Investors Observer Workshop. Wednesday, May 24, noon ET

Transcription

1 Investors Observer Workshop Wednesday, May 24, noon ET

2 Debby Clowney MBA, Chicago Booth BA, U. of Pennsylvania 20+ years options experience Worked on Wall Street Consultant for KPMG Workshop Coach: Debby Clowney Our goal today is to provide a workshop where we discuss how to translate the Trade Idea Generator s ideas into profitable trades. We will talk both concepts and practical tips to make and manage the trades. We encourage you to ask questions throughout the workshop. If you have a question, likely others have the same question. My colleague, Bobby Raines, will be joining us and fielding questions or bringing them to my attention as we go along. To get the most out of today s workshop, I will ask that you have your Trade Idea Generator launched and during the case studies that you follow along with me. Jot down names of stocks you would like me to review in the Firing Line portion of our workshop.

3 Disclaimer Today s webinar is for educational purposes only. Nothing in today s presentation should be considered a recommendation to buy or sell any security. All stocks and options shown are examples only. Any pricing or potential profitability shown does not take into account your trade size, brokerage commissions or taxes which will affect actual investment returns. Stocks and options involve risk and are not suitable for all investors and investing in options carries substantial risk. Past stock or option performance is no guarantee of future price appreciation or depreciation. Prior to buying or selling options, a person must receive a copy of Characteristics and Risks of Standardized Options available at:

4

5 What we will do in our STATE OF THE MARKETS What will drive the markets from here? What is the S&P weekly chart telling us about overall trends? Zeroing in on the S&P daily chart How is the Nasdaq doing compared to the S&P? How are small caps (the Russell) doing compared to the S&P? What is the volatility index telling us? How should market conditions guide our trades?

6 SPY -- bouncing back from big swoon on political uncertainties Trump rally, part 2 Highs Highs Highs Pullback Retesting highs of beginning and middle of March, and highs set earlier this month. Broke key 50 day moving average, but failed to close below it

7 NASDAQ is also near its highs Breakout Consolidation NASDAQ goes on a run

8 Small caps remain range bound as they have been all year consolidation 2 failed breakout attempts

9 International markets are also strong (VEU ETF)

10 Temporary spikes in volatility on Washington political turmoil Healthcare bill pulled Fallout from Comey firing The volatility index is sometimes called the fear index, because when the market is under pressure, volatility rises. Volatility is at its lowest level in years.

11 What we will do in our STRATEGIES Participating in an earnings trade AFTER earnings Case study in 3D Printing How do we adjust strategies for a down market?

12 Trading AFTER Earnings 3D Systems misses earnings estimates by $0.04, reports revs in-line; guides FY17 EPS and revenues in-line. Strike of sold call Earnings

13 Trading AFTER Earnings 19 Strike for sold call Sell covered call May 9 Earnings May 3 after the close

14 Trading AFTER Earnings Purchase stock for Sell Jun DDD 19 Call for $ Strike for sold call Net cost What stock price makes this a breakeven trade? How much could the stock drop and we would still make our max profit?

15 Trading AFTER Earnings Why is this a 49% annualized return? 19 Strike for sold call

16 What is meant when traders refer to bull markets as climbing a wall of worry?

17 Important icons on your chart Most important Linear Regression, i.e., the channel the stock is trading in

18 Important icons on your chart Comparing a stock to... the market its sector its competitors All Stock Futures Forex CFD Bitcoin Index Economy Quandl You can check a market index type in a sector description or ETF symbol type in a competitor s company name or symbol

19 Featured Trades

20 TIG Screens

21 Investors Observer s Option Trading Framework 1 FIND Early exits with full profits Early exits partial profits 5 EXIT Featured Trades Trade Finder 2 CHOOSE Charts News Strategies 4 MANAGE 3 ENTER Exiting diagonal LRCX in 16 days Order types What you need to know about your broker

22 May 3 opened a Jan 120 June 150 Diagonal for a net debit of May 19 th LRCX gaps up and trades between 151 and 153 Our GTC exit order for gets filled after just 16 days Our profit is 1.50/ or 5.26% Our annualized return on this trade is 120% Why were we filled so quickly on this, and not filled early on the BAC diagonal we reviewed last workshop?

23 NEXT WORKSHOP

24 FIRING LINE What names would you like me to analyze? We can look at the support and resistance lines on these charts Also, a thank you! to the many of you who are completing our survey and letting us know what topics you would like covered in the future, and what is most helpful or what is confusing in our presentations. -- and let us know whether or not your are interested in earning more about candlestick interpretation.