<![CDATA[Dynamic Trend Profile - All Forums]]> http://forums.dynamictrend.com/ Fri, 12 Mar 2010 05:46:04 -0500 MyBB <![CDATA[March 2010]]> http://forums.dynamictrend.com/showthread.php?tid=642 Mon, 01 Mar 2010 09:44:10 -0500 Marc Rinehart http://forums.dynamictrend.com/showthread.php?tid=642 1 March 2010 --

We enter a new month filled with hope of spring soon coming, better weather (hopefully) and slowly improved market conditions. The harsh winter has affected everything and everyone, including the psychology of the markets.

Based on the DT Rotational picture we suspect the market can hold up a little but for now or migrate more to the upside during this month, but we also see a reasonable odds of it oscillating some more before it drifts higher. It really is tricky to predict behavior right now as the US indices basically are stuck in the middle of a daily chart trading ranges in such as DIA, QQQQ, SPY.

We are still interested, as longer-term investors, in buying something this spring at reasonable prices-- say on any next major pullback that last 2 to 3 weeks-- if such a lower risk setup opportunity were to happen.

For now we tend to just be trading a little more aggressively buyers where we exercise more aggressive money management techniques to help us lock in any small profit either direction based on whatever the market is willing to give. We still are not picking up any hint yet of a stronger trendable market ready to return-- not in this middle range bound market-- so we are not expecting to catch bigger new moves right now.

I think it is important to point out, while we are not impressed with the markets right now, we also do Not expect the market to collapse in the near future. We think things are reasonably stable for now.

If the market does pull back in a stronger way, it will only be because of some overbought conditions that I can see setting up on some longer-term Stochastic settings as a possibility, for example. As we trade further into March we shall be able to start to predict with greater accuracy the coming bigger moves.

It looks it seems like we just need more time for the market to reveal the bigger opportunities.
Monday, 1 March 2010 40 minutes after the open UPDATE:

I posted this in our real-time class... "For today, day-traders or short-term traders can buy something or maintain previous recent buys because it appears the market has day-trade upward bias sustainability today."]]> 1 March 2010 --

We enter a new month filled with hope of spring soon coming, better weather (hopefully) and slowly improved market conditions. The harsh winter has affected everything and everyone, including the psychology of the markets.

Based on the DT Rotational picture we suspect the market can hold up a little but for now or migrate more to the upside during this month, but we also see a reasonable odds of it oscillating some more before it drifts higher. It really is tricky to predict behavior right now as the US indices basically are stuck in the middle of a daily chart trading ranges in such as DIA, QQQQ, SPY.

We are still interested, as longer-term investors, in buying something this spring at reasonable prices-- say on any next major pullback that last 2 to 3 weeks-- if such a lower risk setup opportunity were to happen.

For now we tend to just be trading a little more aggressively buyers where we exercise more aggressive money management techniques to help us lock in any small profit either direction based on whatever the market is willing to give. We still are not picking up any hint yet of a stronger trendable market ready to return-- not in this middle range bound market-- so we are not expecting to catch bigger new moves right now.

I think it is important to point out, while we are not impressed with the markets right now, we also do Not expect the market to collapse in the near future. We think things are reasonably stable for now.

If the market does pull back in a stronger way, it will only be because of some overbought conditions that I can see setting up on some longer-term Stochastic settings as a possibility, for example. As we trade further into March we shall be able to start to predict with greater accuracy the coming bigger moves.

It looks it seems like we just need more time for the market to reveal the bigger opportunities.
Monday, 1 March 2010 40 minutes after the open UPDATE:

I posted this in our real-time class... "For today, day-traders or short-term traders can buy something or maintain previous recent buys because it appears the market has day-trade upward bias sustainability today."]]> <![CDATA[February 2010]]> http://forums.dynamictrend.com/showthread.php?tid=641 Mon, 01 Feb 2010 11:43:55 -0500 Marc Rinehart http://forums.dynamictrend.com/showthread.php?tid=641 Monday, 1 February 2010 --

As it did the first day of trading last month the stock market opened higher and shows good strength this morning. However, that being said, this is one time I will pass on buying something new other than if I am looking for a day-trade. As a longer-term 'Bull' waiting to put money back to work, there just are two many fundamental and technical contradictions now that did not exist early January.

Consequently, the risk of trading and losing money still seems very high... so, in my humble opinion, it just is not worth taking the risk. I would much rather miss out on a little profit now than potentially get trapped in what might very well still be a complex aggregate continuation pullback.

I still want to wait patiently to try and buy my favored stocks at a cheaper price later this month or next.

Only more market data will reveal what is a better way to try and catch a bigger move. I don't believe things have change since last Friday except institutional money traditionally has to start putting some new money back to work at the beginning of a new month or quarter or new year. Once that buying dries up what pushes things higher again? I am not encouraged it is time to step to the plate with conviction this early in February.

For now I think I will just day-trade these daily short-term fluctuations and get out again before the close because I still do see how the US stock market is fully ready yet to return the previous longer-term Bull run.]]> Monday, 1 February 2010 --

As it did the first day of trading last month the stock market opened higher and shows good strength this morning. However, that being said, this is one time I will pass on buying something new other than if I am looking for a day-trade. As a longer-term 'Bull' waiting to put money back to work, there just are two many fundamental and technical contradictions now that did not exist early January.

Consequently, the risk of trading and losing money still seems very high... so, in my humble opinion, it just is not worth taking the risk. I would much rather miss out on a little profit now than potentially get trapped in what might very well still be a complex aggregate continuation pullback.

I still want to wait patiently to try and buy my favored stocks at a cheaper price later this month or next.

Only more market data will reveal what is a better way to try and catch a bigger move. I don't believe things have change since last Friday except institutional money traditionally has to start putting some new money back to work at the beginning of a new month or quarter or new year. Once that buying dries up what pushes things higher again? I am not encouraged it is time to step to the plate with conviction this early in February.

For now I think I will just day-trade these daily short-term fluctuations and get out again before the close because I still do see how the US stock market is fully ready yet to return the previous longer-term Bull run.]]> <![CDATA[JANUARY 2010 ! ! !]]> http://forums.dynamictrend.com/showthread.php?tid=640 Wed, 06 Jan 2010 11:09:49 -0500 Marc Rinehart http://forums.dynamictrend.com/showthread.php?tid=640
We are currently on our third trading day for 2010 and so far the Bulls seem to be maintaining control over things. After the initial strong first day the market has returned to its very quiet with occasional slow spurts of energy creeping in behavior.

Below is a list of some of the stocks identified Monday that I want to continue to focus on now...

These are the best setups where many of these stocks have retraced the past couple months very close to their 200 period moving averages supportsand were being bought on the first day of the new year... odds favor they will be bought more on pullbacks this month and next: GS, MS, JPM, WFC, MET, CMG, BEN, GT, BBT, RGLD, GFI, GG, ABX, NEM, BVN, AU, AUY, BRK.A &.B, JCRR, MRO, DO, PTR, XLF

Other misc ideas I was attracted to their patterns and bullish tendencies Monday: F, FDX, TSL, CSIQ, AGU, VLO, HOC, TSO, WYNN, LVS, FCX, ETQ...

Checking out this week more in detail RETAIL (for 4th QTR momentum Jan seasonality plays), TECHNOLOGY, NAT GAS, HEATING OIL, METALS, STEEL, BRAZIL and CHINA ideas...

Last check in our Group Rotation DT/OD feature, we have no groups rotating down and 8 groups rotating from negative towards positive since the new year (Apparel, Banks, Clothing, Consumer Electronics, Gambling, Life Insurance, Security Brokers, Specialty Chemicals)... pretty much all the groups are holding steady with strength up... with the exception of three groups currently still holding negative: Food Retailers, Gold & Precious Metals (although they have acted very well since Monday and look like the rotation is now slowly up again after a hard Dec correction), and Integrated Oil & Gas (slowly getting better too)

I WILL UPDATE THIS LIST in later posts as I get more time to review all the markets in greater detail this week and next. This is just a 'quick look' observation so far this new year.

GENERAL OBSERVATION So Far for 2010: I am still fully invested going into the new year and if I had more cash would still be willing to put money to work into this year year.]]>
We are currently on our third trading day for 2010 and so far the Bulls seem to be maintaining control over things. After the initial strong first day the market has returned to its very quiet with occasional slow spurts of energy creeping in behavior.

Below is a list of some of the stocks identified Monday that I want to continue to focus on now...

These are the best setups where many of these stocks have retraced the past couple months very close to their 200 period moving averages supportsand were being bought on the first day of the new year... odds favor they will be bought more on pullbacks this month and next: GS, MS, JPM, WFC, MET, CMG, BEN, GT, BBT, RGLD, GFI, GG, ABX, NEM, BVN, AU, AUY, BRK.A &.B, JCRR, MRO, DO, PTR, XLF

Other misc ideas I was attracted to their patterns and bullish tendencies Monday: F, FDX, TSL, CSIQ, AGU, VLO, HOC, TSO, WYNN, LVS, FCX, ETQ...

Checking out this week more in detail RETAIL (for 4th QTR momentum Jan seasonality plays), TECHNOLOGY, NAT GAS, HEATING OIL, METALS, STEEL, BRAZIL and CHINA ideas...

Last check in our Group Rotation DT/OD feature, we have no groups rotating down and 8 groups rotating from negative towards positive since the new year (Apparel, Banks, Clothing, Consumer Electronics, Gambling, Life Insurance, Security Brokers, Specialty Chemicals)... pretty much all the groups are holding steady with strength up... with the exception of three groups currently still holding negative: Food Retailers, Gold & Precious Metals (although they have acted very well since Monday and look like the rotation is now slowly up again after a hard Dec correction), and Integrated Oil & Gas (slowly getting better too)

I WILL UPDATE THIS LIST in later posts as I get more time to review all the markets in greater detail this week and next. This is just a 'quick look' observation so far this new year.

GENERAL OBSERVATION So Far for 2010: I am still fully invested going into the new year and if I had more cash would still be willing to put money to work into this year year.]]> <![CDATA[November 2009]]> http://forums.dynamictrend.com/showthread.php?tid=639 Wed, 04 Nov 2009 11:00:05 -0500 Marc Rinehart http://forums.dynamictrend.com/showthread.php?tid=639 Wednesday 3 NOV Update-- Looks like our recent pullback may be over and the bulls are stepping to the plate to try and re-establish a base to push back the previous uptrends.

Symbols to check out if an aggressive trader interested in something to consider trading.... AMZN, NFLX, CMG, EBAY, JOYG, AIG, ATW, RIG, JPM, BBT, GS, BEN, TGT, WYNN, V, WLT... a little more risks but ok in general: AAPL, ACI, GS, FDX, IBM, OIH, PCLN, CAT... (also like aggressive buy setup now in AIG with very tight trailing stop.)

Caveat: Am just trying to be a little more conservative with ideas right now... your other regular high-fliers could also be worth a look over the next few days if you can deal with a little bit higher risk now on new entries... would use tight trailing stops with new ideas to be safe at this stage.

Last General Comment: Deep down inside I still don't think the market wants to top out just yet... deep down inside I still think believe in SANTA... deep down inside still thinking odds favorable Santa (rally) might still show up early this year.... just not ready to give up on the recent bull despite a complex or deeper pullback the past two weeks.]]> Wednesday 3 NOV Update-- Looks like our recent pullback may be over and the bulls are stepping to the plate to try and re-establish a base to push back the previous uptrends.

Symbols to check out if an aggressive trader interested in something to consider trading.... AMZN, NFLX, CMG, EBAY, JOYG, AIG, ATW, RIG, JPM, BBT, GS, BEN, TGT, WYNN, V, WLT... a little more risks but ok in general: AAPL, ACI, GS, FDX, IBM, OIH, PCLN, CAT... (also like aggressive buy setup now in AIG with very tight trailing stop.)

Caveat: Am just trying to be a little more conservative with ideas right now... your other regular high-fliers could also be worth a look over the next few days if you can deal with a little bit higher risk now on new entries... would use tight trailing stops with new ideas to be safe at this stage.

Last General Comment: Deep down inside I still don't think the market wants to top out just yet... deep down inside I still think believe in SANTA... deep down inside still thinking odds favorable Santa (rally) might still show up early this year.... just not ready to give up on the recent bull despite a complex or deeper pullback the past two weeks.]]> <![CDATA[Oct 09]]> http://forums.dynamictrend.com/showthread.php?tid=638 Mon, 19 Oct 2009 11:58:16 -0400 Marc Rinehart http://forums.dynamictrend.com/showthread.php?tid=638
I still think the market has more of a bullish tint to it and have not covered or reduced my exposure to the upside. I actually became fully invested again early last week to take advantage of what I think is more short-term bullishness in my selective stock positions.

I honestly cannot explain everything going on but for now I am content holding Longs with trailing stops to protect those positions. Below are some little recent ideas tracking with updated comments....

Energy and metals continue to hold well today. Last week refinery (SUN, MRO) and some of the fertilizer (POT, CF, AGU) groups started to perform a little better. Also noticed that some of the select shipping (FRO) stocks acting like they want to start inching up a little but.... Holding steady on metals (BVN, etc), energy, some financials, some techs, some Chinese and Brazilian ADR's, to name a few areas still interesting. (GMCR)...

Interested action in LMT and COST this morning....

Overall, am content with my bullish positions.

(09-29-2009 09:55 AM)Marc Rinehart Wrote:  Tuesday, Sept 29 Update- We continue to remain optimist the market has not run out of steam and will not quit inching higher over time until, for example, the DJ Industrial can officially once again test 10,000... or even move up to my 10,400/10,500 next real target areas.
]]>
I still think the market has more of a bullish tint to it and have not covered or reduced my exposure to the upside. I actually became fully invested again early last week to take advantage of what I think is more short-term bullishness in my selective stock positions.

I honestly cannot explain everything going on but for now I am content holding Longs with trailing stops to protect those positions. Below are some little recent ideas tracking with updated comments....

Energy and metals continue to hold well today. Last week refinery (SUN, MRO) and some of the fertilizer (POT, CF, AGU) groups started to perform a little better. Also noticed that some of the select shipping (FRO) stocks acting like they want to start inching up a little but.... Holding steady on metals (BVN, etc), energy, some financials, some techs, some Chinese and Brazilian ADR's, to name a few areas still interesting. (GMCR)...

Interested action in LMT and COST this morning....

Overall, am content with my bullish positions.

(09-29-2009 09:55 AM)Marc Rinehart Wrote:  Tuesday, Sept 29 Update- We continue to remain optimist the market has not run out of steam and will not quit inching higher over time until, for example, the DJ Industrial can officially once again test 10,000... or even move up to my 10,400/10,500 next real target areas.
]]> <![CDATA[September 09]]> http://forums.dynamictrend.com/showthread.php?tid=637 Tue, 01 Sep 2009 15:55:17 -0400 Marc Rinehart http://forums.dynamictrend.com/showthread.php?tid=637 Tuesday, Sept 1, 2009- The US stock market has been floundering for about a week or so. Today is the beginning of a new trading month and the bias remains clearly down all day. If we continue this way the next couple days we might finally have our correction we have been waiting a couple months for?]]> Tuesday, Sept 1, 2009- The US stock market has been floundering for about a week or so. Today is the beginning of a new trading month and the bias remains clearly down all day. If we continue this way the next couple days we might finally have our correction we have been waiting a couple months for?]]> <![CDATA[August 2009]]> http://forums.dynamictrend.com/showthread.php?tid=636 Mon, 03 Aug 2009 12:27:02 -0400 Marc Rinehart http://forums.dynamictrend.com/showthread.php?tid=636
Noticed for first time in a while US Dollar breaking down. Is it accelerating to the downside now? Will that be the explanation why NY Crude Oil prices is working higher when we seem to have adequate inventories?

Also, NY High Grade Copper continues to trend higher... Is silver and gold going to inch back up this next quarter?

Just questions I am now thinking about that I have not really noticed until today....]]>
Noticed for first time in a while US Dollar breaking down. Is it accelerating to the downside now? Will that be the explanation why NY Crude Oil prices is working higher when we seem to have adequate inventories?

Also, NY High Grade Copper continues to trend higher... Is silver and gold going to inch back up this next quarter?

Just questions I am now thinking about that I have not really noticed until today....]]> <![CDATA[July 2009]]> http://forums.dynamictrend.com/showthread.php?tid=635 Tue, 07 Jul 2009 11:11:22 -0400 Marc Rinehart http://forums.dynamictrend.com/showthread.php?tid=635
As I said yesterday, day-traders and short-term traders have to be careful buying too much because it appears the bears may have the upper hand in controlling things. As a longer term investor I have a ton of cash waiting to buy things cheaper but I just don't see any bargains for several weeks now until we get more of a correction.

I am starting to see more evidence that the bargains may be coming. For example, I like CME and ICE. Today they are breaking down again. CME just took out its last June daily chart low. ICE looks like it is inclined to do the same.

I also like RIMM, AAPL, BIDU, GOOG but am not willing to buy at their current highs... but they are slowly getting cheaper. But, if I want them really cheap I am going to have to be very patient and wait.

If I were a short-term or day-trader, I think trying to find shorts to trade-- using appropriate money management on those trades to protect them-- seems to be the best plan for now that seems to be working.... selling into minor rally resistance areas, for example.

Energy stocks and futures contracts continue to be in corrective, pullback modes still.]]>
As I said yesterday, day-traders and short-term traders have to be careful buying too much because it appears the bears may have the upper hand in controlling things. As a longer term investor I have a ton of cash waiting to buy things cheaper but I just don't see any bargains for several weeks now until we get more of a correction.

I am starting to see more evidence that the bargains may be coming. For example, I like CME and ICE. Today they are breaking down again. CME just took out its last June daily chart low. ICE looks like it is inclined to do the same.

I also like RIMM, AAPL, BIDU, GOOG but am not willing to buy at their current highs... but they are slowly getting cheaper. But, if I want them really cheap I am going to have to be very patient and wait.

If I were a short-term or day-trader, I think trying to find shorts to trade-- using appropriate money management on those trades to protect them-- seems to be the best plan for now that seems to be working.... selling into minor rally resistance areas, for example.

Energy stocks and futures contracts continue to be in corrective, pullback modes still.]]> <![CDATA[Buying Puts...]]> http://forums.dynamictrend.com/showthread.php?tid=634 Mon, 29 Jun 2009 13:16:45 -0400 Matt http://forums.dynamictrend.com/showthread.php?tid=634

What do I look for if I think the market is going down and I want to buy cheap puts using DT volatility comparison and range?

If you think the market is going down and you want to buy cheap puts using the DT Volatility Comparison and Range use scanning routines that help you identify those stocks still not correcting during an overall, sector or group pullback. and check out those stock symbols by linking the charts as a daily with the Matrix. Double click on the stock symbol generated by a Matrix result and it will change a linked daily chart you have set up for a quick review. Try using something like and Advanced Options Scan: CIV Put Range <20 , Bollinger BreakUp, Broke Below 50 MA, Large Volume Stocks (if topping high volume can often show up), try bearish candlestick scans, Three Bars Down, Gappers Down, Largest Range could be suggesting topping if looking for tops, etc.

.... maybe set your Sector/Group to a specific area that is vastly overbought or where you think the topping acting is the greatest and the scanner will only show those results.
... if you want to buy a put or call you would be best advised to look for a stock that is at its 80 to 90% LOW range using DT Volatility Range.

Another technique you can do is, whenever you find a scanner result you are interested in, compare it with the Group Rotation feature to see if the stocks Group is showing any kind of rotation down and changing from Blue to Neutral or even to Red. that basically confirms institutional money is rotating out of the overall group which improves your odds if trying to buy Puts when picking the tops.]]>

What do I look for if I think the market is going down and I want to buy cheap puts using DT volatility comparison and range?

If you think the market is going down and you want to buy cheap puts using the DT Volatility Comparison and Range use scanning routines that help you identify those stocks still not correcting during an overall, sector or group pullback. and check out those stock symbols by linking the charts as a daily with the Matrix. Double click on the stock symbol generated by a Matrix result and it will change a linked daily chart you have set up for a quick review. Try using something like and Advanced Options Scan: CIV Put Range <20 , Bollinger BreakUp, Broke Below 50 MA, Large Volume Stocks (if topping high volume can often show up), try bearish candlestick scans, Three Bars Down, Gappers Down, Largest Range could be suggesting topping if looking for tops, etc.

.... maybe set your Sector/Group to a specific area that is vastly overbought or where you think the topping acting is the greatest and the scanner will only show those results.
... if you want to buy a put or call you would be best advised to look for a stock that is at its 80 to 90% LOW range using DT Volatility Range.

Another technique you can do is, whenever you find a scanner result you are interested in, compare it with the Group Rotation feature to see if the stocks Group is showing any kind of rotation down and changing from Blue to Neutral or even to Red. that basically confirms institutional money is rotating out of the overall group which improves your odds if trying to buy Puts when picking the tops.]]> <![CDATA[A REAL TRADE FROM ZERO TO PROFIT.]]> http://forums.dynamictrend.com/showthread.php?tid=633 Tue, 23 Jun 2009 07:52:06 -0400 fabrizio http://forums.dynamictrend.com/showthread.php?tid=633
I just want to show a yesterday's trade, done 100 % with OPTION DYNAMICS .
It is an incredible soft. All is there , handy ,ready to use. Even the most sophisticated tools like the CIV ( among the others)

I apologize in advance: here some sequences are probably not completely in order or clear, nor properly and thoroughfully explained ; but was not my main intention ; rather to show the empirical way .

The trade? has and is working very well, let see.

Thank you TJ. and thanks to all of you people, from DT.

Cordially
F.
PS: Indeed if someone has questions on something not clear , please feel 100% free to contact me . Should you need my Skype ID please let me know via private message.



[attachment=3505]
[attachment=3506]
[attachment=3507][attachment=3508][attachment=3509][attachment=3510][attachment=3511][attachment=3512][attachment=3513][attachment=3514]
here the last one...[attachment=3515]]]>
I just want to show a yesterday's trade, done 100 % with OPTION DYNAMICS .
It is an incredible soft. All is there , handy ,ready to use. Even the most sophisticated tools like the CIV ( among the others)

I apologize in advance: here some sequences are probably not completely in order or clear, nor properly and thoroughfully explained ; but was not my main intention ; rather to show the empirical way .

The trade? has and is working very well, let see.

Thank you TJ. and thanks to all of you people, from DT.

Cordially
F.
PS: Indeed if someone has questions on something not clear , please feel 100% free to contact me . Should you need my Skype ID please let me know via private message.



[attachment=3505]
[attachment=3506]
[attachment=3507][attachment=3508][attachment=3509][attachment=3510][attachment=3511][attachment=3512][attachment=3513][attachment=3514]
here the last one...[attachment=3515]]]> <![CDATA[Option Matrix Filters Explanations]]> http://forums.dynamictrend.com/showthread.php?tid=632 Fri, 05 Jun 2009 11:13:29 -0400 Marc Rinehart http://forums.dynamictrend.com/showthread.php?tid=632 1. Low CIV Calls over 90 Day Range- This scan filter uses a Continuous Implied Volatility (CIV) data to identify a high/low range of the implied volatility over the last 90 days. Once the range is calculated, the scan identifies stocks that are currently trading below 20% of its CIV range, indicating longer options premiums compared to the last 90 days. User can also select lower lookback periods or short periods such as a 20 day to calculate the CIV high/low range. If interested in buying a Call, a stock identified using this filter is said to be in a more reasonably priced option value.

[attachment=3494]
2. Low CIV Puts over 90 Day Range- This scan filter uses a Continuous Implied Volatility (CIV) data to identify a high/low range of the implied volatility over the last 90 days. Once the range is calculated, the scan identifies stocks that are currently trading below 20% of its CIV range, indicating lower options premiums compared to the last 90 days. User can also select longer lookback periods or short periods such as a 20 day to calculate the CIV high/low range. If interested in buying a Put, a stock identified using this filter is said to be in a more reasonably priced option value.

[attachment=3495]]]> 1. Low CIV Calls over 90 Day Range- This scan filter uses a Continuous Implied Volatility (CIV) data to identify a high/low range of the implied volatility over the last 90 days. Once the range is calculated, the scan identifies stocks that are currently trading below 20% of its CIV range, indicating longer options premiums compared to the last 90 days. User can also select lower lookback periods or short periods such as a 20 day to calculate the CIV high/low range. If interested in buying a Call, a stock identified using this filter is said to be in a more reasonably priced option value.

[attachment=3494]
2. Low CIV Puts over 90 Day Range- This scan filter uses a Continuous Implied Volatility (CIV) data to identify a high/low range of the implied volatility over the last 90 days. Once the range is calculated, the scan identifies stocks that are currently trading below 20% of its CIV range, indicating lower options premiums compared to the last 90 days. User can also select longer lookback periods or short periods such as a 20 day to calculate the CIV high/low range. If interested in buying a Put, a stock identified using this filter is said to be in a more reasonably priced option value.

[attachment=3495]]]> <![CDATA[New Program Update]]> http://forums.dynamictrend.com/showthread.php?tid=631 Fri, 05 Jun 2009 10:24:12 -0400 jasjas http://forums.dynamictrend.com/showthread.php?tid=631 I would really like to see a new Version since the last update must at least be a few years ago. Sad

Here are so many requests that have been put in !!!!

Maybe soon !!!! Rolleyes

Thanks

John

Smile]]> I would really like to see a new Version since the last update must at least be a few years ago. Sad

Here are so many requests that have been put in !!!!

Maybe soon !!!! Rolleyes

Thanks

John

Smile]]> <![CDATA[DT Volatility Range (CIV Mean, 90)]]> http://forums.dynamictrend.com/showthread.php?tid=629 Wed, 03 Jun 2009 17:15:03 -0400 Marc Rinehart http://forums.dynamictrend.com/showthread.php?tid=629
Implied volatility is a measure of what investors think about the future, or a representation of the market's best estimate of future volatility. While volatility is said to reflect traders perceptions for the future potential of a stock or index, it is relatively difficult to predict.

Implied volatility rises when concern about risk or fear increase, or the general market perception remains bearish. It falls when confidence increases or as long as a bullish perception remains strong.

The DT Volatility Range (CIV Mean, 90) is a very unique, proprietary technical analysis indicator designed to help the trader more quickly identify if an option is at fair value or not.

Implied volatility is that level of volatility that will calculate a fair value equal to the existing option price. Implied volatility can be considered a "consensus" type of information as it measures how expensive an option is considered in the marketplace prior to expiration. If a market becomes more volatile, implied volatility is expected to rise. As the market becomes less volatile, its implied volatility is expected to drop.
This matters to option traders because an increase in implied volatility causes a rise in option premiums. That is bad for option buyers but can be good for sellers. When implied volatility is falling, that is good for option buyers but can be bad for sellers.
When volatility is low and begins to move to the lower 20% range, it is time to seek out and evaluate opportunities to buy options or consider something like a straddle spread strategy. (See #1) When volatility is high and begins to move to the upper 80% range, it makes sense to seek out opportunities to sell option premiums because they are now becoming very expensive. (See #2)
One example of how to use the DT Volatility Range indicator is the following Research In Motion (RIMM) setup. RIMM has sold off from $130 to $35 in approximately a four month period. For the next two months it begins a slow and steady incline to reach the $60 resistance area. At this point we are interested in placing a PUT strategy but we first need to find out if Put options are overvalued or reasonable. We also know that RIMM comes out with earnings in a couple days and we believe the results should not be favorable.

We look at the DT Volatility Range indicator and it identifies RIMM as being in the lower 20% range. We, therefore, are more interested in either buying Puts or attempting a net down biased spread strategy because the DT Volatility Range would suggest these options are current priced at reasonable rates.

RIMM comes out with weaker than expected earnings and its stock immediately trades down over $9 the next day. We benefit with a very nice quick profit.
As we follow-up later on this trade we see our inexpensive Put option continued to grow, in this instance, very quickly in value.

Six days after the initial breakdown our March 09 50 Put is now trading for some where near the $11.30 area. The DT Volatility Range indicator show the implied volatility is now starting to off the extreme lows yet still remains reasonably priced in general.
The DT Volatility Range (CIV Mean, 90) Indicator default setting uses Continuous Implied Volatility (CIV) data set to Continuous Implied Mean and uses a high/low range of the implied volatility over the last 90 days. The user can also select longer lookback periods or short periods such as a 20 day to calculate the CIV high/low range.

If the user wishes to change the DT Volatility Range (CIV Mean, 90) calculation, there are four selections to choice from: Continuous Implied Mean, Continuous Implied Calls, Continuous Implied Puts, and Historical Volatility.
The Continuous Implied Mean setting uses Continuous Implied Volatility (CIV) data set to Continuous Implied Mean and uses a high/low range of the implied volatility. The lookback period uses 90 to 120 days to calculate the CIV high/low range. Continuous Implied Mean calculates two strikes above and below the current AEM strike. It is weighted based on the distance to AEM strike.
The calculation for all four volatility types includes four expiration months including front month, weighted based on days to expiry.

Continuous Implied Mean Volatility is determined separately for Calls and Puts. The mean is CIV Calls + CIV Puts divided by 2. This gives a continuous outlook to the implied volatility of a stock, taking into consideration of both price changes and options expiring.

If one favors attempting to identify a Calls option opportunity, the Continuous Implied Calls selection adjusts the calculation for Calls.

If one favors attempting to identify a Puts option opportunity, the Continuous Implied Puts selection adjusts the calculation for Puts.

Historical Volatility most frequently refers to standard deviation of the change in the value of a market over a particular period of time. It can be expressed as an annual percentage. In the Historical Volatility selection the calculation uses a high/low range of the implied volatility. The lookback period uses 90 to 120 days to calculate the CIV high/low range. Historical Volatility calculates two strikes above and below the current AEM strike. It is weighted based on the distance to AEM strike. The calculation includes four expiration months including front month, weighted based on days to expiry.

Once the range is calculated, the scan identifies stocks that are currently trading above 80% of its CIV range, indicating higher options premiums compared to the last 90 days.

If interested in Selling a Call to collect the premium, a stock identified using this filter will have a higher, more expensive Call value so would qualify as a good candidate for this type of option strategy.

If interested in Selling a Put to collect the premium, a stock identified using this filter will have a higher, more expensive Put value so would qualify as a good candidate for this type of option strategy.

The DT Volatility Range (CIV Mean, 90) Indicator allows for three different levels in its calculation: the individual stock (1) Symbol, or the (2) Group or (3) Sector that this stock is located.
Most symbols represent one company, such as MSFT = Microsoft, or HD = Home Depot. However, Dynamic Trend has some proprietary symbols, each of which represents potentially many stocks. Those symbols are called group and sector symbols.

A sector is a set of companies (usually a very large set, as in hundreds of them), all of whose businesses are categorized into one short and very generic description. Examples of sectors include Consumer Goods, Financials, Health Care, and Technology.

Each sector is represented by a symbol. For example, the symbol for the Financials sector is $DJUSFN, and for Technology it is $DJUSTC. Just as you can chart the price performance of one stock by entering its symbol, you can chart the combined price performance of an entire sector by charting the symbol of that sector.

Within each sector, are smaller sets of companies; those sets are called groups. Each group has a symbol, and has a name that is more specific than the sector name, about the nature of its companies' business. For example, the Financials sector has groups titled Banks ($DJUSBK), and Property and Casualty Insurance ($DJUSIP), etc. Like the symbols for sectors and companies, group symbols are also chartable.

The Level field allows you to display the Volatility Range for a whole group or sector, without you having to type in, or know, the symbol of that group or sector. For example, if you are currently displaying a chart of Microsoft (MSFT), and you want to display the Volatility Range for the sector that contains Microsoft (i.e. Technology), just enter "Sector" in the Level field.

If you enter "Symbol" in the level field, then you will get the Volatility Range of exactly the symbol that you entered.

The Level field applies, even if the symbol that you entered is a group symbol. For example, if you typed in $DJUSBK (i.e. Banks), and you selected "Sector" in the Level field, Option Dynamics displays a graph not for Banks, but for the sector that contains Banks, i.e. Financials.
In the Volatility Range study the shaded area of the Volatility Range display, represents the highest and the lowest values that the Volatility Range has been, in a most-recent specified number of bars. That number is called the Look Back period.

So, for example, if you want the shaded area to represent how high and how low that the study has been in the last 80 bars, enter 80 as the Look back period. If you want the shaded area to represent how high and how low that the study has been in the last 120 bars, enter 120 as the Look back period. The 90 day default is what typically an options trader will look back. Some will want to look back 120 days.

Below is an example which shows the difference in yellow shading when using the 90 period setting and then applying a new 50 period selection.
The Smoothing selection gives you the choice of plotting either (1) an exact volatility study, or (2) a moving average of a volatility study.

To plot the study exactly, make sure that the Smoothing checkbox is not checked. In this case, Option Dynamics will ignore the number in the field to the right of the checkbox.

To plot a moving average, check the Smoothing checkbox and, in the field to its right, enter the number of bars for which you want the moving average to be calculated. Usually, the higher the number you enter, the smoother the curve will look.
The "Historical length" field in the Volatility Range is the same as the Length field in the Historic Volatility study. The Historical length field is enabled only if the user selects "Historic" as the volatility type.]]>
Implied volatility is a measure of what investors think about the future, or a representation of the market's best estimate of future volatility. While volatility is said to reflect traders perceptions for the future potential of a stock or index, it is relatively difficult to predict.

Implied volatility rises when concern about risk or fear increase, or the general market perception remains bearish. It falls when confidence increases or as long as a bullish perception remains strong.

The DT Volatility Range (CIV Mean, 90) is a very unique, proprietary technical analysis indicator designed to help the trader more quickly identify if an option is at fair value or not.

Implied volatility is that level of volatility that will calculate a fair value equal to the existing option price. Implied volatility can be considered a "consensus" type of information as it measures how expensive an option is considered in the marketplace prior to expiration. If a market becomes more volatile, implied volatility is expected to rise. As the market becomes less volatile, its implied volatility is expected to drop.
This matters to option traders because an increase in implied volatility causes a rise in option premiums. That is bad for option buyers but can be good for sellers. When implied volatility is falling, that is good for option buyers but can be bad for sellers.
When volatility is low and begins to move to the lower 20% range, it is time to seek out and evaluate opportunities to buy options or consider something like a straddle spread strategy. (See #1) When volatility is high and begins to move to the upper 80% range, it makes sense to seek out opportunities to sell option premiums because they are now becoming very expensive. (See #2)
One example of how to use the DT Volatility Range indicator is the following Research In Motion (RIMM) setup. RIMM has sold off from $130 to $35 in approximately a four month period. For the next two months it begins a slow and steady incline to reach the $60 resistance area. At this point we are interested in placing a PUT strategy but we first need to find out if Put options are overvalued or reasonable. We also know that RIMM comes out with earnings in a couple days and we believe the results should not be favorable.

We look at the DT Volatility Range indicator and it identifies RIMM as being in the lower 20% range. We, therefore, are more interested in either buying Puts or attempting a net down biased spread strategy because the DT Volatility Range would suggest these options are current priced at reasonable rates.

RIMM comes out with weaker than expected earnings and its stock immediately trades down over $9 the next day. We benefit with a very nice quick profit.
As we follow-up later on this trade we see our inexpensive Put option continued to grow, in this instance, very quickly in value.

Six days after the initial breakdown our March 09 50 Put is now trading for some where near the $11.30 area. The DT Volatility Range indicator show the implied volatility is now starting to off the extreme lows yet still remains reasonably priced in general.
The DT Volatility Range (CIV Mean, 90) Indicator default setting uses Continuous Implied Volatility (CIV) data set to Continuous Implied Mean and uses a high/low range of the implied volatility over the last 90 days. The user can also select longer lookback periods or short periods such as a 20 day to calculate the CIV high/low range.

If the user wishes to change the DT Volatility Range (CIV Mean, 90) calculation, there are four selections to choice from: Continuous Implied Mean, Continuous Implied Calls, Continuous Implied Puts, and Historical Volatility.
The Continuous Implied Mean setting uses Continuous Implied Volatility (CIV) data set to Continuous Implied Mean and uses a high/low range of the implied volatility. The lookback period uses 90 to 120 days to calculate the CIV high/low range. Continuous Implied Mean calculates two strikes above and below the current AEM strike. It is weighted based on the distance to AEM strike.
The calculation for all four volatility types includes four expiration months including front month, weighted based on days to expiry.

Continuous Implied Mean Volatility is determined separately for Calls and Puts. The mean is CIV Calls + CIV Puts divided by 2. This gives a continuous outlook to the implied volatility of a stock, taking into consideration of both price changes and options expiring.

If one favors attempting to identify a Calls option opportunity, the Continuous Implied Calls selection adjusts the calculation for Calls.

If one favors attempting to identify a Puts option opportunity, the Continuous Implied Puts selection adjusts the calculation for Puts.

Historical Volatility most frequently refers to standard deviation of the change in the value of a market over a particular period of time. It can be expressed as an annual percentage. In the Historical Volatility selection the calculation uses a high/low range of the implied volatility. The lookback period uses 90 to 120 days to calculate the CIV high/low range. Historical Volatility calculates two strikes above and below the current AEM strike. It is weighted based on the distance to AEM strike. The calculation includes four expiration months including front month, weighted based on days to expiry.

Once the range is calculated, the scan identifies stocks that are currently trading above 80% of its CIV range, indicating higher options premiums compared to the last 90 days.

If interested in Selling a Call to collect the premium, a stock identified using this filter will have a higher, more expensive Call value so would qualify as a good candidate for this type of option strategy.

If interested in Selling a Put to collect the premium, a stock identified using this filter will have a higher, more expensive Put value so would qualify as a good candidate for this type of option strategy.

The DT Volatility Range (CIV Mean, 90) Indicator allows for three different levels in its calculation: the individual stock (1) Symbol, or the (2) Group or (3) Sector that this stock is located.
Most symbols represent one company, such as MSFT = Microsoft, or HD = Home Depot. However, Dynamic Trend has some proprietary symbols, each of which represents potentially many stocks. Those symbols are called group and sector symbols.

A sector is a set of companies (usually a very large set, as in hundreds of them), all of whose businesses are categorized into one short and very generic description. Examples of sectors include Consumer Goods, Financials, Health Care, and Technology.

Each sector is represented by a symbol. For example, the symbol for the Financials sector is $DJUSFN, and for Technology it is $DJUSTC. Just as you can chart the price performance of one stock by entering its symbol, you can chart the combined price performance of an entire sector by charting the symbol of that sector.

Within each sector, are smaller sets of companies; those sets are called groups. Each group has a symbol, and has a name that is more specific than the sector name, about the nature of its companies' business. For example, the Financials sector has groups titled Banks ($DJUSBK), and Property and Casualty Insurance ($DJUSIP), etc. Like the symbols for sectors and companies, group symbols are also chartable.

The Level field allows you to display the Volatility Range for a whole group or sector, without you having to type in, or know, the symbol of that group or sector. For example, if you are currently displaying a chart of Microsoft (MSFT), and you want to display the Volatility Range for the sector that contains Microsoft (i.e. Technology), just enter "Sector" in the Level field.

If you enter "Symbol" in the level field, then you will get the Volatility Range of exactly the symbol that you entered.

The Level field applies, even if the symbol that you entered is a group symbol. For example, if you typed in $DJUSBK (i.e. Banks), and you selected "Sector" in the Level field, Option Dynamics displays a graph not for Banks, but for the sector that contains Banks, i.e. Financials.
In the Volatility Range study the shaded area of the Volatility Range display, represents the highest and the lowest values that the Volatility Range has been, in a most-recent specified number of bars. That number is called the Look Back period.

So, for example, if you want the shaded area to represent how high and how low that the study has been in the last 80 bars, enter 80 as the Look back period. If you want the shaded area to represent how high and how low that the study has been in the last 120 bars, enter 120 as the Look back period. The 90 day default is what typically an options trader will look back. Some will want to look back 120 days.

Below is an example which shows the difference in yellow shading when using the 90 period setting and then applying a new 50 period selection.
The Smoothing selection gives you the choice of plotting either (1) an exact volatility study, or (2) a moving average of a volatility study.

To plot the study exactly, make sure that the Smoothing checkbox is not checked. In this case, Option Dynamics will ignore the number in the field to the right of the checkbox.

To plot a moving average, check the Smoothing checkbox and, in the field to its right, enter the number of bars for which you want the moving average to be calculated. Usually, the higher the number you enter, the smoother the curve will look.
The "Historical length" field in the Volatility Range is the same as the Length field in the Historic Volatility study. The Historical length field is enabled only if the user selects "Historic" as the volatility type.]]> <![CDATA[Option 'Greeks' Basic General Explanation]]> http://forums.dynamictrend.com/showthread.php?tid=628 Wed, 03 Jun 2009 17:04:13 -0400 Marc Rinehart http://forums.dynamictrend.com/showthread.php?tid=628
DELTA- Delta measures how much an option price will move relative to the underlying asset. It is the percentage change in the option premium for each dollar change in the underlying option.
Some call it the 'hedge ratio.' For example, say you have a call option with a delta of 0.8, it means for every $1 the stock increases the call option will increase by 80 cents.

Call options said to be 'in the money' as it nears expiration, it will approach a delta of 1.00. When a Call option that is in-the-money put option nears expiration, it will approach a delta of -1.00.
Say a stock has a strike price of $20 and its price goes up $2. This will cause the Call option premium to rise by a certain percentage. Say the price rises $1. The Call option is said to have a positive delta of 50% because the premium increased $1 for a $2 stock price increase. The Put option on the other hand is said to have a negative delta because the Put option should decrease the same amount.
Options are many times used to hedge a position or risk. This is known as hedging risk. If, for instance, you own a 100 shares of a stock priced at $50 and you expect the price to go up after earnings. Once it goes up you may want to lock in your profits. What happens if your stock comes in under estimates? To protect your position how many Puts should you buy to hedge your position? If the delta of the put is -$.50, then the put will increase in value by 50¢ for each $1 drop in the price of the stock, at least while it hovers around the strike price. Therefore, you would want to buy 2 put contracts to cover or hedge your position. If the value of the portfolio doesn’t change within a narrow range, it is said to be delta neutral. The delta of a portfolio is sometimes called its position delta.

GAMMA- Basically the Gamma is the rate of change for delta as it relates to the stock price. Gamma is used to gauge how far an option price is compared to the degree it is in or out of the money.
If the option is deep in or out of the money it typically has a small Gamma. When the option is near or at the money the Gamma is at its largest value. As an option goes more into the money, delta will increase until it tracks the underlying dollar for dollar; however, delta can never be greater than 1, or, in the case of a put, less than -1. When delta is close to 1 or -1, then gamma is near zero, because delta doesn’t change much with the price of the underlying stock.
Gamma and delta are greatest when an option is at the money—when the strike price is equal to the price of the underlying. The change in delta is greatest for options at the money, and decreases as the option goes more into the money or out of the money. Both gamma and delta tend to zero as the option moves further out of the money. The total gamma of a portfolio is called the position gamma.


THETA- Theta measures the time decay in an option, or the amount of money an option will lose each day due to the time passing. Theta is the expected change in option price due to the passage of time. Theta is expressed as the loss of time value per day. Thus, a theta of -.1 indicates that the option is losing $.10 per day.
For at the money options, theta increases as an option approaches the expiration date. Theta is very little for a long-term option, and increases as expiration nears. For in and out of the money options, theta decreases as an option approaches expiration.
Theta is greater for more volatile assets, because volatility increases the option premium by increasing the time value of the premium.
However, because time decay is generally considered to favor the option writer, a short position in options is said to have positive position theta. The net of the positive and negative position thetas is the total position theta of the portfolio.


VEGA- Vega is the sensitivity of the option price to changes in implied volatility. Vega measures the change in the option premium due to changes in the volatility of the underlying stock, and is always expressed as a positive number.
Vega tends to be the greatest when the option is at the money and least when the option is far out of the money or in the money.
Each individual option has its own vega and can react differently to changes in volatility. Vega estimates how much an option price would change when volatility changes 1%. It seems that volatility impacts are greater in the at the money options as opposed to the in or out of the money options. Vega seems to impact calls more than puts. If you look at longer term options such as LEAPS you will see the affect more clearly.

- Long calls and long puts; always have positive vega.
- Short calls and short puts; always have negative vega.
- Stock has zero vega; it’s value is not affected by volatility.

Positive vega- Option price increases when volatility increases, decreases when volatility decreases.
Negative vega-Option price decreases when volatility increases, increases when volatility decreases.
Example:
XYZ March 50 Call is going for $4, with Vega 0.20, volatility of ABC stock is 25%. Say the volatility increases to 26%. XYZ March 50 Call’s price will rise to $4.20. If the volatility drops to 24%, XYZ March 50 Call value drops to $2.80.
Vega falls when volatility drops or the option closes in on expiration. If there is more time left, vega should be higher.
Vega can move sometimes without any changes in the underlying volatility changing. For example, if expectation changes for a stock because of a impending earnings release, or an important news announcement. The vega can also rise quickly when things like a stock market crash or sudden move in a stock price.


Rho- Typically higher interest rates will result in a higher Call premium and lower Put Premiums. Rho is the amount of change in premiums due to a 1% change in the prevailing risk-free interest rate.]]>
DELTA- Delta measures how much an option price will move relative to the underlying asset. It is the percentage change in the option premium for each dollar change in the underlying option.
Some call it the 'hedge ratio.' For example, say you have a call option with a delta of 0.8, it means for every $1 the stock increases the call option will increase by 80 cents.

Call options said to be 'in the money' as it nears expiration, it will approach a delta of 1.00. When a Call option that is in-the-money put option nears expiration, it will approach a delta of -1.00.
Say a stock has a strike price of $20 and its price goes up $2. This will cause the Call option premium to rise by a certain percentage. Say the price rises $1. The Call option is said to have a positive delta of 50% because the premium increased $1 for a $2 stock price increase. The Put option on the other hand is said to have a negative delta because the Put option should decrease the same amount.
Options are many times used to hedge a position or risk. This is known as hedging risk. If, for instance, you own a 100 shares of a stock priced at $50 and you expect the price to go up after earnings. Once it goes up you may want to lock in your profits. What happens if your stock comes in under estimates? To protect your position how many Puts should you buy to hedge your position? If the delta of the put is -$.50, then the put will increase in value by 50¢ for each $1 drop in the price of the stock, at least while it hovers around the strike price. Therefore, you would want to buy 2 put contracts to cover or hedge your position. If the value of the portfolio doesn’t change within a narrow range, it is said to be delta neutral. The delta of a portfolio is sometimes called its position delta.

GAMMA- Basically the Gamma is the rate of change for delta as it relates to the stock price. Gamma is used to gauge how far an option price is compared to the degree it is in or out of the money.
If the option is deep in or out of the money it typically has a small Gamma. When the option is near or at the money the Gamma is at its largest value. As an option goes more into the money, delta will increase until it tracks the underlying dollar for dollar; however, delta can never be greater than 1, or, in the case of a put, less than -1. When delta is close to 1 or -1, then gamma is near zero, because delta doesn’t change much with the price of the underlying stock.
Gamma and delta are greatest when an option is at the money—when the strike price is equal to the price of the underlying. The change in delta is greatest for options at the money, and decreases as the option goes more into the money or out of the money. Both gamma and delta tend to zero as the option moves further out of the money. The total gamma of a portfolio is called the position gamma.


THETA- Theta measures the time decay in an option, or the amount of money an option will lose each day due to the time passing. Theta is the expected change in option price due to the passage of time. Theta is expressed as the loss of time value per day. Thus, a theta of -.1 indicates that the option is losing $.10 per day.
For at the money options, theta increases as an option approaches the expiration date. Theta is very little for a long-term option, and increases as expiration nears. For in and out of the money options, theta decreases as an option approaches expiration.
Theta is greater for more volatile assets, because volatility increases the option premium by increasing the time value of the premium.
However, because time decay is generally considered to favor the option writer, a short position in options is said to have positive position theta. The net of the positive and negative position thetas is the total position theta of the portfolio.


VEGA- Vega is the sensitivity of the option price to changes in implied volatility. Vega measures the change in the option premium due to changes in the volatility of the underlying stock, and is always expressed as a positive number.
Vega tends to be the greatest when the option is at the money and least when the option is far out of the money or in the money.
Each individual option has its own vega and can react differently to changes in volatility. Vega estimates how much an option price would change when volatility changes 1%. It seems that volatility impacts are greater in the at the money options as opposed to the in or out of the money options. Vega seems to impact calls more than puts. If you look at longer term options such as LEAPS you will see the affect more clearly.

- Long calls and long puts; always have positive vega.
- Short calls and short puts; always have negative vega.
- Stock has zero vega; it’s value is not affected by volatility.

Positive vega- Option price increases when volatility increases, decreases when volatility decreases.
Negative vega-Option price decreases when volatility increases, increases when volatility decreases.
Example:
XYZ March 50 Call is going for $4, with Vega 0.20, volatility of ABC stock is 25%. Say the volatility increases to 26%. XYZ March 50 Call’s price will rise to $4.20. If the volatility drops to 24%, XYZ March 50 Call value drops to $2.80.
Vega falls when volatility drops or the option closes in on expiration. If there is more time left, vega should be higher.
Vega can move sometimes without any changes in the underlying volatility changing. For example, if expectation changes for a stock because of a impending earnings release, or an important news announcement. The vega can also rise quickly when things like a stock market crash or sudden move in a stock price.


Rho- Typically higher interest rates will result in a higher Call premium and lower Put Premiums. Rho is the amount of change in premiums due to a 1% change in the prevailing risk-free interest rate.]]> <![CDATA[Spread Select Example-- Bull Call Spread]]> http://forums.dynamictrend.com/showthread.php?tid=627 Wed, 03 Jun 2009 16:55:36 -0400 Marc Rinehart http://forums.dynamictrend.com/showthread.php?tid=627 This can be a good strategy to use if you expect the stock has the ability to rise more than it falls. It is the most popular of the bullish spread strategies.
A Bull Call spread can be called a “vertical” or “debit” spread because it uses the same expiration month but different strike prices and it is also an options spread where the premium of the bought option is greater than the premium of the sold one. In a bull call spread the investor pays a net premium so they have a debit balance.
Why create a Bull Call spread? If the market is moderately bullish and has some volatility, if you use a Bull Call spread you can minimize your cash invested in a position and minimize your risk. You end up still reaping a little higher profit potential because you are essentially hedging your investment. Your potential loss is limited to the premium you paid for the calls, minus the commissions and the premium you collected for the calls you sold. This spread is a strategy commonly used and usually offers good liquidity.
Bull Call Spread Disadvantages
- Your commission expense is a little higher.
- It can be a little more complicated than just buying a put or call so you have to know what you are doing.
- If the stock goes up, you return is not as high as buying just a straight call option.
- If the stock continues to soar, you are gains are limited.
Bull Call Spread Advantages
- There is less capital outlay so your risk can be lower if you are wrong.
- If the stock goes down and you are confident in your prediction, you can close the higher strike sell call position and then sell it again when the stock goes back up.
Visa Bull Call Spread Example

Visa, Inc. (V) was an initial public offering (IPO) in March, 2008. After a month of trading the stock began a bullish trend. The stock began its first pullbacks in early May. If expectations are for this stock to remain moderately bullish in the near-term, a June Bull Call spread is worth checking out. We explore Buying an at-the-money or out-of-the money June call and Selling a call further away from the money than the June call purchased. We have around 30 days before expiration, and we believe it is reasonable to expect a push back into the $90 range or higher in that time frame.
Using the Spread Select feature within EduTrader we identify two attractive Bull Call spreads. The first Bull Call spread we Buy the June 85 strike and Sell the June 90 strike. Under this Bull Call spread strategy the maximum we risk is $165 and the maximum profit we would be able to receive is $335.
The second Bull Call spread we buy the June 85 and sell the June 95 strike. We could lose about $282.50 yet make more if Visa pushes above $95 in the next 30 days, as it has larger maximum profit potential around $717.]]> This can be a good strategy to use if you expect the stock has the ability to rise more than it falls. It is the most popular of the bullish spread strategies.
A Bull Call spread can be called a “vertical” or “debit” spread because it uses the same expiration month but different strike prices and it is also an options spread where the premium of the bought option is greater than the premium of the sold one. In a bull call spread the investor pays a net premium so they have a debit balance.
Why create a Bull Call spread? If the market is moderately bullish and has some volatility, if you use a Bull Call spread you can minimize your cash invested in a position and minimize your risk. You end up still reaping a little higher profit potential because you are essentially hedging your investment. Your potential loss is limited to the premium you paid for the calls, minus the commissions and the premium you collected for the calls you sold. This spread is a strategy commonly used and usually offers good liquidity.
Bull Call Spread Disadvantages
- Your commission expense is a little higher.
- It can be a little more complicated than just buying a put or call so you have to know what you are doing.
- If the stock goes up, you return is not as high as buying just a straight call option.
- If the stock continues to soar, you are gains are limited.
Bull Call Spread Advantages
- There is less capital outlay so your risk can be lower if you are wrong.
- If the stock goes down and you are confident in your prediction, you can close the higher strike sell call position and then sell it again when the stock goes back up.
Visa Bull Call Spread Example

Visa, Inc. (V) was an initial public offering (IPO) in March, 2008. After a month of trading the stock began a bullish trend. The stock began its first pullbacks in early May. If expectations are for this stock to remain moderately bullish in the near-term, a June Bull Call spread is worth checking out. We explore Buying an at-the-money or out-of-the money June call and Selling a call further away from the money than the June call purchased. We have around 30 days before expiration, and we believe it is reasonable to expect a push back into the $90 range or higher in that time frame.
Using the Spread Select feature within EduTrader we identify two attractive Bull Call spreads. The first Bull Call spread we Buy the June 85 strike and Sell the June 90 strike. Under this Bull Call spread strategy the maximum we risk is $165 and the maximum profit we would be able to receive is $335.
The second Bull Call spread we buy the June 85 and sell the June 95 strike. We could lose about $282.50 yet make more if Visa pushes above $95 in the next 30 days, as it has larger maximum profit potential around $717.]]> <![CDATA[Spread Select Example-- Bull Put Spread]]> http://forums.dynamictrend.com/showthread.php?tid=626 Wed, 03 Jun 2009 16:53:38 -0400 Marc Rinehart http://forums.dynamictrend.com/showthread.php?tid=626 A Bull Put spread is used when a market can be volatile, where the investor anticipates the market still has bullishness to it, or where the expectations are a market should rise more than fall. The spread is like writing a put with protection in place against a collapse in that market.
The Bull Put spread is a strategy similar to the Bull Call spread but the Bull Put spread there is a premium or credit that goes into your account when you establish the position.
The bull call spread can be considered a doubly hedged strategy. The price paid for the call with the lower strike price is partially offset by the premium received from writing the call with a higher strike price. The investor's investment in the long call, and the risk of losing the entire premium paid for it, is reduced or hedged.
The goal is to keep the premium. The basic idea is you want the asset to remain bullish and the sell puts to expire worthless. Because the Bull Put Spread is a “credit spread” you make money if the underlying asset stays stagnant through the decay part and the expiration of the more expensive short put options.
A Bull Put spread is similar to a Naked Put with the exception that you minimize your margin requirement and you limit your downside risk by purchasing a lower put strike price. Many traders like the idea of starting a trade with a profit. In a Naked Put or a Bull Put spread this happens when you get a credit to your account. With a Naked Put the trade can start to move against you and you cannot limit your downside risk. With a Bull Put spread you can essentially limit that portion of risk.
When compared to most options spreads the Bull Put spread is a lower risk but also lower reward potential strategy. While it ends up limiting a loss it also limits gains. The Bull Put spread strategy is a cheaper way of gaining exposure to a rise in the stock price than an outright buy of a call option and is safer than a naked written put.]]> A Bull Put spread is used when a market can be volatile, where the investor anticipates the market still has bullishness to it, or where the expectations are a market should rise more than fall. The spread is like writing a put with protection in place against a collapse in that market.
The Bull Put spread is a strategy similar to the Bull Call spread but the Bull Put spread there is a premium or credit that goes into your account when you establish the position.
The bull call spread can be considered a doubly hedged strategy. The price paid for the call with the lower strike price is partially offset by the premium received from writing the call with a higher strike price. The investor's investment in the long call, and the risk of losing the entire premium paid for it, is reduced or hedged.
The goal is to keep the premium. The basic idea is you want the asset to remain bullish and the sell puts to expire worthless. Because the Bull Put Spread is a “credit spread” you make money if the underlying asset stays stagnant through the decay part and the expiration of the more expensive short put options.
A Bull Put spread is similar to a Naked Put with the exception that you minimize your margin requirement and you limit your downside risk by purchasing a lower put strike price. Many traders like the idea of starting a trade with a profit. In a Naked Put or a Bull Put spread this happens when you get a credit to your account. With a Naked Put the trade can start to move against you and you cannot limit your downside risk. With a Bull Put spread you can essentially limit that portion of risk.
When compared to most options spreads the Bull Put spread is a lower risk but also lower reward potential strategy. While it ends up limiting a loss it also limits gains. The Bull Put spread strategy is a cheaper way of gaining exposure to a rise in the stock price than an outright buy of a call option and is safer than a naked written put.]]> <![CDATA[Welcome!]]> http://forums.dynamictrend.com/showthread.php?tid=625 Tue, 02 Jun 2009 17:34:58 -0400 Matt http://forums.dynamictrend.com/showthread.php?tid=625
Website: http://www.optiondynamics.com/
Help File: http://odhelp.dynamictrend.com/]]>
Website: http://www.optiondynamics.com/
Help File: http://odhelp.dynamictrend.com/]]> <![CDATA[June 1]]> http://forums.dynamictrend.com/showthread.php?tid=624 Tue, 02 Jun 2009 09:16:45 -0400 Marc Rinehart http://forums.dynamictrend.com/showthread.php?tid=624 <![CDATA[May 2009]]> http://forums.dynamictrend.com/showthread.php?tid=623 Mon, 04 May 2009 09:40:30 -0400 Marc Rinehart http://forums.dynamictrend.com/showthread.php?tid=623 <![CDATA[April 2009]]> http://forums.dynamictrend.com/showthread.php?tid=622 Tue, 07 Apr 2009 09:50:13 -0400 Marc Rinehart http://forums.dynamictrend.com/showthread.php?tid=622 Market Update (7 April 2009)

After two weeks of reflection and analysis, I don't think this is "the bottom" in the Dow Jones Industrial Average many longer-term investors would like to see. It would not surprise if me someday in the next year that low gets taken out. However, I think the current February bottom can hold for the spring months, potentially into the early summer. That is about the best guessing I can make at this stage of this Bear market decline.

Odds favor either a possible minor, intermediate or larger major Wave 4 rally is now in progress.

The best scenarios for the Dow Jones Industrial Average:

1) Short-Term: Will 8,000 resistance hold for the next two weeks? The harder it is for 8,000 to 8,100 to be broken through, the better the odds will be you can see a bigger pullback before the end of April. Odds favor this pullback would quickly pullback approximately 50%, to as low as 75%, if the advance since the February bottom starts to stall here. The lower it goes in the next two weeks the more we are interested in buying something on this pullback.

2) Near-Term: Monitoring to see if the market does not pullback but keeps inching towards 8,500 resistance, or higher 9,000 area. I would be surprised if this rally can sustain a move above 9,500 to 9,7500 before it has a major pullback.

The higher INDU goes without a serious pullback over the next 2 months, the more I will be seeking out the very best opportunities to eventually consider going Short at the right time and price.

For now, buying a (good) dip seems to still work for very aggressive traders who are maintaining tight trailing stops to protect those new trades. If we get no pullback this strategy will continue to work. The conservative trader still seems to desire a bigger pullback and will miss out if this happens. They will make their money later when they will eventually have better chances to sell into the higher resistance areas.]]> Market Update (7 April 2009)

After two weeks of reflection and analysis, I don't think this is "the bottom" in the Dow Jones Industrial Average many longer-term investors would like to see. It would not surprise if me someday in the next year that low gets taken out. However, I think the current February bottom can hold for the spring months, potentially into the early summer. That is about the best guessing I can make at this stage of this Bear market decline.

Odds favor either a possible minor, intermediate or larger major Wave 4 rally is now in progress.

The best scenarios for the Dow Jones Industrial Average:

1) Short-Term: Will 8,000 resistance hold for the next two weeks? The harder it is for 8,000 to 8,100 to be broken through, the better the odds will be you can see a bigger pullback before the end of April. Odds favor this pullback would quickly pullback approximately 50%, to as low as 75%, if the advance since the February bottom starts to stall here. The lower it goes in the next two weeks the more we are interested in buying something on this pullback.

2) Near-Term: Monitoring to see if the market does not pullback but keeps inching towards 8,500 resistance, or higher 9,000 area. I would be surprised if this rally can sustain a move above 9,500 to 9,7500 before it has a major pullback.

The higher INDU goes without a serious pullback over the next 2 months, the more I will be seeking out the very best opportunities to eventually consider going Short at the right time and price.

For now, buying a (good) dip seems to still work for very aggressive traders who are maintaining tight trailing stops to protect those new trades. If we get no pullback this strategy will continue to work. The conservative trader still seems to desire a bigger pullback and will miss out if this happens. They will make their money later when they will eventually have better chances to sell into the higher resistance areas.]]>