FedEx Mess Up = Trade

Hi Shoppers,

It’s funny how just one experience, good or bad, will stick with you and form a lasting impression of a company’s product or service…

My son goes to camp every summer (except of course Summer 2020, so sad) in the northwoods Wisconsin, he just loves it.  Up to seven weeks away from parents, what kid wouldn’t love it?

While he is gone, I send him little care packages–not too spoiled!  As food and candy are not allowed, I sent him his favorite shows’ comic books.  The summer of 2019  his favorites were Rick and Morty and The Simpsons.

I took the books to my local FedEx store to be shipped to camp.  A week later Grant writes us (we are not allowed to talk on the phone, no cell phones are allowed WHICH IS AWESOME!!!) and says why in the world would you guys send me bird seeds!!??

WTH?  Bird seeds?  Very strange.  And by the way, why is someone sending someone else bird seeds?

I went to the FedEx store to see if this could be resolved.  They were no help.  I guess if someone came in complaining about receiving comic books instead of bird seeds, they would have been able to match us up.  That didn’t happen.

So needless to say, I send all my packages through UPS.  Which by the way, is a great company to work for if you are trying to pay for your college.  They helped my girlfriend, a ton, get through her four years of college.

Shopper Note: Even though I am partial to UPS, I think FedEx stock movement on Friday was a bit of an over reaction to its earnings report.

(As you already know, I only like to buy “cheap” options.  I like buying options with an implied volatility trading lower than the stock’s historical volatility.)

Looking at the chart of FDX, this is not the case:

The implied vol is 37.84 while the historical vol is 30.85.  Most of this is due to the earnings report which was on Thursday.  The arrow shows how the implied volatility has already dropped significantly since the earnings news came out.

I think the drop of over $16.00 on Friday was way over done.  Instead of buying calls, I would like to sell a put vertical in the Jan15 expiration.

A general rule of thumb is implied volatility drops as the stock trades higher in price.  Usually this is the case, but not always.  Nothing is 100% in trading.

If you followed me on my HD put vertical sale, I closed it Friday up 72%. 

Remember my premise for that trade was the doji, signaling a trend change in the stock–HD went up $10, along with the holiday time decay.  Well, we still have two weeks of that holiday time decay left and I would like to try this again in FDX.

Tune in tomorrow for EXACTLY how!

I don’t think Grant cares if he ever gets another care package again, but PLEASE can we have camp next summer??!

Thanks for reading…See You Next Tuesday!

Licia Leslie

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