NaughtyPines

MDT -- THURSDAY BEFORE OPEN EARNINGS -- IVR/IV WILL NEED TO POP

NYSE:MDT   MEDTRONIC PLC. ORDINARY SHARES
MDT's current IVR/IV (35/29) doesn't make it worthwhile for a premium selling play; the standard setup (1 SD             short strangle, 72/80.5 Dec 11 expiry currently only goes for a .54 credit), so its volatility will need to pop either pre-earnings or post in order for me to bother with it.

Playing it to stay within its "expected move" of between 74 and 79 (Dec 11th expiry) almost grabs a 1.00 credit, but naturally when you constrict the width of the strangle, the probability of profit (POP) percentage decreases, and I vastly prefer 70% POP setups when all is said and done.

Naturally, I'll keep an eye on it, but in all likelihood will opt to play other, higher POP% plays, earnings or otherwise ... .

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