CSP Updates for Sep 27

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Administratia:

Multi-timeframe uptrending stocks and ETFs have been updated for the open on Thursday, September 27th, and are available here.  The archive subfolder contains historical lists that you can review back in time and see how they would have performed going forward.

The alerts files (monthly historical as well as the alerts generated today, after market open), are available here.  The archive subfolder contains historical alerts files that you can review.

Real-time Q&A with me, if I'm available, is through this link:  https://discord.gg/4QAUqyd This is Dr. Jeff Scott's HGSI Discord forum and it's worth your time to join (free).

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Cash-Secured Put List Observations for Thursday, September 27th:

The market action over the last few days has forced removal of a number of candidates, relative to where we started the week.  We are down to 33 stocks and 11 ETFs as the total possible candidate list.  The individual components are provided above in the multi-timeframe list folder.

Premarket alerts that you may want to review are the following:

NFLX 181005P360, collect at least $2.15 to realize at least 20% annualized return on option (AROO)
ALGN 181005P370, $1.95, 18% AROO
SQ 181005P90, $0.97, 34%
UCO 181005P32.5, $0.35, 26%
NFLX 181012P360, $3.95, 23%
UPRO 181012P54, $0.55, 17%
EVH 181116P25, $0.75, 18%
TQQQ 180928P66, $0.25, 49%

These alerts will most likely vaporize at the open as they are the result of bid/ask values during non-trading times.  This being stated, they point to potential premium availability in the underlyings, and hence, there is juice in the chains worth capturing.

Pay particular attention to leveraged ETFs, as these will be volatile.

These are not recommendations, nor should you blindly jump into these and sell these contracts without doing your own due diligence.  Do your homework and own your decision.

Cash-Secured Put List Observations FROM Wednesday, September 26th:

A number of option symbols alerted yesterday and were sent to Twitter-land for your review (more on Twitter below):

ALGN 180928P375
ALGN 181005P375
ALGN 181012P375
ALRM 181019P52.5
BPT 181019P30
BPT 181116P30
CSOD 181019P55
EVH 181116P25
HES 181005P68
HES 181012P68
NBIX 181019P115
QLD 181019P94
TQQQ 181005P65.5
TQQQ 181012P65.5
TSCO 181026P85.5
UCO 180928P33
UDOW 181019P104
VNOM 181019P40
WWE 181019P90

All of these, if acted upon when the alert was generated, provided greater than 15% AROO if held to expiration and if they expired worthless.  The respective underlying symbols are showing increased opportunity to collect higher premium.

Again, not recommendations.  Do your homework and own your actions.

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Status of Twitter Alerts

My Twitter Alert feed is here:  https://twitter.com/GreekGodTrading 

My subscription with Zapier to link TradeStation email alerts to Twitter has hit the maximum allowed under their free plan (100 alerts per period).  They want $240 ($20 / month payable in a yearly traunch) for 1,000 alerts per month, which is far more than we will need.

I'm not willing to spend money on something that I have no need for.  I get the alerts (obviously), since they are running on my server.  The issue is that YOU don't get the alerts, and day-after does not make them actionable for you.

So, the ask:

I need to collect $240 total from you.  You can Venmo it to me here or via Paypal at pduncan@vt.edu.  If I do not receive enough monies I'll return your payment to you, less any charges (if there are any).  I'm certainly not looking to make any money from you -- I just want expenses covered for a service I provide for free (-ish) and that many of you have expressed that you receive benefit from.
Let your conscience decide what you should do.

A question came in over night on what is the breakdown of the Twitter information.  

Here is a typical Twitter alert:

ALGN:!P_CSP1.5. ALGN 181012P375, MinBid=$4.05, MinPrem=$293.71, Last=$393.11, AROO=23%, Prob=70%, Spread=$0.40, ROO=1.1%, Days2Exp=17, CashReqd=$37095, IVRank=11.6, StrikeInc=$2.50, Delta=-0.2390, ImplVol=0.34, TSTime=1450. 9/26/2018 2:50:55 PM

Let's break it apart:

• ALGN:!P_CSP1.5:  Header information from TradeStation.  The symbol is ALGN, and the strategy that generated the alert is !P_CSP version 1.5
• ALGN 181012P375:  The option symbol that meets the cash-secured-put criteria
• MinBid=$4.05:  This is the minimum amount that you will want to receive in premium, for selling one contract, in order to meet the listed annualized return on option (AROO) value in the alert (see below)
• MinPrem=$293.71:  This is the real-dollar-value, after commissions, adjustment for strategy parameters (win rate, buy-to-close value, etc.) that you will need to collect to hit the AROO.  The MinBid value above is the INCREMENT of bid/ask that you sell; MinPrem is the actual value, including adjustments, that you will collect and put in your bank account after the dust settles.
• Last=$393.11:  The last trading price of ALGN at the time of the alert
• AROO=23%:  If you get the numbers presented in the alert, this is your MINIMUM annualized return.
• Prob=70%:  This is the Black-Scholes pricing model estimate of probability of being OTM at options expiration.  I only alert on symbols that have at least 68% ProbOTM.
• Spread=$0.40:  The current spread between bid-ask.  I only alert if this value is less than $0.49.
• ROO=1.1%:  Return on Option.  This is what you will get in premium divided by the option strike price less any option premium received.  The denominator is your risk; the numerator is your reward.
• Days2Exp=17:  Days to expiration.
• CashReqd=$37095:  This is the minimum amount you must have in your account to sell 1 contract.  This is the cash secured value of the option contract.
• IVRank=11.6:  Implied volatility rank.  At the time of the alert, the IV of ALGN is only 11.6% of the yearly range.
• StrikeInc=$2.50:  The next lowest strike is $2.50 away
• Delta=-0.2390:  The greek "delta" for this option symbol is negative 0.2390.  I typically stay below the 25 delta for most of my CSPs
• ImplVol=0.34:  Implied volatility:  34%
• TSTime=1450:  Tradestation time that the alert was generated
• 9/26/2018 2:50:55 PM:  Twitter date/time that the alert was posted.

If there are any questions about what to do with these alerts please post here, send me a note, or engage me at the Discord CSP-CC forum.

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That's all for now.  If you have questions -- ask.

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As with all my ramblings, you are responsible for your own actions and I am not.  Nothing I've written here is advice to buy or sell any security, so don't do it unless you absolutely take ownership for your actions.

Regards,

Paul