Category Archives: Options

Checking In on the Triplets

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On this very quiet weekend, I thought I’d check in on the three ETFs against which I own June 2018 puts. As is obvious, these are puts with a deliberately large amount of time left on them (nearly 200 days), which gives them at least some opportunity to work out. Recent market action hasn’t been terribly encouraging, but they’re all three still in the money, and like I say, there’s lots of time left.

The first one is the financials, which has one of the cleanest analogs I’ve ever seen in my life.

slopechart_XLF

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Quintet Update

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Here I am on another plane, trying to squeeze a few ones and zeroes out of the pathetic GoGo “broadband” (more like a thin straw) to the Internet. But duties to Slope reign supreme, so I will make the best of it.

I wanted to offer a view of my five options positions, by way of the underlying instruments. I own in-the-money, long-dated puts on these, spanning as far out as June of next year. My intent, based on my target prices of the underlying, is to double my investment in each of these but, ahhh, we’ll see how that goes.

First up is Brazil, which I did a brief post about earlier today. This is a new position, entered today ,and it needs to break last week’s lows to crack that trendline.

slopechart_EWZ

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Our Top Names Versus The Market

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Each week since June 8th, we’ve been presenting the top 10 names in Portfolio Armor‘s daily ranking to subscribers of a service we run on another site. The performance of our top 10 names from June 8th and eight subsequent weekly cohorts exemplifies the alpha our security selection delivers, as we elaborate below.

How Our Security Selection Method Works

In a nutshell, here’s how our method works. First, we apply our 2 screens to avoid bad investments. Then, for the securities that pass both screens, we start with the assumption that securities will begin to revert to their long term average returns over the next several months, and then we use our gauge of option market sentiment as a “sanity check” on that to arrive at a potential return estimate. We then subtract the cost of hedging from each potential return, and rank every name by potential return, net of hedging cost. The top 10 names each week refer to the top 10 names on that ranking. (more…)

Methanex Trade

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Note from Tim: I got a nice email from a Sloper who thought the blog could use some trades more at the beginner level; he kindly included two of his own to get things started. Here is the second…….

The concept is to post a trading idea that starts a discussion about the trade. The post is for novices like me to learn from each other especially from the experienced Slopers. I have laid out the basics of the company, the trade idea and then the charts. As you can see, the charts are very basic and hopefully will become more sophisticated as experience and feedback occurs. Please join in the trading discussion:

  • Methanex Corp (MEOH) Produces and supplies methanol. EPS is projected to increase 2,436% mainly because of recovering from a loss in 2016.
  • IBD ranks them 12th in their group with an overall composite rating of 80, Zacks rating is a 2 (1 – 5 rating, 1 strong buy, 5 strong sell) and Thomson Reuters has an average of a buy rating from 13 analyst.
  • Stock has low liquidity
  • MACD showing down

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