The other two prospects have overly low implied volatility, measured as a percentile of the most recent range. I require the 60th percentile or higher to pursue full analysis.
I added a fourth symbol, TGT, to the prospects list this morning after open interest of its options improved sufficiently to warrant a further look. However, it's implied volatility is also low.
The symbols and their implied volatility percentiles:
I shall proceed with a full analysis of HRL. The others are far enough out from qualifying that they won't require close watching during the trading day.
-- Tim Bovee, Portland, Oregon, May 17, 2016
by Steve Nisson
Tradecraft: Playing the odds to build winning stock market trades from options, a description of how I trade, can be read here.
Elliott wave analysis tracks patterns in price movements. StockCharts has a good explainer. The principal practioner 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.
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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 decisions for his or her own account, and take responsibility for the consequences.License
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