual rate.
BP publishes earnings on Tuesday before the opening bell.
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