Autoliv Inc (NYSE:ALV) Risk Points versus Consumer Discretionary (XLY)Date Published: 2017-04-21
This is a scatter plot analysis of the critical risk points from the option market for Autoliv Inc (NYSE:ALV) compared to its own past and the Consumer Discretionary ETF. In order to examine the forward looking risk for Autoliv Inc (NYSE:ALV) the next 30-days, we must look to the option market.
Now, before we dive into the analysis on ALV, we make one critical note since we're talking about options:
Option trading isn't about luck -- this four minute video will change your trading life forever: Option Trading and Truth
In the "Why This Matters" section at the end of this article on Autoliv Inc (NYSE:ALV) , 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 Autoliv Inc (NYSE:ALV) . We start by noting that ALV is in the automobiles and components sector which means along with some other industries we also compare the company to the closest match we could find, which was the Consumer Discretionary ETF (XLY) as a proxy for Autoliv Inc.
We have highlighted the IV30® for XLY and for ALV in the table below.
|CONTEXT: THE INDICES|
|S&P 500 (SPY)||IV30||11.15%|
|Nasdaq 100 (QQQ)||IV30||12.44%|
|Consumer Discretionary ETF (XLY)||IV30||12.1%|
|Autoliv Inc (NYSE:ALV)|
|ALV 52 Week Low||IV30||19.24%|
|ALV 52 Week High||IV30||34.57%|
|Autoliv 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 Autoliv Inc.
The black point is the current 30-day implied volatility for the Consumer Discretionary ETF (XLY).
The red point is the 52 week low in IV30® for Autoliv Inc.
The green point is the 52 week high in IV30® for Autoliv Inc.
The various other scatter plot points in the middle give us risk context outside of the automobiles and components 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 Autoliv Inc is above all the indices we have charted including the Consumer Discretionary ETF (XLY).
* We can further see that the current IV30 for Autoliv Inc of 30.41% is closer to the annual high of 34.57% than the annual low of 19.24%. Simply stated, this means that the option market is pricing less risk than the average over the past year.
* For some context, we note that the annual range in IV30® for the Consumer Discretionary ETF is between [8.91%, 22.6%] while Autoliv Inc has had a range of [19.24%, 34.57%].
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 Autoliv Inc (NYSE:ALV) lies relative to the last year, and the various major stock groupings and the Automobiles and Components sector without using time series data, which can confuse the information.