#Earnings This may bode well for the market if NFLX is going to gap this high.
#VIXindicator Looking back at all 54 Downside Warnings gives us some data to view our current correction. Below are three charts with the Average Move down on each day of the correction. (I omitted the black swan 2008 financial crisis).
Day 1 is the day the Downside Warning fired (at the close). The percentages are how far the LOW of the day on $SPX has moved, as measured from the CLOSE of the day before the warning. So in the current correction (in color), which fired on Oct 5, the day 1 move of -1.1% is the low on Oct 5th, measured from the close on Oct 4th. Day 2 is the low on Monday the 8th, and so on.
The first chart includes all 54 corrections. The first three days include all 54, but the 4th day is an average of 53 corrections, since one was only three days long and drops off the list. This only goes to 23 days… the longest correction lasted 165 days. The data here says we are above average so far.
Considering the current correction is now 8 days long, I created the second chart, which looks at only those corrections that lasted between 9 and 19 days. The data here says we are above average for short corrections, so this one may end up being a little longer.
And the third chart is those corrections that were in the 4-8% range on days 4-7, just like our current one. This data suggests we may stay in the current range (down 5% or so) for several days to come).
Or it all may mean nothing! But it’s fun to geek out occasionally.
Panic buying into the close!
All of my long #Pre-Earnings trades (except CAT) are back on the map today, although definitely still weak. $VALE and $AMZN are best, at breakeven…. and that’s with VALE being the only underlying that is NOT up today.
ROKU STO 10/19/18 60.0 PUTS @.68
Betting NFLX will stay between 300 and 400 after ER today.
BOT NFLX double calendar Oct19/Oct26 -342.5c/-342.5p/+342.5c/+342.5p @ 3.15
Downward momentum slowing after the big post-earnings move down this morning. Going the other way looking for more stabilization/a bounce and contracting volatility.
Sold $GWW Nov 16 250/240 BuPS @ 1.30 credit.
First time looking at the market today. That is what a short covering rally should look like 🙂
#PreEarnings It’s feverish of me to add to such a dog, but it actually lowers my cost basis to .567, which I think gives this a good shot at breaking even. Plus, it only costs me scratch.
Bought $CAT Oct 26th 165 calls for .06, adding to my position.
#LongLEAPs I sold my stock and Jan 2019 60 calls on the 5th, when $SQ was at 94.50. Man, what a drop! Now looking to leg in long again.
Bought to Open $SQ Jan 2020 110 call for 7.40.
Sold $SQ Oct 26th 80 call for 1.50.
I play this one a bit differently than @fuzzballl, going fairly far OTM rather than ATM. SQ topped out at 101.15 on Oct 1st, and this LEAP was going for 19.00 and higher.
TNDM BTO STOCK @37.96 Watched it creep up from 37.08.
Rolled the November 16, 75 calls down to the October 26, 57 calls for a credit of 3.45
ESPR BTC 10/19/18 50.0 CALLS at a small profit. Stock is up over 3 points. Didn’t roll out. Earnings next week. Something going on?
#Earnings Below are details on $IBM earnings 1-day moves over the last 12 quarters.
July 18, 2018 AC 3.26%
April 17, 2018 AC -7.53%
Jan. 18, 2018 AC -3.99%
Oct. 17, 2017 AC 8.86%
July 18, 2017 AC -4.20%
April 18, 2017 AC -4.91%
Jan. 19, 2017 AC 2.24%
Oct. 17, 2016 AC -2.61%
July 18, 2016 AC -0.17%
April 18, 2016 AC -5.59%
Jan. 19, 2016 AC -4.87%
Oct. 19, 2015 AC -5.74%
With stock at 142.00, the data suggests these ranges.
Based on current IV (expected move per TOS): 135.23 to 148.77
Based on AVERAGE move over last 12 quarters: 135.61 to 148.39
Based on MAXIMUM move over last 12 Q’s: 129.42 to 154.58
#Earnings Below are details on $NFLX earnings 1-day moves over the last 12 quarters.
July 16, 2018 AC -5.24%
April 16, 2018 AC 9.18%
Jan. 22, 2018 AC 9.97%
Oct. 16, 2017 AC -1.57%
July 17, 2017 AC 13.54%
April 17, 2017 AC -2.64%
Jan. 18, 2017 AC 3.86%
Oct. 17, 2016 AC 19.02%
July 18, 2016 AC -13.12%
April 18, 2016 AC -12.97%
Jan. 19, 2016 AC -0.13%
Oct. 14, 2015 AC -8.29%
With stock at 333.00, the data suggests these ranges.
Based on current IV (expected move per TOS): 299.36 to 355.64
Based on Average move over last 12 quarters: 305.38 to 360.62
Based on MAXIMUM move over last 12 Q’s: 269.66 to 396.34
Bought to close:
$TSLA Nov 16 80 puts @ .44. Sold for 1.13 on 9/28.
$TSLA Nov 16 120/385 strangles @ 1.75. Sold for 3.72 on 9/28.
#ShortStrangles – Dropping slightly with news of some buyout. Taking a shot at a little strangle in the week prior to earnings.
Sold TWLO NOV 2 2018 60.0/80.0 Strangles @ 2.06
#Earnings looking good for financials, lifting futures.