Live: Wednesday, October 25, 2017

10/25 – 3:20 p.m. New York time

Here are today’s outcomes. I entered an earnings play on MO and exited an unsuccessful one on WHR. I also ended my bullish trend series on SPY, posting results, and replaced it with a new bearish trend series. See the old series analysis here, and the new series analysis here.

10/25 – 2;15 p.m. New York time

MO Analysis posted.

10/25 – 1:50 p.m. New York time

Turning to prospective new positions for today, the bid/ask spread for XLNX has widened and that for MO has narrowed. XLNX is off the table. MO is on. Analysis to follow.

10/25 – 12:55 p.m. New York time

I have updated the SPY analysis first posted Sept. 11 with results of the bull vertical series.

10/25 – 12:30 p.m. New York time

The SPY analysis initiating the new series has been posted.

10/25 – 12:10 p.m. New York time

I judge from the Elliott wave count that SPY has reversed course. I exited my bull verticals series on Oct. 9. I began a new bear vertical series and shall post the analysis shortly, and also post results for the now ended bear vertical series.

10/25 – 11:55 a.m. New York time

I’ve updated the analysis for WHR, including a discussion of the psychology that led me into this losing trade.

10/25 – 9;55 a.m. New York time

Among my seven prospects, XLNX qualifies for a full analysis. Its bid/ask spread has narrowed from a day earlier. Two other symbols, BSX and MO, are close enough to qualifying for analysis to be worth rechecking later in the day.

I am passing on AMGN, LUV and UPS because of wide bid/ask spreads, and on MCK because its options grid won’t allow for balanced wings on an iron fly construction

I have exited one position, WHR, for a loss and shall update its analysis with results later today.

10/24 – 8:30 p.m. New York time

Among the most sensitive screening points I use is the bid/ask spread on a beta trade — a paper trade — similar to one I would do with money on the table. It is also one of the most important screens, for if a bid/ask spread is wide, then getting out of a position can be a money sewer and a psychological trauma, especially give the reality that spreads often widen after earnings are published.

So I keep the bid/ask spreads in entering my options positions in the single-digits — below 10% —  and eliminate outright those that are more than a couple of points high the day before action day. Those that are within a couple of qualifying get rechecked the day of the trade.

I have seven finalists on my prospects list, only one of them, AMGN, has a single-digit bid/ask spread. The others will all be rechecked on Wednesday.

AMGN is priced around $180 per share, and so may be too rich for my account. But maybe not; only by building the position can I know for sure. So AMGN is also on the recheck list.

Turning now to the remainder of the recheck list,

  • LUV, MO, UPS and XLNX are flawed only by their bid/ask spreads. If they narrow on Wednesday, then they’ll be up for a full analysis.
  • BSX is a bit skewed in its calls surrounding at-the-money and will need a recheck on that. Also, in my beta structure the credit was abysmally small, which is also a disqualifier: I like a good payday for my efforts.
  • The strike prices on MCK won’t allow for a identical profit zone on both the upside and the downside, which raises the cash impact of the trade.

Wednesday will be a day of surprises, as is often the case during the peak intensity of an earnings season. It could be that all seven will end up qualifying for a full analysis, in which case I shall need to find other factors to base my choice of one or two for actual trading. it could be that none will qualify, in which case it will be a very frustrating day.

By Tim Bovee, Portland, Oregon, October 24-25, 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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