Tuesday, March 22, 2016

Tuesday's Agenda

I have two earnings announcements on my desk as prospects this morning.

Neither meets my guidelines for full analysis and possibly trades because of low implied volatility. NKE has volatility in the 47th percentile of its most recent rise, and GIS, in the 18th percentile. My guidelines require implied volatility in the 60th percentile or better.

Past behavior has been for implied behavior to rise as earnings or some other significant event approaches. That has ceased to happen, for the present at least.

When volatility is low, it makes little sense to pursue a strategy of selling volatility, the strategy that lies at the heart of my trading. Pursuing that course would amount to a Buy High Sell Low strategy, a perfect description of how to lose money.

My plan, for now, is to wait and see what happens rather than tying up funds in riskier strategies.

-- Tim Bovee, Portland, Oregon, March 22, 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.
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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