Methode Electronics Inc Risk Points versus Technology
Methode Electronics Inc (NYSE:MEI) Risk Points versus Technology (XLK)
This is a scatter plot analysis of the critical risk points from the option market for Methode Electronics Inc (NYSE:MEI)
compared to its own past and the Technology ETF. In order to examine the forward looking risk for Methode Electronics Inc (NYSE:MEI) the next 30-days, we must look to the option market.
Now, before we dive into the analysis on MEI, we make one critical note since we’re talking about options:
In the “Why This Matters” section at the end of this article on Methode Electronics Inc (NYSE:MEI) , 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
in order to dissuade non-professional traders from gaining the knowledge that the pros have.
But that’s at the end, now let’s jump back into the risk point charting and number crunching for Methode Electronics Inc (NYSE:MEI) . We start by noting that MEI 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 Methode Electronics Inc.
We have highlighted the IV30® for XLK and for MEI in the table below.
Scatter Plot Risk Legend
The blue point is the current 30-day implied volatility for Methode Electronics Inc.
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 Methode Electronics Inc.
The green point is the 52 week high in IV30® for Methode Electronics Inc.
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 Methode Electronics Inc is above all the indices we have
charted including the Technology ETF (XLK).
* We can further see that the current IV30 for Methode Electronics Inc of 27.07% is closer to the annual low of 24.02% than the annual high of 74.29%.
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 [10.12%, 28.86%]
while Methode Electronics Inc has had a range of [24.02%, 74.29%].
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 Methode Electronics Inc (NYSE:MEI) 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.
The as reflected by the option market has hit
relative to the company’s past. The option market reflects a 95% confidence interval stock price range of
within the next 30 calendar days.