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By Tim Bovee, Portland, Oregon, Dec. 9, 2016
Thursday, December 8, 2016
Thursday's Agenda
Blogger's, like yesterday, won't let me publish long-form posts. Going short....
I shall look at FNSR today as a potential earnings play.
I have closed COST for a profit after earnings were published.
I shall look at FNSR today as a potential earnings play.
I have closed COST for a profit after earnings were published.
Wednesday, December 7, 2016
Thursday's Prospects
Blogger is still not allowing me to close files properly through the browser interface, so I'm having to go through the iPhone app and shall be brief.
One prospect for Thursday, a potential earnings play on FNSR.
Also, I shall keep an eye on trades posted on Dough.
One prospect for Thursday, a potential earnings play on FNSR.
Also, I shall keep an eye on trades posted on Dough.
Wednesday's Outcomes
I entered three positions, two on my analysis and one based on a Dough trade.
The two earnings plays I entered are COST and HRB. I also analyzed CIEN but declined to take the trade.
The volatility play posted on Dough was for XLF.
Blogger, the platform upon which PrivateTrader runs, was semi-trashed today in its web browser interface. It wouldn't allow me post analyses I had saved, nor could I successfully type more than a sentence or two before it crashed.
So I sent briefs on my iPhone app for Blogger. I'll post the full analyses once Blogger gets back in the game. (And indeed, I'm typing this using the browser interface, which is a good sign.)
The two earnings plays I entered are COST and HRB. I also analyzed CIEN but declined to take the trade.
The volatility play posted on Dough was for XLF.
Blogger, the platform upon which PrivateTrader runs, was semi-trashed today in its web browser interface. It wouldn't allow me post analyses I had saved, nor could I successfully type more than a sentence or two before it crashed.
So I sent briefs on my iPhone app for Blogger. I'll post the full analyses once Blogger gets back in the game. (And indeed, I'm typing this using the browser interface, which is a good sign.)
FXE Analysis
Blogger is trashed big time except on my iPhone, so briefly.
Entered volatility play on XLF based on trade by Ryan at Dough -- www.dough.com.
Iron fly, short the $23 calls and puts, long the $25 calls and $21 puts.
Premium: $1.40.
COST Analysis
Blogger won't allow me to publish full analyses, so in brief:
I have entered an earnings play on COST structured as follows:
JAN series of options, which trades for the last time Jan. 20.
Iron fly, short the $150 calls and long the $160 calls, short the $150 puts and long the 140 puts.
The premium is $6.45.
I have entered an earnings play on COST structured as follows:
JAN series of options, which trades for the last time Jan. 20.
Iron fly, short the $150 calls and long the $160 calls, short the $150 puts and long the 140 puts.
The premium is $6.45.
CIEN Analysis
Blogger won't allow me to post full analyses. So, briefly:
I have passed on CIEN as an earnings play because I can't get a wide enough profit zone to cover post-earnings moves
Wednesday's Agenda
I shall be looking at three potential earnings plays: CIEN, COST and HRB.
By Tim Bovee, Portland, Oregon, Dec. 7, 2016
Tuesday, December 6, 2016
Wednesday's Prospects
Screening of the Tuesday, Dec. 6 markets identified three prospective high options volatility trades.
Three prospects will publish earnings and so are candidates for options volatility trades. They are CIEN, COST and HRB.
I shall make final trading decisions on Wednesday, Dec. 7.
I shall also consider trades posted on Dough as part of my current learning project.
I have suspended work on my small lots shares approach through December until I determine how to move forward, given the poor trading results of July through October. See Small Lots Approach: Analysis 7/2016 through 10/2016.
Three prospects will publish earnings and so are candidates for options volatility trades. They are CIEN, COST and HRB.
I shall make final trading decisions on Wednesday, Dec. 7.
I shall also consider trades posted on Dough as part of my current learning project.
-- Tim Bovee, Portland, Oregon, Dec. 6, 2016
by Susanne Chishti |
Tuesday's Outcomes
I completed the exit of my 440-day-old diagonal spread on UNG, and in updating the original post I ponder three valuable lessons.
I entered a position on IWM based a trade posted on Dough.
I entered a position on IWM based a trade posted on Dough.
By Tim Bovee, Portland, Oregon, Dec. 6, 2016
by Amy E. Herman |
IWM Analysis
iShares Russell 2000 (IWM)
This trading idea came from Dough trader Ryan.
I shall use the JAN06 series of options, which trades for the last time 31 days hence, on Jan. 6.
Implied volatility stands at 18%, which stands in the 16th percentile of its annual range. The price used for analysis was $221.22.
Ryan's trade differs from my normal practice in that implied volatility is low in relation to its annual range, and similarly low in relation to its most recent move. Here's his structure.
Iron condor, short the $132.50 calls and long the $137.50 calls,
short the $132.50 puts and long the $125.5 puts,
sold for a credit and expiring Jan. 7.
Probability of expiring out-of-the-money
The premium is $3.83, which is 77% of the width of the position’s wings.
The risk/reward ratio is 0.8:1.
Decision for My Account
I have entered a position on IWM as described above. The shares at the time of entry were priced at $134.13.
This trading idea came from Dough trader Ryan.
I shall use the JAN06 series of options, which trades for the last time 31 days hence, on Jan. 6.
Implied volatility stands at 18%, which stands in the 16th percentile of its annual range. The price used for analysis was $221.22.
Ryan's trade differs from my normal practice in that implied volatility is low in relation to its annual range, and similarly low in relation to its most recent move. Here's his structure.
short the $132.50 puts and long the $125.5 puts,
sold for a credit and expiring Jan. 7.
Probability of expiring out-of-the-money
| JAN07 | Strike | OTM | Δ |
|---|---|---|---|
| Upper | 132.50 | 39.6% | 62 |
| Lower | 132.50 | 58.3% | 40 |
The premium is $3.83, which is 77% of the width of the position’s wings.
The risk/reward ratio is 0.8:1.
Decision for My Account
I have entered a position on IWM as described above. The shares at the time of entry were priced at $134.13.
-- Tim Bovee, Portland, Oregon, Dec. 6, 2016
by Alex Cuadros |
Monday, December 5, 2016
Tuesday's Prospects
Screening of the Monday, Dec. 5 markets identified no prospective high options volatility trades.
Seven symbols from my pool have sufficiently high implied volatility or close to it to warrant further analysis:
Each is disqualified: COST because earnings are near; FXE, TLT and UNG because I already hold positions; GDXJ and TBT because they they have the same underlying as positions I hold; and XLU because I recently passed on it after analysis.
Although I've been unable to find positions under my guidelines, I shall also consider trades posted on Dough as part of my current learning project.
I have suspended work on my small lots shares approach through December until I determine how to move forward, given the poor trading results of July through October. See Small Lots Approach: Analysis 7/2016 through 10/2016.
Seven symbols from my pool have sufficiently high implied volatility or close to it to warrant further analysis:
| COST |
| FXE |
| GDXJ |
| TBT |
| TLT |
| UNG |
| XLU |
Each is disqualified: COST because earnings are near; FXE, TLT and UNG because I already hold positions; GDXJ and TBT because they they have the same underlying as positions I hold; and XLU because I recently passed on it after analysis.
Although I've been unable to find positions under my guidelines, I shall also consider trades posted on Dough as part of my current learning project.
-- Tim Bovee, Portland, Oregon, Dec. 5, 2016
by Daniel J. Levitin |
Monday's Outcomes
I analyzed XLU but declined to enter a position.
By Tim Bovee, Portland, Oregon, Dec. 5, 2016
by Lawrence Kudlow |
XLU Analysis
Utilities SPDR ETF (XLU)
I shall use the JAN series of options, which trades for the last time 46 days hence, on Jan. 20.
Implied volatility stands at 20%, which stands in the 51st percentile of its annual range and the 44th percentile of the most recent rise. The price used for analysis was $46.68.
Here is a chart of XLU's daily implied volatility since late August.
Although the implied volatility's annual range, must barely, means my guideline that implied volatility be in the upper half of its movement for the past 12 months, the most recent range is somewhat lower.
And the implied volatility movement is ambiguous. Does the decline over the last few days mean there is no way XLU will reach the 50th percentile? Or is it a pullback preparatory to a further rise?
In either case, it's not reasonable time to enter a short options play, which relies on a decline in implied volatility for part its profit.
Decision for My Account
I am declining to enter a position on XLU because of the trend in its implied volatility.
I shall use the JAN series of options, which trades for the last time 46 days hence, on Jan. 20.
Implied volatility stands at 20%, which stands in the 51st percentile of its annual range and the 44th percentile of the most recent rise. The price used for analysis was $46.68.
Here is a chart of XLU's daily implied volatility since late August.
 |
| XLU Implied Volatility, 8/25/2016 to 12/5/2016 |
Although the implied volatility's annual range, must barely, means my guideline that implied volatility be in the upper half of its movement for the past 12 months, the most recent range is somewhat lower.
And the implied volatility movement is ambiguous. Does the decline over the last few days mean there is no way XLU will reach the 50th percentile? Or is it a pullback preparatory to a further rise?
In either case, it's not reasonable time to enter a short options play, which relies on a decline in implied volatility for part its profit.
Decision for My Account
I am declining to enter a position on XLU because of the trend in its implied volatility.
-- Tim Bovee, Portland, Oregon, Dec. 5, 2016
by Wayne Gorman |
Monday's Agenda
I shall look at XLU as a volatility play. I'm deferring analysis on the week's four potential earnings plays until Wednesday for CIEN, COST and HRB, and Thursday for FNSR.
By Tim Bovee, Portland, Oregon, Dec. 5, 2016
by Sami Mahroum |
Sunday, December 4, 2016
The Week Ahead: International trade
The week after the monthly jobs report is always a slow one in economics. There is but one major economics report coming up this week: International trade, on Tiuesday at 8:30 a.m.
Leading indicators (in descending order of importance):
The interest rate spread between 10-year Treasuries and the federal funds rate, reported continually during market hours.
The M2 money supply, at 4:30 p.m. Thursday.
Manufacturers' new ordrs for consumer goods and materials from the factory orders report at 10 a.m. Tuesday.
The S&P 500 index, reported continually during market hours.
Average weekly initial claims for unemployment from the jobless claims report at 8:30 a.m. Thursday.
Index of consumer expectations from the University of Michigan consumer sentiment survey at 10 a.m. Friday.
Manufacturers' new orders for non-defense capital goods from the factory orders report at 10 a.m. Tuesday.
Leading indicators (in descending order of importance):
The interest rate spread between 10-year Treasuries and the federal funds rate, reported continually during market hours.
The M2 money supply, at 4:30 p.m. Thursday.
Manufacturers' new ordrs for consumer goods and materials from the factory orders report at 10 a.m. Tuesday.
The S&P 500 index, reported continually during market hours.
Average weekly initial claims for unemployment from the jobless claims report at 8:30 a.m. Thursday.
Index of consumer expectations from the University of Michigan consumer sentiment survey at 10 a.m. Friday.
Manufacturers' new orders for non-defense capital goods from the factory orders report at 10 a.m. Tuesday.
by Robert J. Gordon |
Saturday, December 3, 2016
Monday's Prospects
Screening of the Friday, Dec. 2 markets identified five prospective trades.
I'll look at four stocks -- CIEN, COST, HRB and FNSR -- as potential earnings plays.
XLU qualifies for further look based on its implied volatility compared to its annual range.
I shall make final trading decisions on Monday, Dec. 5.
Four symbols with implied volatility in the upper half of the annual range are eliminated from further considerations for reasons unrelated to volatility.
I hold positions in TLT and FXE, and TBT and GDXJ duplicate sectors among my holdings.
EWZ and UNG are close to having sufficiently high volatility in relation to their annual ranges. However, I hold positions in both.
I shall also consider trades posted on Dough as part of my current learning project.
I have suspended work on my small lots shares approach through December until I determine how to move forward, given the poor trading results of July through October. See Small Lots Approach: Analysis 7/2016 through 10/2016.
I'll look at four stocks -- CIEN, COST, HRB and FNSR -- as potential earnings plays.
XLU qualifies for further look based on its implied volatility compared to its annual range.
I shall make final trading decisions on Monday, Dec. 5.
Four symbols with implied volatility in the upper half of the annual range are eliminated from further considerations for reasons unrelated to volatility.
I hold positions in TLT and FXE, and TBT and GDXJ duplicate sectors among my holdings.
EWZ and UNG are close to having sufficiently high volatility in relation to their annual ranges. However, I hold positions in both.
I shall also consider trades posted on Dough as part of my current learning project.
-- Tim Bovee, Portland, Oregon, Dec. 3, 2016
by Anurag Sharma |
Friday, December 2, 2016
Friday's Outcomes
Friday's Agenda
Both of my prospects -- XLU and IYR -- are showing implied volatility levels this morning below my guidelines, and I am passing on them without further analysis. See Friday's Prospects for details.
I'm emulating Dough this month as a learning exercise, and if their team places trades I find interesting, I shall follow them.
With expiration of the DEC options 14 days away, I shall complete exits of my losing positions: FB and T.
I'm emulating Dough this month as a learning exercise, and if their team places trades I find interesting, I shall follow them.
With expiration of the DEC options 14 days away, I shall complete exits of my losing positions: FB and T.
By Tim Bovee, Portland, Oregon, Dec. 2, 2016
by Cathy O'Neil |
Thursday, December 1, 2016
Friday's Prospects
Screening of the Thursday, Dec. 1 markets identified two prospective high options volatility trades.
I shall make final trading decisions on Friday, Dec. 2.
Seven prospects in the pool have sufficiently high implied volatility to qualify for further analysis:
Out of them, I shall analyze XLU as a potential trade.
I already hold positions in EWZ, TLT and FXE. TBT and GDXJ are close enough to holdings to be disqualified. COST publishes earnings Dec. 12 and I shall wait until closer to that event to consider it.
I'll consider IYR for a potential trade. ORCL publishes earnings on Dec. 15 and I shall defer consideration until closer to the date.
I shall make final trading decisions on Friday, Dec. 2.
Seven prospects in the pool have sufficiently high implied volatility to qualify for further analysis:
| COST |
| EWZ |
| TBT |
| TLT |
| XLU |
| FXE |
| GDXJ |
Out of them, I shall analyze XLU as a potential trade.
I already hold positions in EWZ, TLT and FXE. TBT and GDXJ are close enough to holdings to be disqualified. COST publishes earnings Dec. 12 and I shall wait until closer to that event to consider it.
Two are close to having sufficiently high volatility to qualify.
| ORCL |
| IYR |
I'll consider IYR for a potential trade. ORCL publishes earnings on Dec. 15 and I shall defer consideration until closer to the date.
I shall also consider trades posted on Dough as part of my current learning project.
I have suspended work on my small lots shares approach through December until I determine how to move forward, given the poor trading results of July through October. See Small Lots Approach: Analysis 7/2016 through 10/2016.
-- Tim Bovee, Portland, Oregon, Dec. 1, 2016
by William Mougayar |
Thursday's Outcomes
GLD Analysis
SPDR Gold Trust (GLD)
The idea for this position came from trader Nick Batista at Dough. The structure produces a higher risk/reward ratio in return for wide wings on the iron condor and also has a lower implied volatility percentile than my guidelines allow.
The position, although hedged on both sides, has a long bias.
Like Nick, I shall use the JAN series of options, which trades for the last time 50 days hence, on Jan. 20.
Implied volatility stands at 19%, which stands in the 35th percentile of its annual range. The price used for analysis was $111.73.
Iron condor, short the $117 calls and long the $127 calls,
short the $110 puts and long the $100 puts,
sold for a credit and expiring Jan. 21.
Probability of expiring out-of-the-money
The premium is $2.38, which is 24% of the width of the position’s wings.
The risk/reward ratio is 3.2:1.
Decision for My Account
I've entered a position on GLD as described above. The stock at the time of entry was priced at $111.75.
References
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.
Alerts
Disclaimer
All content on Tim Bovee, Private Trader by Timothy K. Bovee is licensed under a Creative Commons Attribution-ShareAlike 4.0 International License.
Based on a work at www.timbovee.com.
The idea for this position came from trader Nick Batista at Dough. The structure produces a higher risk/reward ratio in return for wide wings on the iron condor and also has a lower implied volatility percentile than my guidelines allow.
The position, although hedged on both sides, has a long bias.
Like Nick, I shall use the JAN series of options, which trades for the last time 50 days hence, on Jan. 20.
Implied volatility stands at 19%, which stands in the 35th percentile of its annual range. The price used for analysis was $111.73.
short the $110 puts and long the $100 puts,
sold for a credit and expiring Jan. 21.
Probability of expiring out-of-the-money
| JAN | Strike | OTM | Δ |
|---|---|---|---|
| Upper | 117 | 78.1% | 24 |
| Lower | 110 | 59.1% | 38 |
The risk/reward ratio is 3.2:1.
Decision for My Account
I've entered a position on GLD as described above. The stock at the time of entry was priced at $111.75.
-- Tim Bovee, Portland, Oregon, Dec. 1, 2016
References
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.
Alerts
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Disclaimer
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
All content on Tim Bovee, Private Trader by Timothy K. Bovee is licensed under a Creative Commons Attribution-ShareAlike 4.0 International License.
Based on a work at www.timbovee.com.
Earns Prospects 12/5-12/9
Out of 97 earnings announcements by companies on U.S. exchanges from Dec. 5 through Dec. 9, six have sufficient liquidity to warrant further analysis and possibly a trade next week.
| action | sym | earns date | am/mid/pm |
| 12/5 | TOL | 12/6 | am |
| 12/7 | CIEN | 12/8 | am |
| 12/7 | COST | 12/7 | pm |
| 12/7 | HRB | 12/7 | pm |
| 12/8 | AVGO | 12/8 | pm |
| 12/8 | FNSR | 12/8 | pm |
Three symbols presently have implied volatility in the upper half of their one-year ranges: CIEN, HRB and FNSR. Another symbol, COST, is within easy reach of that level.
by Anna Coulling |
Thursday's Agenda
I have no entries on my desk based on my own analysis. See Thursday's Prospects.
I shall be following Dough during the the day as part of my education project and shall mimic their trades that I find interesting.
We're less than three weeks out from the expiration of the DEC options series. Time to exit the losers. I'll be working on that today.
Also, it's time for the weekly search for earnings announcements. Expect a post on that later in the day.
I shall be following Dough during the the day as part of my education project and shall mimic their trades that I find interesting.
We're less than three weeks out from the expiration of the DEC options series. Time to exit the losers. I'll be working on that today.
Also, it's time for the weekly search for earnings announcements. Expect a post on that later in the day.
By Tim Bovee, Portland, Oregon, Dec. 1, 2016
by Emanuel Derman and Michael B. Miller |
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