Bel Fuse Inc (NASDAQ:BELFB) Risk Hits An Inflection PointDate Published: 2017-01-20
We're going to look at a proprietary risk rating for the next 30-days built by Capital Market Laboratories (CMLviz) based on a large number of interactions of data points, many of which come directly from the option market for Bel Fuse Inc (NASDAQ:BELFB) .
In the "Why This Matters" section at the end of this article on Bel Fuse Inc (NASDAQ:BELFB) 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 and we'll talk about how superior returns are earned.
But first, let's turn back to BELFB and the company's risk rating:
We also take a peek at the implied vol for the Technology ETF (XLK), our broad based proxy for BELFB.
|S&P 500 IV30||9.97%|
|Nasdaq 100 IV30||12.42%|
|BELFB HV 30||48.2%|
|BELFB Current IV30||40.2%|
|52 Week Low IV30||22.44%|
|52 Week High IV30||129.89%|
The risk as reflected by the option market has hit an inflection point relative to the company's past. The option market reflects a 95% confidence interval stock price range of ($29.30, $35.20) within the next 30 calendar days.
BELFB OPTION MARKET RISK
The IV30® is the risk reflected by the option market in the stock price for the next 30 calendar days -- it's forward looking. Bel Fuse Inc shows an IV30 of 40.2%, which is an inflection point for the company relative to its past.
The option market for BELFB has shown an IV30 annual low of 22.4% and an annual high of 129.9%, meaning that BELFB is at the 17% percentile right now. Here's a table of the data before we dig into the risk rating further.
The option market reflects substanially less risk in the next 30 calendar days for Bel Fuse Inc (NASDAQ:BELFB) than on average. Further, if we look backwards, the stock has a realized 30-day historical volatility, called the HV30, of 48.2%.
We have a situation now where the IV30 is substantially depressed relative to the past resulting in a risk pricing of less stock movement in the next 30-days than the stock has see in the last 30-days. Let's turn to a chart to see what's going on.
Bel Fuse Inc Risk Rating
The BELFB risk rating is at 3, where the rating goes from one (the lowest risk) to five (the highest risk). The driving factors for the 3 rating are:
↪ The IV30 is below the 20th percentile.
↪ The IV30 is above 40%.
↪ The HV30 is above the annual average.
↪ The IV30 is below the HV30.
↪ The stock has moved +31.6% over the last 3-months which does indicate some elevated risk.