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Filter Exchange · This might be impossible
xarlor
msg #152174
5/12/2020 9:40:22 PM

I picked up TORC for $1.71 myself when my original filter flashed it. Selling the Jun2020 $2.50 calls against the shares. If it gets up to $2.50 by expiration, my shares get called away at that price, but it's still a 46% profit plus the premium of the sold calls.

I know you said a few months out, but I'm excited to see what you've come up with kossvet!

Filter Exchange · Price Coming Off of a PVI Low
xarlor
msg #152153
5/11/2020 10:06:33 AM

Whoops! nibor is right. The corrected filter and instructions are below:

Fetcher[
average volume(5) > 100000
sector(medical)

set{diff1,ma(5) - ma(10)}
set{diff2,ma(10) - ma(20)}

set{vol2,average volume(5) 5 days ago * 2}

set{var1,count(volume > vol2,1)}
set{var2,count(ma(5) increasing for last 3 days,1)}
set{var3,count(ma(10) increasing for last 3 days,1)}
set{var4,count(ma(20) increasing for last 3 days,1)}

set{var5,count(diff1 increasing for the last 2 days,1)}
set{var6,count(diff2 increasing for the last 2 days,1)}

set{var7,count(atr(30) 3 days ago < .2,1)}
set{var8,count(reached a new high 3 month high,1)}

set{buy1,var1 * var2}
set{buy2, buy1 * var3}
set{buy3, buy2 * var4}
set{buy4, buy3 * var5}
set{buy5, buy4 * var6}
set{buy6, buy5 * var7}
set{buy, buy6 * var8}
buy > 0
buy 1 day ago equals 0

/* Comment out the 2 lines above and uncomment the 3 lines below to see all hits within the last year */
/* chart-time is 14 months */
/* count(buy > 0,251) > 0 */
/* count(buy 1 day ago equals 0,251) > 0 */

draw ma(5)
draw ma(10)
draw ma(20)
]



Stock Picks and Trading · Picks and Pans Since Jan 2020
xarlor
msg #152152
5/11/2020 8:25:37 AM

The Greeks (delta, theta, gamma, rho) are definitely the hardest part to learn for any new options trader. Good news, you don't need to be an expert on the Greeks to trade options. Understanding will come with time. When starting out, concentrate on Delta and Theta.

Delta is used as an estimate of probability. A .30 (calls) or -.30 (puts) Delta on an option indicates that strike price has a 30% probability of being in the money (ITM) at expiration. Likewise a .80 Delta would have an 80% probability of being ITM at expiration.

Theta is how much value that option loses per day. So a Theta of .05 means that option loses .05 of its value each day. The most important thing to note about Theta is it accelerates the closer you get to expiration. The last 30 days accelerate a lot more. Buying options with a 90-day DTE, the value will drop by fractions of a penny. Buying an option 20 days out, you're losing several cents per day.

The best advice I can give is don't change what's been working for you. Learn options strategies as a tool that's there when you need it. For example, when trades go against you, pull out your toolbox to see what you can do to mitigate losses or even turn them around for a profit.

As for set ups I like, the Larry Connors ones have worked really well for me. I've stayed away from them during the lock-down because I still feel we have another big crash coming. Of course, I'm missing out on this crazy bull run (dead cat bounce?) because of it.

For Options, the most consistent winners are selling Put Credit Spreads on TLT at .30 Delta and 30-45 DTE every week.

The Wheel strategy is another great options play with a potential for four different ways of making money. It sounds complicated, but it's just a combination of different strategies in a loop. Once you get a good handle on options trading it will "click" one day and you will see the beauty and elegance of the strategy.

General Discussion · Days ago issues.
xarlor
msg #152148
5/10/2020 10:01:05 PM

Working fine for me. Every returned stock has a close 2 days that is lower than the day before it. What were you expecting to see?

Fetcher[
Show stocks where the close 2 days ago is below close 3 days ago
]



General Discussion · MA(10) and MA(20) crossed 10 to 20 days ago and MA(20) stay MA(10)
xarlor
msg #152145
5/10/2020 3:47:45 PM

You didn't specify which direction you wanted the cross. MA(10) crosses above or below MA(20)? I went with above in this filter.

Fetcher[
ma(10) 10 days ago crossed above ma(20) 10 days ago within the last 10 days
ma(10) > ma(20) for last 9 days
]



Stock Picks and Trading · Picks and Pans Since Jan 2020
xarlor
msg #152140
5/10/2020 10:46:39 AM

Ah, that link helps explain what you're going for. SF doesn't do monthly charts, only weekly or daily. Here is that chart recreated in weekly.

Fetcher[
symlist(SPY)
set{x1,count(ROC(52) crossed above 0,1)}
set{x2,count(ROC(52) 1 week ago < -5,1)}
set{x,x1 * x2}
set{y,ROC(52)}

draw ROC(52)
draw ROC(52) line at 0
draw ROC(52) line at -5
draw x
chart-display is weekly
chart-time is 3 years
]



I assume that my broker would see my 10 contracts of Jan 2022 3C and therefore would allow me to "sell" 10 contracts of the short dated calls provided I have enough money in the account.
Yes, brokers take into account your holdings when selling in a margin account. If you have collateral already, no margin is used. If you don't, they will take a hefty margin hit on your total buying power since you are selling naked.

- For a CALL option, if there a significance between "bought at ASK" vs "bought at Mid or Bid"?
Unless the difference between BID/ASK is a penny, never buy at the ASK. ASK prices are overpriced and BID prices are undervalued. Always try for the MID or a penny or two off it. Tight BID/ASK spreads represent good liquidity. Very wide ones represent low liquidity (see next answer for details).

- For CALL or PUT; does Volume traded vs Open Interest mean anything?
Open Interest is liquidity. If there is no Open Interest, it'll be hard to get filled. If you do get filled, you are going to have an even harder time trying to sell it back unless something significant happens. This means you may have a 50% profit at the MID, but no one is going to take it off your hands. You may only get filled at the BID, which could actually be loss if the BID/ASK spread is wide enough. Volume is not so important other than telling you there is action happening today.

- Is there a way to compare current stock volatility vs its historical volatility?
Yes! I use ThinkorSwim and have a custom script that shows a stock's current IV Rank. IV Rank is a figure that tells you how high the stock ranks as compared to the last 12 months of that stock's IV. If its rank is above 50, that means it is currently higher than it has been for 6 out of the last 12 months. If its rank is 100, that means IV for that stock has never been this high in the last 12 months. This video explains it better: https://www.youtube.com/watch?v=KvuQGqKBh2U

If you're serious about learning the options world, this is the best educational source I've found. Do Track #1 Beginner and see if those videos make sense. https://optionalpha.com/members/tracks

I sent you a hangouts request for DMs.

Stock Picks and Trading · Picks and Pans Since Jan 2020
xarlor
msg #152128
5/9/2020 6:03:11 PM

Not sure if this is what you were looking for. x is "bull" or "no bull". y is how much of a bull or how much of a bear.

Fetcher[
symlist(SPY)
set{x,count(ROC(52,10) > 0,1)}
set{y,ROC(52,10)}
draw x
draw y
PlotType{y,zerobar}
chart-display is weekly
chart-time is 3 years
]



- I am essentially "selling" short term calls with the probability that the price does not go above the strike price in order to collect the premium and repeat it enough to lower my cost base.
- to do this, I need to always have a further dated call as a "collateral" to sell because I do not want to buy(?) the stock.

You got it! The collateral is there to prevent the following scenario:
Say you sell -10x Jun2020, $3 calls for $1.00 each for a cool $1,000 premium, but don't own later dated calls, i.e. selling naked calls. You don't think HTZ is getting to $3 by then, no way. End of May, let's say we find out drinking vinegar kills Coronavirus. The world is cured, everything goes back to normal!

HTZ jumps up to its previous high of $20. Call buyers exercise their calls and you get assigned all 10 of your shorts. You are forced to sell them 1000 shares at $3 so you collect $3,000. However, you owe the broker 1000 shares and the cost to cover is now $20*1,000 = $20,000. Subtract the $3,000 you collected plus the $1,000 from selling the calls and you're sitting at a whopping loss of $16,000. What if HTZ jumps to $50 because all the other rentals went bankrupt? The point is, naked calls are infinite risk.

But wait! You had 10 Jan2022 calls. You get assigned, you sell 1000 at $3, collect $3,000. Exercise your Jan2022 calls, paying $3,000. Your loss here is whatever you paid for the 10 Jan2022 calls minus $1,000 for the premium you received when you sold the Jun2020. The assignment/exercise cancel each other out.

Now, on selling the shorter term calls to collect premium...I would hazard to guess that I should look at doing that with higher IV strikes combined maybe with the stock at the upper BB or RSI > 90?

If you can get high IV, definitely. However, don't sit on your hands waiting for that high IV. More often than not, it won't come. Most important is days to expiration (DTE). The closer you get to expiration, the less premium you will receive. Shoot for 30 - 45 days DTE when selling calls.

I am not sure if conceptually I am on the right path or maybe my brain is going to a place where it should not go ....

You're definitely on the right path!

Stock Picks and Trading · Picks and Pans Since Jan 2020
xarlor
msg #152126
5/9/2020 1:57:13 PM

So HTZ needs to get up to 7.60 by expiration for you to break even on the entire position. Feasible if you hold that long, but why not make your remaining contracts earn you money while you wait?

If you sell -10 $3 June 2020 call contracts for $1.35 (as an example) and HTZ stays below $3 through expiration, you pocket $1,350 and still own 10 Jan 2022 call contracts. Alternatively, buy back the 10 contracts if their price drops 50% to collect $675 and take profits off the table. Either decision, you can then do it again for July 2020. Keep doing it as long as it stays under $3 and you can keep collecting credit.

So what's the risk? If HTZ is above $3 at expiration, you will be assigned to sell 1000 shares of HTZ at $3, regardless of the current price. That means you either buy 1000 shares at market value (not recommended) or exercise your 10 Jan 2022 contracts to cover the short. Either way, you keep any credits you've made up to the point of assignment. This is a Calendar Spread strategy.

What if $3 is too close for comfort? Well, then you can do a Poor Man's Covered Call. Instead, sell -10 $4 June 2020 contracts for $95 (as an example). You take in only $950 here, but it gives you more wiggle room to make sure the contracts expire worthless and you keep the full premium. In this scenario, if the stock does rise above $4, then you are assigned and forced to sell HTZ at $4. However, your insurance is set at $3, so you exercise your Jan 2022, make a $1000 profit because of the strike difference, PLUS whatever premium you've already collected. You can keep doing this every month too so long as the price at expiration stays below your sold contracts strike and you are not assigned.

Just remember, while selling calls, always hold on to your long contracts. This is your collateral. You don't want to be naked on calls.

I know it's a lot to take in, but it does lower your total loss if you take the time to learn. There is plenty of literature and videos for both Calendar Spreads and Poor Man's Covered Call strategies. Also, I will be happy to explain more if you like, either here or privately.

Stock Picks and Trading · Picks and Pans Since Jan 2020
xarlor
msg #152121
5/9/2020 10:55:30 AM

I see you said you're holding on to 10 HTZ calls. Which calls are they and if you don't mind, what was the original price? If the expiration is far out enough, you may be able to recoup some of the loss with a Calendar strategy (or something else).

So many things you can do with options other than buy long calls/puts then sell them. I know I said it before, but it pains me to see anyone lose more money than necessary when a position goes against them. Also, it'll help you get over your emotional mistakes when you see you can turn a "bad" loss into just a "loss".

Stock Picks and Trading · Picks and Pans Since Jan 2020
xarlor
msg #152117
5/8/2020 10:31:10 PM

I know you've seen the comparisons between the Great Depression chart and the current chart. This is something I've been doing for the past couple weeks.

I take the WEEKLY Dow Jones Industrial Average (DJIA) chart of the Great Depression.
I take the DAILY DJIA chart of the current situation, dubbed the Great Lockdown.
I superimpose the latter on the former and get chills.



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