Marvell Technology Group Ltd. (NASDAQ:MRVL) Risk Points versus Technology (XLK)Date Published: 2017-04-21
This is a scatter plot analysis of the critical risk points from the option market for Marvell Technology Group Ltd. (NASDAQ:MRVL) compared to its own past and the Technology ETF. In order to examine the forward looking risk for Marvell Technology Group Ltd. (NASDAQ:MRVL) the next 30-days, we must look to the option market.
Now, before we dive into the analysis on MRVL, we make one critical note since we're talking about options:
Option trading isn't about luck -- this three 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 Marvell Technology Group Ltd. (NASDAQ:MRVL) , 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 Marvell Technology Group Ltd. (NASDAQ:MRVL) . We start by noting that MRVL is in the information technology sector which means along with some other industries we also compare the company to the closest match we could find, which was the Technology ETF (XLK) as a proxy for Marvell Technology Group Ltd..
We have highlighted the IV30® for XLK and for MRVL in the table below.
|CONTEXT: THE INDICES|
|S&P 500 (SPY)||IV30||11.15%|
|Nasdaq 100 (QQQ)||IV30||12.44%|
|Technology ETF (XLK)||IV30||12.46%|
|Marvell Technology Group Ltd. (NASDAQ:MRVL)|
|MRVL 52 Week Low||IV30||23.42%|
|MRVL 52 Week High||IV30||56.09%|
|Marvell Technology Group Ltd. 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 Marvell Technology Group Ltd..
The black point is the current 30-day implied volatility for the Technology ETF (XLK).
The red point is the 52 week low in IV30® for Marvell Technology Group Ltd..
The green point is the 52 week high in IV30® for Marvell Technology Group Ltd..
The various other scatter plot points in the middle give us risk context outside of the information technology 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 Marvell Technology Group Ltd. is above all the indices we have charted including the Technology ETF (XLK).
* We can further see that the current IV30 for Marvell Technology Group Ltd. of 28.26% is closer to the annual low of 23.42% than the annual high of 56.09%. 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 Technology ETF is between [9.36%, 21.75%] while Marvell Technology Group Ltd. has had a range of [23.42%, 56.09%].
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 Marvell Technology Group Ltd. (NASDAQ:MRVL) lies relative to the last year, and the various major stock groupings and the Information Technology sector without using time series data, which can confuse the information.