Of 490 large-cap stocks and exchange-traded funds in my analytical universe, three meet my criteria for further consideration. I already hold positions in two of them and the third is a close duplicate to a holding.
There are no prospects for trades coinciding with earnings announcements.
Lacking prospects, I shall do further no analysis on Thursday, July 14.
The next earnings season began on July 11 and will last for six weeks, through Aug. 19.
by Jonah Berger
Symbols meeting or close to meeting implied volatility criteria
I'm unlikely to do a full analysis and trade on GDXJ, which tracks smaller gold mining outfits, since I already hold GDX, which tracks larger gold miners.
Two companies publishing earnings, C and WFC, qualify except for low implied volatility, at the 30th and 24th percentile, respectively, of the one-year range. I'll pursue further analysis if either reaches the 50th percentile or greater on Wednesday; otherwise, they're out of play.
The stocks in my analytical universe all have analyst coverage through the stock-ranking company Zacks Investment Research. Not all of the exchange-traded funds are so covered.
I screen for 1) suitability of the options grid, including open interest of three figures or greater on the strike prices I would need to use to build a position and 2) the absence of an earnings announcement within the lifespan of the like options series I would trade, 3) implied volatility in the 50th percentile or greater of its annual range, 4) average volume of 3 million shares a day or greater, and 5) a price of $20 or greater.
-- Tim Bovee, Portland, Oregon, July 12, 2016
Tradecraft: Playing the odds to build winning stock market trades from options, a description of how I trade, can be read here.
I can be reached via comments on Private Trader posts or by email at email@example.com.
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