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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
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Optionity - specialized in Options Trading
  • Optionity Daily Report 03/26/2013 0 comments
    Mar 26, 2013 7:11 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 26, 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 76, which had increased from the previous day closing of 72. As reported by CBOE, the total put/call ratio was 0.79 for the day. The index put/call ratio was 0.77, and the equity put/call ratio was 0.62. The CBOE volatility index (VIX) put/call ratio was 0.30. 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 10,000. Unusual option activities can be an indicator or precursor of a major movement for the underlying stock.

    (click to enlarge)Source: Schaeffer's Research

    Stocks with Unusual Volume

    Below is the top 10 list obtained from for options alert with the following screening criteria:

    1. Unusual Volume
    2. 300% spike in volume
    3. In all sectors and all industries

    (click to enlarge)

    Source: AVAFIN.COM

    Market Volatility and Analysis

    (click to enlarge)

    For Option Equity Put/Call Ratio, the MACD (12, 26, 9) continues to be slightly bullish. RSI (14) is decreasing and indicating a slightly bearish lean. RSI (14) closed at 48.58 (previous closing of 53.52). MACD Histogram is currently at 0.002. If MACD and RSI both become bullish, then market is expected to decline.(click to enlarge)


    SPY opened higher and closed higher at $156.15 (+0.70%). The volume was 23.54M. On weekly basis, the MACD (12, 2, 9) is showing a bullish trend and the MACD Histogram increased and closed at 0.669. SPY is currently trading above its 200-day MA of $119.67 and its 50-day MA of $140.81. RSI (14) increased to 74.94 from 71.75 with an increasing buying momentum. The next resistance is $161.10 (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

    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)

    Source: Seeking Alpha

    Existing Position(s):

    For the complete list, please visit

    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:


    All rights reserved © Optionity 2013

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