Ply Gem Holdings, Inc (NYSE:PGEM) Risk Points versus Materials (XLB)Date Published: 2017-04-21
This is a scatter plot analysis of the critical risk points from the option market for Ply Gem Holdings, Inc (NYSE:PGEM) compared to its own past and the Materials ETF. In order to examine the forward looking risk for Ply Gem Holdings, Inc (NYSE:PGEM) the next 30-days, we must look to the option market.
Now, before we dive into the analysis on PGEM, 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 Ply Gem Holdings, Inc (NYSE:PGEM) , 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 Ply Gem Holdings, Inc (NYSE:PGEM) . We start by noting that PGEM is in the building products sector which means along with some other industries we also compare the company to the closest match we could find, which was the Materials ETF (XLB) as a proxy for Ply Gem Holdings, Inc.
We have highlighted the IV30® for XLB and for PGEM in the table below.
|CONTEXT: THE INDICES|
|S&P 500 (SPY)||IV30||11.15%|
|Nasdaq 100 (QQQ)||IV30||12.44%|
|Materials ETF (XLB)||IV30||14.4%|
|Ply Gem Holdings, Inc (NYSE:PGEM)|
|PGEM 52 Week Low||IV30||26.52%|
|PGEM 52 Week High||IV30||53.19%|
|Ply Gem Holdings, 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 Ply Gem Holdings, Inc.
The black point is the current 30-day implied volatility for the Materials ETF (XLB).
The red point is the 52 week low in IV30® for Ply Gem Holdings, Inc.
The green point is the 52 week high in IV30® for Ply Gem Holdings, Inc.
The various other scatter plot points in the middle give us risk context outside of the building products 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 Ply Gem Holdings, Inc is above all the indices we have charted including the Materials ETF (XLB).
* We can further see that the current IV30 for Ply Gem Holdings, Inc of 34.85% is closer to the annual low of 26.52% than the annual high of 53.19%. 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 Materials ETF is between [11.46%, 25.75%] while Ply Gem Holdings, Inc has had a range of [26.52%, 53.19%].
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 Ply Gem Holdings, Inc (NYSE:PGEM) lies relative to the last year, and the various major stock groupings and the Building Products sector without using time series data, which can confuse the information.