Live: Monday, Oct. 15, 2018

11:10 a.m. New York time

I have entered a short iron fly position on JNJ.

I’ve decided to pass on UNH, reserving funds for later in the earnings season.

Today’s Book

Big Debt Crisis by Ray Dalio

I first encountered hedge fund manager Ray Dalio at the outset of the Great Recession a decade ago, in the form of his 30-minute YouTube video How the Economic Machine WorksIn it, Dalio presents an Economics 101 course in how economic downturns happen, the small ones of the business cycle and the big ones of an excess of debt.

It’s a marvelous piece of work, and upon watching it, as our world crumbled about us, I christened him to myself as “The Great Simplifier”, a tribute to his easy to understand style of presentation.

Dalio has returned to his economics tutoring, this time in book form. Big Debt Crisis elaborates on the theories he illustrated so long ago in the video. I’m reading the book now, and find it to be a masterwork of great clarity. From Dalio, of course, I would expect no less. I recommend the book to all traders. Like smart fish, we need to understand the water in which we swim. Dalio provides us with a map.

More about the book

10 a.m. New York time

I have  selection of five potential earnings plays on my desk as I greet the dawn, and have selected two as my best prospects: JNJ for pharmaceuticals and UNH for health insurance and other services.

I’m going with JNJ, since it has the higher implied volatility rank, 67. UNH is also acceptable, and I’ll consider adding it but have not yet made a decision.

The remaining three possibilities are all financials, BLK, GS and MS, which I am passing on without further analysis, having already added financials to my risks this earnings season.

Here’s how my options positions are doing this morning:

sym option debit share price curr % max profit net prft/shr $ option days left
C 3.26 70.35 5.5 0.19 32
EWZ 0.85 38.31 1.2 0.01 32
LEN 3.58 41.22 (10.8) (0.35) 32
SPY 3.67 275.74 15.8 0.69 32
STZ 9.93 223.54 (18.2) (1.53) 32
WBA 3.45 74.20 3.1 0.11 32

And of my shares positions:

sym share price net result % net profit $ days held
AAPL 220.12 -1.7% (3.84) 31
CHK 4.48 12.0% 0.48 31
FXI 35.54 -13.8% (5.67) 31
SPXU 37.37 -7.9% (3.19) 153
TSLA 261.12 -14.4% (43.87) 14
VNQI 52.84 -7.0% (3.97) 32

By Tim Bovee, Portland, Oregon, Oct. 15, 2018

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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