This week, for options trading, I reviewed 474 symbols in my large-cap stocks and exchange-traded funds, and for share trading, I reviewed 953 symbols of stocks and funds of all capitalizations. For both I reviewed 1,412 companies publishing earnings.
I use four strategies in my trading, in response to trading signals (such as breakouts above the 20-day price channel), high implied options volatility, and high zacks scores on a chart, and in anticipation of events ( such as earnings announcements).
| options | shares | |
|---|---|---|
| signals | N/A | 0 |
| events | 0 | 0 |
| volatility | 2 | N/A |
| zacks | N/A | 7 |
I shall make final trading decisions on Friday, Aug. 12.
by Calum Chace |
Below are the candidates for analysis for each cell of the quadrant.
Options: High IV
| POT |
| GPS |
Shares: Zacks
| BERY |
| CPS |
| HRC |
| LH |
| NGL |
| OMN |
| TSE |
Notes
The current earnings season began on July 11 and will last through Aug. 19.
I have altered my screening of options as follows:
1) I shall no longer screen for a minimum price and shall treat low-priced options as opportunities for strangles and other options strategy that place no limit on loss. The minimum price had been $20 a share.
2) I shall no longer require that implied volatility be in the 50th percentile of its annual range or higher but shall instead rank the symbols in inverse order by IV percentile and pick from the higher ranks.
I shall continue to require that average volume be 3 million shares a day or higher, to provide liquidity.
The strategy labeled Shares: Zacks uses the rank and trading style (VGM) scores tabulated by Zacks Investment Research. I limit the pool to ranks of 1 or 2 and VGM of A or B. See an explanation of the indicators here. I also require that the MACD histogram be in an uptrend.
My goal with the Shares strategies is to enter five positions a day total. More than five prospects may be listed in case I need to reject some after the opening bell.
-- Tim Bovee, Portland, Oregon, Aug. 11, 2016
References
Tradecraft: Playing the odds to build winning stock market trades from options, a description of how I trade, can be read here.
Small Lots: A new strategy discusses the thinking behind the analysis that identified these trades and can be read here. The symbols noted in this post are intended fortrading on a commission-free platform such as Robinhood Financial.
I can be reached via comments on Private Trader posts or by email at datnillc@gmail.com.
Alerts
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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.License
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Based on a work at www.timbovee.com.
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