6/14 – 3:05 p.m. New York time
I entered two new positions today: KR and KRE.
My exit order on NVDA remains unfilled; I shall keep it alive for the rest of the trading day.
Author: Tim Bovee
QQQ Analysis
PowerShares QQQ Trust Series 1 (QQQ)
Update 6/23/2017: QQQ declined slightly after entry and then returned to near the entry point. I rolled the position twice, each time gaining a bit more credit in order to make a profitable entrance, at 14.8% of maximum potential profit.
Shares rose by 0.9% over 10 days, or a +31% annual rate. The options positions produced a 17.35 yield on debit for a +633% annual rate.
QQQ at Monday’s close stood at a high level of implied volatility compared to its most recent trend. However, that metric has declined in trading on Tuesday, making QQQ less attractive. Even so, the IV multiple of the VIX still qualifies it for a closer look.
I shall use options that trade for the last time 10 days hence, on June 23.
Implied volatility stands at 15%, which is 1.4 times the VIX, a measure of the volatility of the S&P 500 index.
QQQ’s IV stands in the 34th percentile of its annual range and the 47th percentile of its most recent broad movement.
XLK Analysis
Technology Select Sector SPDR Fund (XLK)
XLK stands at a high level of implied volatility compared to its most recent trend and so is worth looking at more closely as a potential trade.
I shall use options that trade for the last time 10 days hence, on June 23.
Implied volatility stands at 15%, which is 1.4 times the VIX, a measure of the volatility of the S&P 500 index.
XLK’s IV stands in the 44th percentile of its annual range and the 50th percentile of its most recent broad movement.
FB Analysis
Facebook Inc. (FB)
Update 6/16/2017: FB traded sideways during the brief lifespan of this trade, and I exited at 4.8% of maximum potential profit.
Shares declined by 1.0% over three days, or a -121% annual rate. The options position produced a 5.0% yield on debi for a +610% annual rate.
FB stands at a high level of implied volatility compared to its most recent trend and so is worth looking at more closely as a potential trade.
I shall use options that trade for the last time 10 days hence, on June 23.
Implied volatility stands at 19%, which is 1.8 times the VIX, a measure of the volatility of the S&P 500 index.
FB’s IV stands in the 36th percentile of its annual range and the 55th percentile of its most recent broad movement.
AAPL Analysis
Apple Inc. (AAPL)
Update 6/22/2017: AAPL remained in a narrow sideways trend during my holding period, and I have exited, ending the roll series at 33% of maximum potential profit.
Shares showed a net decline of 0.5% over nine days, or a -20% annual rate. The options position produced a 48.6% yield on debit for a +1,971% annual rate.
Update 6/16/2017: I have rolled AAPL forward to a new position that trades for the last time 14 days hence on June 30. The strike prices remain unchanged — that’s what makes it a roll rather than a new position — and the roll produced an additional $0.44 in premium, increasing the total credit for the roll series $3.79.
I shall defer calculating results until the series is complete.
AAPL stands at a high level of implied volatility compared to its most recent trend and so is worth looking at more closely as a potential trade.
I shall use options that trade for the last time 10 days hence, on June 23.
Implied volatility stands at 18%, which is 1.8 times the VIX, a measure of the volatility of the S&P 500 index.
AAPL’s IV stands in the 41st percentile of its annual range and the 51st percentile of its most recent broad movement.
Live: Tuesday, June 13, 2017
Live: Monday, June 12, 2017
The Week Ahead: Interest rates, prices, retail, housing, industry
The Federal Open Market Committee two-day meeting will culminate with an announcement and release of forecasts on Wednesday at 2 p.m., followed by a news conference with Chair Yellen at 2:30 p.m.
The FOMC in 2008 lowered its fed funds rate to a range of from 0.00% to 0.25% on Dec. 16, 2008, and kept it there for long valley of the Great Recession. The money regulators began raising rates seven years later, on Dec. 17, 2015, by a quarter point to 0.25% to 0.50%, and has since raised the target twice, at quarter-point intervals: On Dec. 15, 2017 to 0.50% to 0.75% and last March 16, 2017 to 0.75% to 1.00%.
If they were to raised rates at this week’s meeting, it would be the first break with one-year intervals in nine years. Will they or won’t they? And will the markets care?
Five economic reports of note will be published during the week: At 8:30 a.m., the producer price final demand index on Tuesday; the consumer price index and retail sales on Wednesday, and housing starts on Friday. The industrial production stats will be out on Thursday at 9:15 a.m.
NVDA Analysis
NVIDIA Corp. (NVDA)
Update 6/15/2017: NVDA traded sideways during the period I held the position, and I exited at my target price of 25% of maximum potential profit.
Shares declined by -1.0% over six days, or a -60% annual rate. The options position produced a 33.3% yield on debit for a +2,025% annual rate.
NVDA has sufficiently high implied volatility on all the metrics I use — against the annual range, current trend and VIX — that it is worth examining for a trade.
I shall use options that trade for the last time 14 days hence, on June 23.
Implied volatility stands at 42%, which is 4.1 times the VIX, a measure of the volatility of the S&P 500 index.
NVDA’s IV stands in the 52nd percentile of its annual range and the 75th percentile of its most recent broad movement.
Live: Friday, June 9, 2017
6/9 – 3:00 p.m. New York time
In today’s trading outcomes, I exited GLNG , FL and AMBA for losses and entered NVDA as a direction neutral position.
MSFT’s price declined suddenly on news reports of a possible lawsuit. Although it expires a week from today, I intend to hold the position in anticipaton of a rebound on Monday that would, best case, return the position to profitability or, less bad case, mitigate the loss.
6/9 – 12:45 p.m. New York time
I have exited GLNG , FL and AMBA for losses and shall update their analyses with results shortly.
I have decided to delay an exit of THO until next week. Elliott wave analysis suggests that the trend is down, toward profitability.
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