Live: Monday, July 29, 2019

2:55 p.m. New York time

IBM has pulled back to within the profit zone, barely. The zone’s upper boundary is $150.88. IBM is presently trading at $150.80.

10 a.m. New York time

I’ve entered my first positions on Robinhood under the medium-risk trading method that I developed over the weekend and described in a post on Sunday, “A Robo Advisor Replacement“.

Here’s the lineup:

sym slot # price $ sector
RSX 1 23.66 intl-russia
XLV 2 92.21 health care
XRT 3 43.10 retail
WEAT 4 5.48 commodity-wheat
QAT 5 18.00 intl-qatar

Also, there’s movement in my thought experiment on hedging an earnings announcement in my options trades, which I described on July 17 in a post, “Thought Experiment: An IBM Earnings Play“. The iron condor position, which at entry had a high probability of success, was unprofitable after the earnings announcement, while remaining within the zone of profit at expiration.

Today my paper position IBM moved beyond the profit zone, and under my sudden death rules this close to expiration, will be subject to a mandatory exit if it moves a certain distance beyond the zone.

I calculate the exit point using the Rate of Change metric. If the share price moves far enough beyond the zone that it would take a day, or more, to return to the zone, then that triggers the exit.

In IBM’s case, the metric stands at 0.83, meaning that it would that that portion of a trading day to return to the zone of profitability. So, no exit yet, but it’s close.

By Tim Bovee, Portland, Oregon, July 29, 2019

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.

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Based on a work at www.timbovee.com.