Wednesday’s Agenda

Two of my prospects, RRC and TSLA, have sufficiently high implied volatility to qualify for further analysis and possibly trades.

Their APR-series options are trading for the first time today. Although open interest remains lower than I like, I shall bend the rules to open a trade, given the rapid growth of options liquidity for the series.

The third prospect, LB, has IV that remains a bit short of where it needs to be to support a trade. I’ll continue to monitor it during the day, but if IV is unimproved, then I won’t do further analysis.

By Tim Bovee, Portland, Oregon, Feb. 22, 2017

 

Wednesday’s Prospects

Newly minted APR-series options grids have been added to several symbols that are publishing earnings for acton on Wednesday. They are TSLA, RRC and LB. The options expiring in April are my preferred vehicle at present.

None of the APR grids show any open interest as of yet. TSLA has the highest share volume of the three and so is most likely to be tradable. I shall make a final decision on analysis of the three prospects after the opening bell.

By Tim Bovee, Portland, Oregon, Feb. 21, 2017

 

Tuesday’s Outcomes

Implied volatility on TJX rose sufficiently during the day to support analysis and a trade.

I have an order in to exit BP at my target price.

However, it has not yet been filled and appears unlikely to be. None the less, I shall leave the order active and, if it is filled, update Outcomes after the closing bell.

By Tim Bovee, Portland, Oregon, Feb. 21, 2017

 

TJX Analysis

 

The TJX Companies Inc. (TJX)

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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The Week Ahead: Holiday, homes, manufacturing, FOMC minutes

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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Tuesday’s Prospects

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

 

Friday’s Outcomes

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

 

WMT Analysis

Wal-Mart Stores Inc. (WMT)

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.

The price used for analysis was $69.03.

Premium: $3.79 Expire OTM iron fly
WMT   Odds Delta
Calls
Long 75.00 91.0% 10
Break-even 71.29
Short 67.50 41.6% 62
Puts
Short 67.50 58.2% 39
Break-even 63.71
Long 60.00 92.1% 19

The premium is 51% of the width of the position’s wings.

The risk/reward ratio is 1:1.

Decision for My Account

I have entered a position on WMT as described above. The stock at the time of entry was priced at $69.06.

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