Sunday, March 29, 2015

Saturday's Paper Trade Outcomes

I've been placing a series of paper trades as part of a project to explore ways of expanding application of my very-short-term volatility rules to situations other than earnings announcements. See "Expanding the volatility strategy" for a description of the project.

I've set the methodology so that I allow the paper trades to expire, at which point each position either produces maximum profit if it expires out of the money or is assigned if it expires in the money. 

For the Weeklys expiring Saturday, March 28, I placed seven paper trades on four symbols. I've updated the analyses with results. The discusson below contains links to the analyses.

I opened paper iron condors on AAL on two separate days. Both expired for maximum profit. See the first AAL analysis  and second AAL analysis.

A directional vertical spread on IWM expired for maximum profit.

An iron condor on TSLA was assigned for a loss.

I did three simultaneous paper trades on YHOO: A directional vertical spread was assigned and two iron condors (analysis here) had split results, one expiring for maximum profit and one being assigned for a loss.

Bottom line: Seven positions, five of them producing maximum profit, for a 71% success rate.

From that I reach a tentative conclusion that my volatility rules can be applied successfully without an earnings announcement or some other event causing implied volatility to collapse.

-- Tim Bovee, Portland, Oregon, March 29, 2015


My price channel trading rules can be read here. My long-term share trading rules can be read here.  My volatility trading rules can be read here. The channel rules are based on the classic Turtle Trading rules, which can be read here.

Elliott wave analysis tracks patterns in price movements. The principal practitioner of Elliott wave analysis is Robert Prechter at Elliott Wave International. His book, Elliott Wave Principle, is a must-read for people interested in this form of analysis, as is his most recent publication, Visual Guide to Elliott Wave Trading

Several web sites summarize Elliott wave theory, among them, Investopedia, StockCharts and Wikipedia.


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Tim Bovee, Private Trader tracks the analysis and trades of a private trader for his own accounts. Nothing in this blog constitutes a recommendation to buy or sell stocks, options or any other financial instrument. The only purpose of this blog is to provide education and entertainment.
No trader is ever 100 percent successful in his or her trades. Trading in the stock and option markets is risky and uncertain. Each trader must make trading decision decisions for his or her own account, and take responsibility for the consequences.

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