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Hovnanian Enterprises Inc Risk Points versus Consumer Discretionary




Hovnanian Enterprises Inc (NYSE:HOV) Risk Points versus Consumer Discretionary (XLY)

Date Published:


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

Now, before we dive into the analysis on HOV, 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 Hovnanian Enterprises Inc (NYSE:HOV) , 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 Hovnanian Enterprises Inc (NYSE:HOV) . We start by noting that HOV is in the consumer durables and apparel 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 Hovnanian Enterprises Inc.

We have highlighted the IV30® for XLY and for HOV in the table below.


SNAPSHOT SUMMARY
CONTEXT: THE INDICES
S&P 500 (SPY) IV30     11.15%
Nasdaq 100 (QQQ) IV30     12.44%
Consumer Discretionary ETF (XLY) IV30     12.1%
Biotech (IBB) IV30     18.5%


Hovnanian Enterprises Inc (NYSE:HOV)
HOV 52 Week Low IV30     42.77%
HOV Current IV30     57.05%
HOV 52 Week High IV30     78.3%

HOV Current HV30     34.84%

Hovnanian Enterprises 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 Hovnanian Enterprises 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 Hovnanian Enterprises Inc.
The green point is the 52 week high in IV30® for Hovnanian Enterprises Inc.

The various other scatter plot points in the middle give us risk context outside of the consumer durables and apparel 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 Hovnanian Enterprises Inc is above all the indices we have charted including the Consumer Discretionary ETF (XLY).

* For some context, we note that the annual range in IV30® for the Consumer Discretionary ETF is between [8.91%, 22.6%] while Hovnanian Enterprises Inc has had a range of [42.77%, 78.3%].

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 Hovnanian Enterprises Inc (NYSE:HOV) lies relative to the last year, and the various major stock groupings and the Consumer Durables and Apparel sector without using time series data, which can confuse the information.