FedEx (FDX) reports earnings in December, around the 17th, and one trader feels shares are fairly priced right now, selling 3,000 December $80 straddles for $6.85 Friday, leaving a profit window from $73.15 to $86.85. The trader is basically expecting shares to remain in the same range it is been in the past 2 months, and with a lot of comments from the CEO recently on expected holiday shipping, much of the upside is likely baked in here. Implied volatility sits at 41%, a bit above 38% historical volatility, and well above 33% 52 week lows. The value of the FedEx straddle has declined each of the past 4 quarters, and this trader is getting in early with shares at $81.14, a slight bearish bias. At 19X next year’s earnings, the shares do look fairly valued, with limited upside until the economy really shows signs of a rebound in consumer spending.

1 user commented on " FedEx (FDX) $83.32 +1.88% "
Follow-up comment rss or Leave a TrackbackThanks Joe. Seems like the best approach is sometimes to think horizontally, rather than look for a move higher or lower, especially during the holidays. Interesting trade.
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