Friday's Agenda

I'm looking at five prospects for trades, none of them associated with earnings announcements.

All gave bull signals on Thursday, and all but one have low implied volatility relative to their 12-month ranges.

I'll immediately toss the middling implied volatility symbol, MKC, whose volatility stands in the 47th percentile of the annual range. It's such an awkward percentile, too low for a directional trade yet too high for a covered call.

Among the low IV percentiles, CCL has high historical odds that the bull signal will continue on in its rise -- a potential directional trade (high odds) best suited for a non-trending covered call (low percentile). Those are conflicting characteristics, so I toss CCL

That leaves three -- FDX, ASML and WFC -- and they all meet my fundamental liquidity requirements for a covered-call trade or a variant of the strategy. All three have dividends, WFC exceeding a yield of 2% per year, and the other two below 1%.

I shall be analyzing each today.

-- Tim Bovee, Portland, Oregon, Oct. 23, 2015

References

Tradecraft: Playing the odds to build winning stock market trades from options, a description of how I trade, can be read here.

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Disclaimer

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 decisions for his or her own account, and take responsibility for the consequences.

License



All content on Tim Bovee, Private Trader by Timothy K. Bovee is licensed under a Creative Commons Attribution-ShareAlike 4.0 International License.

Based on a work at www.timbovee.com.