Live: Tuesday, Sept. 5, 2017

9/5 – 7:45 a.m. New York time

I’m passing on both of my potential trades today without further analysis.

HDS fails to qualify because of a significant chance of a downside earnings surprise (score -1.25 on the Zacks Investment Research earnings surprise predictor) and a beta of 1.4. I prefer to have both within a -1 to 1 range.

HPE fails primarily because of its grid, which is too widely spaced spaced to allow me to construct a proper iron fly position. The deltas on the calls surrounding the at-the-money point are 55 and 25 — a huge gap. Although HPE’s earnings surprise predictor score of -0.87 meets my standards, it’s beta of 2.71 is way too high for me to consider.

Bottom line: No trades today, leaving me free to contemplate the ash falling on my beautiful city of Portland from forest fires in the Columbia River Gorge. Honestly, I’d rather be trading.

9/4 – 3:40 p.m. New York time

I have two prospects on my desk for analysis on Tuesday, when U.S. markets resume trading after Monday’s Labor Day holiday. They are HDS and HPE.

Each has flaws:

  • HDS with a wide-interval options grid, a slightly large expectation of an earnings surprise and a slightly high beta.
  • HPE with a low implied volatility percentile relative to its annual range and a high beta.

I shall make a decision on those issues and others relating to the trades after further analysis on Tuesday.

By Tim Bovee, Portland, Oregon, Sept. 4-5, 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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