8point3 Energy Partners LP (NASDAQ:CAFD) Risk Points versus Industrials (XLI)Date Published: 2017-01-5
This is a scatter plot analysis of the critical risk points from the option market for 8point3 Energy Partners LP (NASDAQ:CAFD) compared to its own past and the Industrials ETF. In order to examine the forward looking risk for 8point3 Energy Partners LP (NASDAQ:CAFD) the next 30-days, we must look to the option market.
Now, before we dive into the analysis on CAFD, we make one critical note since we're talking about options:
In the "Why This Matters" section at the end of this article on 8point3 Energy Partners LP (NASDAQ:CAFD) , we're going to take a step back and show in great specificity that there is actually a lot less "luck" in successful option trading than many people know. The whole concept of an "option trading expert" is vastly over complicated in order to dissuade non-professional traders from gaining the knowledge that the pros have.
But that's at the end, now let's jump back into the risk point charting and number crunching for 8point3 Energy Partners LP (NASDAQ:CAFD) . We start by noting that CAFD is in the utilities sector which means along with some other industries we also compare the company to the closest match we could find, which was the Industrials ETF (XLI) as a proxy for 8point3 Energy Partners LP.
We have highlighted the IV30® for XLI and for CAFD in the table below.
|CONTEXT: THE INDICES|
|S&P 500 (SPY)||IV30||10.87%|
|Nasdaq 100 (QQQ)||IV30||14.76%|
|Industrials ETF (XLI)||IV30||14.21%|
|8point3 Energy Partners LP (NASDAQ:CAFD)|
|CAFD 52 Week Low||IV30||24%|
|CAFD 52 Week High||IV30||59.98%|
|8point3 Energy Partners LP Implied Risk Scatter Plot|
|(a new risk chart, built for option traders)|
Scatter Plot Risk Legend
The blue point is the current 30-day implied volatility for 8point3 Energy Partners LP.
The black point is the current 30-day implied volatility for the Industrials ETF (XLI).
The red point is the 52 week low in IV30® for 8point3 Energy Partners LP.
The green point is the 52 week high in IV30® for 8point3 Energy Partners LP.
The various other scatter plot points in the middle give us risk context outside of the utilities sector.
The IV30® is the risk reflected by the option market in the stock price for the next 30 calendar days.
* We can see that the risk as reflected by the option market for the next 30-days for 8point3 Energy Partners LP is above all the indices we have charted including the Industrials ETF (XLI).
* For some context, we note that the annual range in IV30® for the Industrials ETF is between [11.51%, 27.19%] while 8point3 Energy Partners LP has had a range of [24%, 59.98%].
Get this same analysis on any ticker here:
A New Kind of Risk Point Chart
This is chart was developed for the trader. It allows us to easily see where the forward looking risk for 8point3 Energy Partners LP (NASDAQ:CAFD) lies relative to the last year, and the various major stock groupings and the Utilities sector without using time series data, which can confuse the information.