The TJX Companies Inc. (TJX)

Update 4/4/2017: TSX rose after earnings were published and then began tracing a sideways correction. A downward move within the zig-zag pattern combined with tine decay and lower implied volatility brought the position to my target price, which is 25% of maximum potential profit. I exited.

At exit shares were up 1.7% over 42 days, or a +14% annual rate. The options position produced a 33.3% yield on debit for a +290% annual rate.

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TSX publishes earnings on Wednesday before the opening bell.

I shall use the APR series of options, which trades for the last time 59 days hence, on April 21.

Implied volatility stands at 23%, which is 1.9 times the VIX, a measure of the volatility of the S&P 500 index.

TJX’s IV stands in the 40th percentile of its annual range and the 51st percentile of its most recent broad movement.

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My lone prospect for the day, an earnings play on TJX, remains deficient in implied volatility early in the trading day. I shall do an analysis and possibly a trade if it improves; otherwise, not.

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U.S. markets will be closed on Monday for the President’s Day holiday.

Two residential real estate reports will be published during the week: Existing home sales on Wednesday and new home sales on Friday, each at 10 a.m. New York time.

Also out, the Purchasing Managers Institute manufacturing index flash report on Tuesday at 9:45 a.m.

The Federal Open Market Committee minutes ftom money regulators’ Feb. 1 meeting will be released on Tuesday at 2 p.m.

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I have one potential earnings play with sufficient liquidity to warrant a further look on Tuesday, the first trading day after a three-day weekend in U.S. markets to observe the President’s Day holiday.

However, the prospect — TJX — has implied volatility that is a bit low in relation to its most recent broad movement, and even lower in connection with the one-year range. I shall analyze TJX further only if one or the other of those metrics rises to the 50th percentile or better of the range.

By Tim Bovee, Portland, Oregon, Feb. 17, 2017

 

I entered an earnings play on WMT. The company publishes earnings on Tuesday before the opening bell, but I entered on Friday, earlier than is my usual practice, because Monday is a market holiday.

I exited no positions.

By Tim Bovee, Portland, Oregon, Feb. 17, 2017

 

Wal-Mart Stores Inc. (WMT)

Update 3/21/2017: WMT gapped down sharply on the fifth trading day after earnings were published and afterward traced out a zig-zag, the sign of a sideward trend. I exited at 12.9% of maximum potential profit, a bit more than half of my normal 25% target.

The WMT position had about 50% more dollar-value risk than my guidelines suggest, an effect of the interaction between the strike prices and the options premium. I took the early exit because of uncertainty over how the sideways trend would resolve itself. Had the strike price fallen, I would have had plenty of cushion to keep the position profitable. But a rise of only $2 would have made the position unprofitable.

In exiting I eliminated the risk and attained my dollar-value goal. However, I fell short of my percentage goal.

Shares rose by 1.6% over 32 days, or a +788% annual rate. The options position produced a 14.9% yield on debit for a +169% annual rate.

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WMT publishes earnings on Tuesday before the opening bell. U.S. markets are closed on Monday for the Presidents Day holiday.

I shall use the APR series of options, which trades for the last time 63 days hence, on April 21.

Implied volatility stands at 22%, which is 1.9 times the VIX, a measure of the volatility of the S&P 500 index.

WMT’s IV stands in the 52nd percentile of its annual range and the 97th percentile of its most recent broad movement.

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The agenda is empty, with no potential entries on my desk and no exits in sight. It is a day for study and reflection, while of course keeping an eye on my holdings.

By Tim Bovee, Portland, Oregon, Feb. 17, 2017

 

I have no prospective trades in sight for Friday.

By Tim Bovee, Portland, Oregon, Feb. 16, 2017

 

I had no prospective new positions on my desk today and entered no new positions. I exited no positions.

I am attempting an exit of my position on BP, but it has not yet been filled and appears unlikely to be at this point. If it should be filled before the closing bell, then I shall update Outcomes.

I am breaking off my trading early today to meet another commitment.

By Tim Bovee, Portland, Oregon, Feb. 16, 2017

 

I have no prospective trades for analysis on Thursday.

By Tim Bovee, Portland, Oregon, Feb. 15, 2017