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Nick Chiu
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Senior Options Trading Strategist at Optionity, MBA. Our trading approach starts with the fundamentals, then through short-term technical analysis, to finally leverage options trading (with the combination of long and short positions) to achieve favorable risk and reward ratio trading plays. Our... More
My company:
Optionity
My blog:
Optionity - specialized in Options Trading
  • Optionity Daily Report 03/06/2013 0 comments
    Mar 6, 2013 6:25 PM | about stocks: SPY, AXP, CHL, CSCO, F, GE, INTC, KO, MDLZ, MMM, MSFT, ORCL, PEP, PFE, QCOM, SYY, TEVA, TSM, UTX, VOD, WM

    Date: March 6, 2013

    Daily Market Statistics

    Source: Barrons

    S&P 500 5-Day Daily Chart

    (click to enlarge)

    Source: Google Finance

    Economic Calendar

    (click to enlarge)

    Source: Briefing

    Options Market Recap

    The market sentiment was driven by greed with Fear & Greed Index at 69, which remained the same as the previous day closing of 69. As reported by CBOE, the total put/call ratio was 0.71 for the day. The index put/call ratio was 0.70, and the equity put/call ratio was 0.54. The CBOE volatility index (VIX) put/call ratio was 0.26. The stocks with unusual call activities had been identified through our daily options scanning process, with the scanning criteria where the daily call option volume ratio was above 2.00 (2x of the average call option volume) with a call option volume above 20,000. Unusual option activities can be an indicator or precursor of a major movement for the underlying stock.

    For the complete list, please visist Optionity.com

    Market Volatility and Analysis

    (click to enlarge)

    For Option Equity Put/Call Ratio, the MACD (12, 26, 9) turned to bearish now. RSI (14) is indicating a bearish lean and closed at 44.63 (previous closing of 49.71). MACD Histogram is currently at -0.005. Both MACD and RSI are bearish now; however, If MACD and RSI both become bullish, then market is expected to decline.(click to enlarge)

    SPDR S&P 500 ETF Trust (NYSEARCA:SPY)

    SPY opened higher and closed slightly higher at $154.50 (+0.14%). The volume was 19.83M. On weekly basis, the MACD (12, 26, 9) is showing a bullish trend and the MACD Histogram increased and closed at 0.686. SPY is currently trading above its 200-day MA of $119.10 and its 50-day MA of $140.23. RSI (14) increased to 72.59 from 72.32 with an increasing buying momentum. The next resistance is $161.81 (R2).

    Optionity Core-20 Options Portfolio (Credit Put Strategy)

    Stock criteria:

    1. Large Cap with low beta
    2. Fair/Under-valued
    3. Consistent, strong earnings
    4. Dividend distribution
    5. High liquidity, large volume
    6. Good/strong economic moat

    This options portfolio consists of 20 core stocks. The portfolio will employee mainly the credit put strategy with the primary objective of generating consistent cash flow. The portfolio focuses on 1) sufficient sector diversification 2) risk/reward ratio control 3) margin of safety by leveraging options.

    Daily portfolio performance will be updated at Seeking Alpha Instablog and Optionity.com.

    Transaction details will be updated whenever new position is opened or the existing position is closed/expired/adjusted.

    Core-20 Stocks Update

    (click to enlarge)

    Pending transaction(s) to be setup:

    For the complete list, please visist Optionity.com

    Existing Position(s):

    For the complete list, please visist Optionity.com

    *New Position Opened on March 6, 2013

    Closed Position(s):

    Core 20 Positions:

    GLW credit short put spread $11/$12 Mar. 15, 2013 ($0.23 credit, established on February 7, 2013) => Closed short put $12 at $0.07 on February 20, 2013. $0.16 profit (20.78% Return on Margin, 13 days, including non-trading days). $11 put position was sold for $0.04 on February 26, 2013, adding $0.04 to the total profit.

    Other Options Positions:

    N/A

    All rights reserved © Optionity 2013

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