Here are some trade options ideas:
When the SMA 50 is greater than 100 and When the Williams %R crosses below -50, enter.
When the Williams %R crosses above -50, exit.
For SPY, there was an 89.7% win rate, with avg rate of 0.33% per trade. Currently, 21% of SPY stocks fit these conditions.
Here are the first 30 actionable trades based on this, ranked on highest percent win rate:
These include highly liquid underlyings.
Let’s go over 8 option trades that may be promising in light of the above.
First, let’s look at the highest winner, ALGN [Align Technology]. There is relatively low volatility here now. First, I put on a calendar trade (15 MAR/18 APR) $250 call strike, and also put on a vertical in 18 APR selling the 290-280 put credit spread (bullish). If the stock goes down a little, stays the same or goes up, one would make money. BPR is about $1750.
Here is the P&L graph
Next look at HOG [Harley Davidson]. Here there is higher volatility so we open a butterfly: in 17 MAY 2018, we buy a CALL with buying 5 contracts of the $35 strike call, selling 10 contracts of the 37.5 call and buying of the $40 strike call. You risk very little (several hundred dollars) to make a $500-$1000 if the stock stays within a fairly narrow range, and on avg, it moves 3% or about $1-2 increase.
And the P&L
For the third trade, let’s look at the always fashionable BABA [Ali-Baba]. Here we have a low volatility situation, so we’ll put on a calendar AND a diagonal. Start with the $165 strike call calendar selling 3 of the 15 MAR calls and buying 3 of the 18 APR calls. Then add a diagonal, selling 2 MAR 15 $200 puts and buying 2 of the MAR 22 $165 puts.
This way, you benefit again, from rising volatility, time, and a slight decrease, no change, and increase in the price of the stock, giving you a very high probability trade that had a high probability to begin with. The trade:
And the P&L:
Next, we have BIDU, which has high implied volatility. Here we can put on a BROKEN WING butterfly, which will benefit from decreased volatility, time and can profit in all scenarios except for a large decrease in the stock. For 18 APR, Buy 3 of the 180 Put, sell 6 of the 175 put, and buy 3 of the 160 put.
The P&L:
Next, we have AYI [Acuity Brands]. Again, we have a higher volatility situation, so we put on a broken wing butterfly. For 17 MAY, buy 2 of the 140 puts, sell 4 of the 135 puts, and buy 2 of the 120 puts.
The P&L:
Next let’s look at SLB (Schlumberger (NYSE:SLB)). Again, volatility is somewhat high so we put on a broken wing butterfly. For 18 APR, buy 5 of the $50 strike puts, sell 10 of the $47.5 puts and buy 5 of the $40 puts.
Here is the P&L:
Next let’s look at EFX (Equifax (NYSE:EFX)). This too has relatively high volatility, so again we put on a broken wing butterfly. For 29 MAR, buy 3 of the $120 puts, sell 6 of the 114 puts and buy 3 of the $100 puts.
