Wednesday, June 3, 2015

Wednesday's Agenda

“Between Ennui and Ecstasy unwinds our whole experience of time.” 

― Emil Cioran, All Gall Is Divided: Aphorisms

The Romanian philosopher Emil Cioran nailed the annual journey of a trader: Four three-week oases of ecstacy, when the major companies report earnings and trading opportunities abound, separated by nine-week deserts when chances to trade are few to none.

We are, this week, in the deepest, driest stretch of desert. And so, as with Monday, I have no stocks or funds that meet my requirements for a trade. I plan to open no new positions today.

I could loosen those requirements helter-skelter, but I've found that to be a short-cut to loss. The most effective arrow in my quiver as a private trader is the fact that, unlike institutional money managers, I don't have to trade to prove that I'm doing my job. I can stay in cash and be quite happy going about my business.

Now, not all cash is equal. I generally park my funds during the ennui periods in JNK, a junk-bond fund that pays a monthly dividend yielding 5.75% annualized, or some other bond fund, such as the long-term U.S. Treasuries fund TLT, yielding 2.72%, when I'm feeling more risk averse. So the money is still working albeit at a slow and lazy pace.

As I did yesterday, I shall spend the day in study and contemplation of the markets. That's not just talk. I take study to be a serious part of my trading routine, and welcome the slow days when I have more time to pursue it.

Today I'm looking at how best to structure positions, using theories developed by Tom Sosnoff and posted on his TastyTrade site. Sosnoff, when he was head of ThinkOrSwim, back before it was taken over by TD Ameritrade, had a huge influence over how I view options, although the trading methods I use were developed by me independent of his methods.

-- Tim Bovee, Portland, Oregon, June 2, 2015


My volatility trading rules can be read here.


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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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