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Aaron's Inc Risk Points versus Consumer Staples




Aaron's Inc (NYSE:AAN) Risk Points versus Consumer Staples (XLP)

Date Published:


PREFACE
This is a scatter plot analysis of the critical risk points from the option market for Aaron's Inc (NYSE:AAN) compared to its own past and the Consumer Staples ETF. In order to examine the forward looking risk for Aaron's Inc (NYSE:AAN) the next 30-days, we must look to the option market.

Now, before we dive into the analysis on AAN, we make one critical note since we're talking about options:



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In the "Why This Matters" section at the end of this article on Aaron's Inc (NYSE:AAN) , 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.

But that's at the end, now let's jump back into the risk point charting and number crunching for Aaron's Inc (NYSE:AAN) . We start by noting that AAN is in the retailing sector which means along with some other industries we also compare the company to the closest match we could find, which was the Consumer Staples ETF (XLP) as a proxy for Aaron's Inc.

We have highlighted the IV30® for XLP and for AAN in the table below.


SNAPSHOT SUMMARY
CONTEXT: THE INDICES
S&P 500 (SPY) IV30     11.15%
Nasdaq 100 (QQQ) IV30     12.44%
Consumer Staples ETF (XLP) IV30     10.98%
Biotech (IBB) IV30     18.5%


Aaron's Inc (NYSE:AAN)
AAN 52 Week Low IV30     25.68%
AAN Current IV30     42.01%
AAN 52 Week High IV30     54.01%

AAN Current HV30     22.19%

Aaron's Inc 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 Aaron's Inc.
The black point is the current 30-day implied volatility for the Consumer Staples ETF (XLP).
The red point is the 52 week low in IV30® for Aaron's Inc.
The green point is the 52 week high in IV30® for Aaron's Inc.

The various other scatter plot points in the middle give us risk context outside of the retailing 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 Aaron's Inc is above all the indices we have charted including the Consumer Staples ETF (XLP).

* For some context, we note that the annual range in IV30® for the Consumer Staples ETF is between [8.36%, 17.91%] while Aaron's Inc has had a range of [25.68%, 54.01%].

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 Aaron's Inc (NYSE:AAN) lies relative to the last year, and the various major stock groupings and the Retailing sector without using time series data, which can confuse the information.