news.cmlviz.com
menu
share

Option Market Alert: OneMain Holdings Inc Implied Price Swing Hits An Inflection Point




OneMain Holdings Inc (NYSE:OMF) Risk Hits An Inflection Point

Date Published:

No Risk Alert Here: Before we dive into any analysis we simply note that OneMain Holdings Inc (NYSE:OMF) 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 49.6% verus the IV30 of the S&P 500 at 11.15%. You might say that the post it note for OneMain Holdings Inc would read, "holding pattern." The annual high for OneMain Holdings Inc IV30 is 73.15%.



To skip ahead and see if buying or selling options has been a winner in OneMain Holdings Inc, you can go here: Geting serious about option trading.

PREFACE
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 OneMain Holdings Inc (NYSE:OMF) . The creator of this model is Capital Market Laboratories (CMLviz.com).


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 OneMain Holdings Inc 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 OMF and the company's risk rating:

We also take a peek at the implied vol for the Financials ETF (XLF), our broad based proxy for OMF.





SNAPSHOT SUMMARY
S&P 500 IV30     11.15%
Nasdaq 100 IV30     12.44%
XLF IV30     17.29%

OMF HV 30     26.93%
OMF Current IV30     49.6%
52 Week Low IV30     34.78%
52 Week High IV30     73.15%


The implied price swing risk as reflected by the option market has hit an inflection point relative to the company's past. The option market reflects a 95% confidence interval stock price range of ($21.40, $26.90) within the next 30 calendar days.

OMF 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. OneMain Holdings Inc shows an IV30 of 49.6%, which is an inflection point for the company relative to its past.

The option market for OMF has shown an IV30 annual low of 34.8% and an annual high of 73.2%, meaning that OMF 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.

OMF
Current IV30    
OMF
Low IV30    
OMF
High IV30   
49.6% 34.8% 73.2%

The implied stock swing risk from the option market has created a range which is tighter in the next 30 calendar days for OneMain Holdings Inc (NYSE:OMF) than it has been on average for the last year on average.
Further, if we look backwards, the stock has a realized 30-day historical volatility, called the HV30, of 26.93%.




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.
 
Note how much higher the forward looking stock swing price risk for OneMain Holdings Inc is priced (49.6%) compared to what happened just in the last 30-days (26.9%).

OneMain Holdings Inc Risk Rating
The OMF risk rating is at 3, where the rating goes from one (the lowest risk) to five (the highest risk). The driving factors for the 3 rating are:

The IV30 is below the annual average.
The IV30 is above 40%.
The HV30 is below the 20th percentile.
The HV30 is below 30%.
The IV30 is above the HV30.