Live: Monday, Aug. 28, 2018

8/28 – 12 p.m. New York time

I entered no new positions and exited MOMO and MRVL.

As is not unusual in the periods between earnings season, my cupboard of options positions is bare. The next trading opportunities for earnings plays will come on Wednesday, although on Tuesday I may explore opportunities unrelated to earnings announcements

Meanwhile, my trading for today is over.

8/28 – 9:55 a.m. New York time

I have exited MOMO and MRVL, each for a loss.

I have decided to pass on my prospective BBY trade without a full analysis. The cutting off of the calls options grid at 16-delta would cost me premium and therefore narrow my zone of profit between the break-evens.

I’ve done malformed positions before, but I prefer to avoid them unless there’s a compelling reason to go forward. I see no such reason for BBY.

Also, a compelling reason not to the take the trade is the Zacks Investment Research Earnings Surprise Predictor score, which is significantly in favor of an earnings surprise to the downside. That increases my risk and therefore is no time to be giving up production on either side of the trade.

8/27 – 12:45 p.m. New York time

BBY is a prospective earnings play for action on Monday.

However, its options grid for the series I’m using stops at 16-delta on the call side; my goal is 10-delta. The truncated grid costs me about five or six percentage points in terms of the probability of expiring out of the money, a significant narrowing of the zone of profit.

I shall look at it on Tuesday and decide whether to proceed with the analysis.

By Tim Bovee, Portland, Oregon, Aug. 27-28, 2017


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.

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