Northwest Pipe Company (NASDAQ:NWPX) Risk Hits An Amplified LevelDate Published: 2017-04-21
No Risk Alert Here: Before we dive into any analysis we simply note that Northwest Pipe Company (NASDAQ:NWPX) risk is neither elevated nor depressed. We'll detail it below -- but that's the lede -- the option market is in a holding period with an IV30 of 52.77% verus the IV30 of the S&P 500 at 11.15%. You might say that the post it note for Northwest Pipe Company would read, "holding pattern." The annual high for Northwest Pipe Company IV30 is 76.59%.
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This is a proprietary risk rating and risk alert system that looks forward for the next month -- or really 30 days to be exact -- and that includes weekends. The system is based on multiple interactions of data points, many of which come directly from the option market for Northwest Pipe Company (NASDAQ:NWPX) . The creator of this model is Capital Market Laboratories (CMLviz.com).
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In the "Why This Matters" section at the end of this article on Northwest Pipe Company 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 NWPX and the company's risk rating:
We also take a peek at the implied vol for the Industrials ETF (XLI), our broad based proxy for NWPX.
|S&P 500 IV30||11.15%|
|Nasdaq 100 IV30||12.44%|
|NWPX HV 30||31.94%|
|NWPX Current IV30||52.77%|
|52 Week Low IV30||37.69%|
|52 Week High IV30||76.59%|
The implied price swing risk as reflected by the option market has hit an amplified level relative to the company's past. The option market reflects a 95% confidence interval stock price range of ($11.50, $14.60) within the next 30 calendar days.
NWPX OPTION MARKET IMPLIED PRICE SWING RISK
The IV30® is the implied price swing risk reflected by the option market in the stock price for the next 30 calendar days -- it's forward looking. Northwest Pipe Company shows an IV30 of 52.8%, which is an amplified level for the company relative to its past.
The option market for NWPX has shown an IV30 annual low of 37.7% and an annual high of 76.6%, meaning that NWPX is at the 39% percentile right now. Here's a table of the data before we dig into the implied price swing risk rating further.
The implied stock swing risk from the option market has created a range which is tighter in the next 30 calendar days for Northwest Pipe Company (NASDAQ:NWPX) than it has been on average for the last year on average.
We have an unusual situation now where the IV30 is depressed relative to the past, but even with that risk pricing, the option market reflects the likelihood of a greater stock movement in the next 30-days than the stock has realized in the last 30-days. Let's turn to a chart to see what's going on.
Northwest Pipe Company Risk Rating
The NWPX risk rating is at 3.5, where the rating goes from one (the lowest risk) to five (the highest risk). The driving factors for the 3.5 rating are:
↪ The IV30 is below the annual average.
↪ The IV30 is above 50%.
↪ The HV30 is below the annual average.
↪ The IV30 is above the HV30.
↪ The stock has moved -26.6% over the last 3-months which does indicate some elevated risk.