This week, like last week, I shall be selective the symbols I analyze in order to provide greater time diversification across earnings season, using such criteria as liquidity, granularity of the strike prices compared to the price of a share of stock, open interest, implied volatility, and the business sector, My goal is no more than five trades for the week.
On Tuesday I shall be looking at seven prospects, and on Wednesday, at two, which implies a couple of trades each the first two days and perhaps one on the final day. I have no trades in sight for analysis on Thursday or Friday.
Of today's prospects, two are involved in the oil business -- APC and XOM -- and one in pharmaceutical research -- PFE. I'm avoiding both sectors because of the chance that political or regulatory actions will have a large impact on the price, externalities that market expectations can paint with only the broadest of brushes. I have no plans to analyze any of the three symbols further.
That leaves two. I shall analyze EMR first and DOW second. As always, whether I actually trade or not will be a decision resulting from the full analysis.
-- Tim Bovee, Portland, Oregon, Feb. 1, 2016
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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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.
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