10:45 a.m. New York time

The 20% trailing stop on EBMT in the Growth Portfolio was triggered, exiting the position at $21.71 per share, up 0.28 from the entry level.

I’m not quite sure why the stop was triggered — 20% trailing from the current bid is $17.37, and the price hasn’t approached that level since entry, not even in intra-session trading. A rogue bid, perhaps?

Nonetheless, the symbol continues to meet my criteria for the portfolio, and assuming no change, I shall re-enter on Tuesday.

Looking ahead this week…

The December monthly options trade for the last time on Friday and expire thereafter. I’ve already exited my positions, each for a profit.

I’ll continue the slow population of my Genetics Portfolio on Wednesday, adding a new position in a symbol yet to be determined.

By Tim Bovee, Portland, Oregon, December 16, 2019

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1:55 p.m. New York time

I’m starting a somewhat different sort of portfolio, one that gives me an ability to provide a specific sort of business rather than a strategy. Initially, I shall be focusing on companies developing medical uses for genetics, and shall call the collection the Genetics Portfolio.

Like my current portfolios — the primary Growth Portfolio and secondaries Momentum and Value — the new portfolio will use Zacks Investment Research metrics as a way to pick from a pool of stocks. My strategy portfolios use the entire pool of symbols having a strong buy (rank 1) assessment from Zacks. The new sector portfolio, Genetics, will draw from a pool of genetics companies that are held by the exchange-traded fund ARKG.

The first buy in the new portfolio is GH, for $74.25 per shares. I shall be adding periodically as funding becomes available. My selection rules are that a purchase must have a buy (rank 2) or strong buy (rank 1) from Zacks, along with good grades (A or B) from at least one of the three strategy rankings, value, momentum and growth. A rank below 2 or strategy rankings that are all C or lower will be a signal to exit the position.

The sector portfolios are designed to take advantage of free trading — no fees — and also the fact that funds must publish their holdings periodically, providing a ready-made pool. The fund itself will provide a measure of how the subset I pick is doing. I’ve chosen Robinhood to house this strategy, and they are about to bring a partial shares system online, another attractive feature for a portfolio where my aim is to dedicate the same amount of money for each purchase.

Ideally, this method will outperform the fund that forms the pool from which I draw trades. The name of my pool? The Gene Pool, of course.

12:15 p.m. New York time

I’ve updated XOP Analysis with results.

12:05 p.m. New York time

I’ve exited XOP, the last of my options iron condor positions expiring Dec. 20, and shall update the analysis shortly with results.

In shares, I exited my position on FANH for $25.01 per share, a loss of $1.16. The trade resulted in a 4.4% loss over four days, or a -404% annual rate.

By Tim Bovee, Portland, Oregon, December 13, 2019

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10:40 a.m. New York time

I’ve updated APA Analysis with results.

10:10 a.m. New York time

I’ve exited my short iron condor position on APA for a $1.09 debit, a 15.5% profit. Analysis upcoming.

In shares, I’ve added IBP to my growth portfolio for a $71.50 debit.

(I have referred to my primary portfolio as “upgrades and revisions”. The word “growth” better describes the goal, and so I shall use that terminology going forward. The selection is based on expectations of growing earnings.)

By Tim Bovee, Portland, Oregon, December 12, 2019

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10:15 a.m. New York time

I’ve exited two shares positions from my upgrades and revisions portfolio, FSBW for $62.60 a share, a $2.63 profit, and SNE for $66.24, a 98 cent profit.

FSBW produced a 4.4% return over 13 days, or a 122% annual rate.

SNE tallied a 1.5% return over six days for a 92% annual rate.

By Tim Bovee, Portland, Oregon, December 11, 2019

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10:35 a.m. New York time

One of my short iron condor prospects, XLP, gained volatility, showing a 25.8% implied volatility rank in early trading. The best construction still showed a 5.8:1 risk/reward ratio, which is too rich for my blood. So I’m abandoning further attempts to add to my options holdings expiring January 17 and shall be content with the two positions entered yesterday: TLT and XLY.

An hour after the opening bell XLP’s IV rank had dropped to 14.9%, about the same as it did yesterday. So clearly a fickle IVR is a feature of XLP, not an anomaly.

My JAN17 series holdings will be managed on December 27, meaning the profitable positions will be exited, 21 days prior to expiration.

I exited four stock positions in my upgrades and revisions portfolio, AMED at $166.65, for a profit of 94 cents a share; DECK at $164.81, a $2 loss; IBP at $70.43, a $1.27 loss and SPAR at $17.71, a 30-cent loss.

Also, RH has been added back into my primary portfolio (revisions). It was removed but remained alive in my secondary portfolio (momentum). I entered the position on November 27 for a $204.53 per share debit

Results:

AMED produced a 0.6% return over five days, or a 41% annual rate.

DECK showed a 1.2% loss over 13 days for a -34% annual rate.

IBP stumbled into a -1.8% loss over four days, or a -162% annual rate.

SPAR tallied a -1.7% loss over one day for a -608% annual rate.

By Tim Bovee, Portland, Oregon, December 10, 2019

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The Consumer Discretionary Select Sector SPDR Fund (XLY)

Update 1/18/2020: As I expected, the remaining put leg of my short iron condor on XLY expired without value. The results I posted on January 15 stand.

Update 1/15/2020: The short iron condor position on XLY remains net out in the money, with two more trading days after today remaining. Rather than risk having short shares dumped into my account, I’ve exited the side built for a short $126 call, which was in the money, ensured by a long $128 call. 

Assuming the remaining puts do indeed expire with no value, I exited for a $0.77 debit, producing a $0.23 loss, with shares at $126.46, up $4.35 from their entry level. If my assumption is wrong, then I shall update this analysis after expiration.

XLY began rising on the third day after entry and continued to rise until peaking on the 4th day prior to today’s exit. The implied volatility rank fell to a mere 1.5%, down 28.7 points from the entry level.

Shares rose by 3.6% over 37 days, or a +35% annual rate. The options position produced a 29.9% loss for a -295% annual rate.

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I have entered a short iron condor spread on XLY, using options that trade for the last time 39 days hence, on January 17. The premium is a $0.54 credit and the stock at the time of entry was priced at $122.11.

The profit zone for this position is between $126.54 on the upside and $113.54 on the downside.

The implied volatility rank (IVR) stands at 30.2%.

Premium:	$0.54	Expire OTM
XLY-iron condor	Strike	Odds	Delta
Long	128.00	92.0%	8
Break-even	126.54	86.5%	13.5
Short	126.00	81.0%	19
Puts
Short	116.00	84.0%	16
Break-even	113.54	87.5%	12.5
Long	113.00	91.0%	9

The premium is 21.6% of the width of the position’s wings.

The profit zone covers a 3.6% move to the upside and a 7.5% move to the downside of the entry price, for total coverage of 11.2%

The risk/reward ratio is 3.6:1, with maximum risk of $196 and maximum reward of $54 per contract.

By Tim Bovee, Portland, Oregon, December 9, 2019

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iShares 20+ Year Treasury Bond ETF (TLT)

Update 12/27/2019: I have exited my short iron condor position on TLT for a $0.36 debit, a profit of $0.37, with shares trading for $137.51,  down $1.32 from their level at entry. The exit price was at 50.7% of maximum potential profit, slightly above my 50% goal.

The underlying TLT stock rose for three days after entry and then began a gentle decline that lasted until December 19, when it began an equally gentle rise. The price remained within the profit zone throughout the holding period. The implied volatility rank stood at 22.5% at the exit, down 21.3 points from its level at entry.

Shares declined by 1% over 18 days, or a -19% annual rate. The options position produced a 102.8% return for a 2,084% annual rate.

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I have entered a short iron condor spread on TLT, using options that trade for the last time 39 days hence, on January 17. The premium is a $0.73 credit and the stock at the time of entry was priced at $138.83.

The profit zone for this position is between $144.73 on the upside and $131.73 on the downside.

The implied volatility rank (IVR) stands at 43.8%.

Premium:	$0.73	Expire OTM
TLT-iron condor	Strike	Odds	Delta
Long	147.00	90.0%	10
Break-even	144.73	85.0%	15.5
Short	144.00	80.0%	21
Puts
Short	134.00	81.0%	20
Break-even	131.73	86.0%	15
Long	131.00	91.0%	10

The premium is 24.3% of the width of the position’s wings.

The profit zone covers a 4.2% move to the upside and a 5.4% move to the downside of the entry price, for total coverage of 9.6%

The risk/reward ratio is 3.1:1, with maximum risk of $227 and maximum reward of $73 per contract.

By Tim Bovee, Portland, Oregon, December 9, 2019

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11:50 a.m. New York time

I’ve entered the following share positions in my upgrades and revisions portfolio: CRCM at $12.42 per share, FANH at $26.17, PWR at $40.47, SPAR at 18.01 and TLYS at 12.51.

11:05 a.m. New York time

I took a look at GDXJ as a short iron condor trade, which with an implied volatility rank of 21.1% is below my standard of 25% or greater. But, if I squint my eyes to blur the numbers, could conceivably pass muster.

But it didn’t. The risk-reward ratio of 4.9% is higher than I like. So I shall pass on GDXJ.

FXE, with an IV Rank of 25.8%, does meet my standard. However, FXE tracks the Euro, the UK is voting on December 12 in an election that could have a huge impact on how Brexit plays going forward, and therefore could prompt significant movements in the EUR/USD exchange rate. Generally, I’m averse to leaping into news maelstroms, and I shall pass on FXE.

That’s it for options. A sparse month with two positions, XLY and TLT. I’ll check tomorrow to see if any other prospects meet my IVR  standard.

10:40 a.m. New York time

I’ve entered a short iron condor position on XLY; analysis posted.

10:20 a.m. New York time

I’ve entered a short iron condor position on TLT and posted an analysis.

10 a.m. New York time

I’m removing XLP as a prospective short iron condor play. The IVR calculation dropped significantly in early trading.

9:35 a.m. New York time

I’m a week late in setting up my short iron condor plays constructed from options expiring January 17. The problem was — and is — a lack of volatility. My rules call for an implied volatility rank of 25% or above. That metric gives my potential profits enough of a boost so as to protect against loss and make the effort worth my while.

Every month so far this year I’ve been able to count on at least half a dozen exchange-traded funds on my prospects list meeting that requirement.

Not this month. Even the old reliable, precious metals, has failed to meet my minimum. I delayed making trading decisions for a week in the hope that volatility would inch up a little at least, but to no avail.

So, I’m setting aside my disappointment and dealing with a real world, a necessity for any trader. I have three potential trades if I go strictly by my rules: XLP, TLT and XLY. If I fudge the rules and allow trades down to an IVR of 20%, then I can add USO, if I can build a trade that meets my other standards. And if I round up the decision from 19.5% to 20%, then I can add FXE.

I’ll be looking at all four today and trading those that allow me to build a reasonable position. Or perhaps none at all. As one of my mentors long ago once said, an old hand in the options game, “You’re an amateur, and that gives you an advantage over the professional traders. Unlike them, you don’t have to take a trade.” Wise words.

My screen for the revisions portfolio has no exits and five additions: CRCM, FANH, PWR, SPAR and TLYS. I’ll be making those trades today.

By Tim Bovee, Portland, Oregon, December 9, 2019

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10:55 a.m. New York time

I exited three provisions from my portfolio guided by analyst revisions and upgrades, and entered one two position, leaving funds to enter two positions on the table for later.

AEIS went for a $64.75 credit, a profit of $3.31 per share, producing a 5.4% return over three days, or a $655% annual rate.

AEL was sold for a $29.89 credit, a profit of 91 cents per share, producing a 3.1% return over 14 days for a +82% annual rate.

BMCH brought in a $29.50 credit, a profit of 26 cents per shore, producing a 0.9% return over 17 days for a 195 annual rate.

The new kid on the screen is IBP, which I entered for a debit of $71.70 per share.

By Tim Bovee, Portland, Oregon, December 6, 2019

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3:30 p.m. New York time

The algorithm placed AMED onto the overnight Upgrades and Revisions screen, and I entered a position within the corresponding portfolio. The entry price was a debit of $165.65 per share.

By Tim Bovee, Portland, Oregon, December 5, 2019

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