METHOD: Long PAYPAL {price at entry 104.93} via:
+2 PYPL 20 DEC 19 102 CALL @3. 40 ; Trading with 0.50 of extrinsic value, with decay only threatening if losing the trade.

STRATEGIES: Using DIS day chart:
  • The 20/50 Mean green cloud contracts, and we can look for a new expanding cloud to form for a long from the mean.
  • The Fisher Transform bounce signal appearing near the mean.

TACTICS: The plan in terms of stock price:
  • STOP is price < 102
  • TGT 108 to exit
  • Trail option price to Break Even once stock price > 106; OR consider scaling as green cloud becomes large
  • We may let the Fisher Transform and 20/50 mean together take us out technically for whatever we get win or lose.

Will update in comments,
Operación activa: Filled.
Comentario: "Trail option price to Break Even once stock price > 106"
Trail set. The options are up 61% at this point.
Posición cerrada: objetivo alcanzado: Though the price was 10 cents below 108, the options at 102 paid me the 6 in delta I was after. Paid 3.40 for them for 76.4% win.
B3@SCRIPTaCHART.com ~ Email
http://www.virtuosotrader.com ~ Personal Blog (no ads)
http://www.SCRIPTaCHART.com ~ Custom Script Work


Hi B3. Interesting analysis. Is there any reason you are not selling puts to initiate your position?
HammondB3 dave.seremek
@dave.seremek, Thanks. IVpercentile is 3.6 and IVrank is 6 ... Buy to initiate when options are cheap, any inflation in volatility will help your position. I would only sell puts or a put-spread had the options premium been inflated, which is shown by the IV metrics that they are not. If I planned to own the stock, I would also consider selling puts.
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