CML TradeMachine Trade Ideas

[cuegis]

3 hours ago, NikTam said:

@cuegis like you I use CML as a starting point.  I find candidates using the Trade Machine then screen them using my own charts and indicators.  With an eye on liquidity, spreads, open interest, etc. and past experience with a stock, if any.

I think I caught a key reversal (bottom) today, in GILD.

Take a look at it from "Daily" down to a few shorter term time frames.

If it is a "real" reversal, then it has plenty of room for a nice move.

[NikTam]

1 hour ago, cuegis said:

I think I caught a key reversal (bottom) today, in GILD.

Take a look at it from "Daily" down to a few shorter term time frames.

If it is a "real" reversal, then it has plenty of room for a nice move.

Looks very interesting.  30min, 1hr and 2hr squeeze going on.  I would like to see it close above 74.90 which is the 34 EMA low.  (I track 34 EMA low mid and high).  Nothing on Trade Machine to support a bull squeeze, but I still would consider.

[NikTam]

Pre-Earnings Long Calls/Verticals:  AMAT looking good.  HD still not doing much.  CSCO is the bad child today.

[cuegis]

1 hour ago, NikTam said:

Looks very interesting.  30min, 1hr and 2hr squeeze going on.  I would like to see it close above 74.90 which is the 34 EMA low.  (I track 34 EMA low mid and high).  Nothing on Trade Machine to support a bull squeeze, but I still would consider.

I caught GILD and K, which has been a monster the past 2 days..

I think GILD has more room. And,if it is just day 1 ,of a major reversal, we could see an extended move.

It strongly gapped down at the opening into the lowest lows for this recent downtrend, then instantly reversed, and turned positive, and continued to make newer highs throughout the entire day.

It could be day 1.

[cuegis]

1 hour ago, NikTam said:

Looks very interesting.  30min, 1hr and 2hr squeeze going on.  I would like to see it close above 74.90 which is the 34 EMA low.  (I track 34 EMA low mid and high).  Nothing on Trade Machine to support a bull squeeze, but I still would consider.

Are you in the official PANW calendars?

They have been very strong as the price moved lower by about $12 since we first put it on. They held up well.

It looks like PANW might also had a reversal (low) today. It reached it's lowest low ($137), very early in the day, then had a strong reversal, spending the remainder of the day making higher highs,and will likely close up strongly on the day, reversing this downtrend.

If so, it will bring the stock right back into the prime zone for our calendars.

I have a few $140's but, mostly $145's, $150, and a few $155's

[NikTam]

53 minutes ago, cuegis said:

Are you in the official PANW calendars?

They have been very strong as the price moved lower by about $12 since we first put it on. They held up well.

It looks like PANW might also had a reversal (low) today. It reached it's lowest low ($137), very early in the day, then had a strong reversal, spending the remainder of the day making higher highs,and will likely close up strongly on the day, reversing this downtrend.

If so, it will bring the stock right back into the prime zone for our calendars.

I have a few $140's but, mostly $145's, $150, and a few $155's

I took a quick look before market close.  The prices are still quite a bit higher than the official trade so I stayed out. 

[cuegis]

1 hour ago, NikTam said:

I took a quick look before market close.  The prices are still quite a bit higher than the official trade so I stayed out. 

Yes they are higher than the "official" prices but, I very often do not take those prices seriously.

Just as often as not, They will give a price like ."90, .95,..but don't chase it over $1.00".

Then, the second you put it on your screen, all you see is $1.15/ $1.40.

Then, the next day, it is $1.20 or $1.25 on the bid, with a few actual trades at $1.35.

This is such a common scenario.

So, you will never buy these spreads anywhere near the official.

I just use it as a guide, and then observe market behavior for this particular trade.

Everytime I buy these at $1.15 or $1.20, for example, I am usually able to sell a few, within a day or 2, for like $1.35 and, at the end of the trade, with 1-2 days before earnings, I typically get out, along with most people here, for as high as $1.75

I wouldn't put too much attention on the official price in many of these trades, because, not only is there no chance to ever buy near that price anymore but, even buying .20 cents higher, will still provide excellent profits.

When this trade came out, the market was instantly bid around .15-.20 cents higher, than the official alert stated only a few minutes ago.

And I tried to get in as close to what the current bid was, and whenever I was able to, the trades always led to profits.

This one was instantly .15 -.20 cents above the official price,and it never went back down below the "real" prices.

Yes, it is another issue completely, if you get into a $155 strike and over the next week, the stock drops,(or rises) way outside of the "expected " move.

Even in those cases, the spreads very often hold up well, even beyond a large move away from the original price.

I'm not saying that this is the ONLY way "official" trades should be dealt with.

There are many times when after an initial surge, it actually does pull back in the next few days.

But, you just have to get used to doing them many times, and eventually,you will get better at knowing which way to deal with these.

[NikTam]

@cuegis very interesting comments.  Thanks for sharing your experience.  I may try calendars again.  I generally did ok with them  but then there weren’t that many of them for several months. I will start monitoring them more closely And keep your comments in mind about pricing.   But I agree with you that it is almost impossible to get in at the official price. 

[siddharth]

Why do you feel a call spread is better than the 40 delta call. Does this have the same risk reward concerns that @Yowster raised ?

 

Also, is there a way in CML that you could filter by possible trades in the next week or so. Some earnings in the scanner have dates in 2018 and so showing them now doesn't really help

 

Edited November 11, 2017 by siddharth310584

[cuegis]

13 minutes ago, siddharth310584 said:

Why do you feel a call spread is better than the 40 delta call. Does this have the same risk reward concerns that @Yowster raised ?

 

Also, is there a way in CML that you could filter by possible trades in the next week or so. Some earnings in the scanner have dates in 2018 and so showing them now doesn't really help

 

It all depends upon how long you generally expect to hold the position.

If it is 1-3 days, then theta is not really going to hurt you.

But,if you are not sure, and could be holding onto the trade for a longer period of time, like 4+ days., then it might be better to put on a vertical (or, depending on the pricing) maybe a diagonal.

A lot of these are positions that you hold for 1-3 days, so time decay is not a big issue.

Edited November 11, 2017 by cuegis

[cuegis]

13 hours ago, NikTam said:

@cuegis very interesting comments.  Thanks for sharing your experience.  I may try calendars again.  I generally did ok with them  but then there weren’t that many of them for several months. I will start monitoring them more closely And keep your comments in mind about pricing.   But I agree with you that it is almost impossible to get in at the official price. 

I only recently started tracking calendars that do not have earnings anywhere in the near future. Just to take advantage of positive theta.

Also, I usually have something that is a directional based trade, that will be a debit (either straight out call or put, or vertical), so I want to keep balance by having positive decay coming in.

I looked at a few big names,....stocks that are at least $100-$400, and have a tendency not to move that much , post earnings.

I forgot which one,but it was a big name , that recently had earnings, and settled down.

The spread was around $1.10, when I first started tracking it, and within 5 days, it was $1.75.

So, now I'm trying to figure a way to scan for the best "non earnings related" calendars.

I think many of them have as much, or even greater potential, than the pre earnings ones.

Plus , you don't have groups of people who, suddenly,at the same moment in time, all jump in and start chasing it.

It allows for an easier entry.

[NikTam]

Would these stocks tend to be those that don’t back-test well for post earnings straddles?  

[cuegis]

19 minutes ago, NikTam said:

Would these stocks tend to be those that don’t back-test well for post earnings straddles?  

Long straddles I assume?

I have to think about that.

Another idea hit me yesterday, that needs to be looked into.

Because of the nature of this animal (SVXY), I was thinking of , only after an oversized, 1 day move, (up or down) putting on an ATM iron butterfly.

In all probability, from this point, SVXY, will, very quickly, have another very large move.

In the recent past, that move is mostly a reversal, right backup, after a outsized down day.

But, one of these days, the big down day, will be followed by more continued move to the downside.

It is on the first large move, that you put on the position (long ATM straddle/short x delta strangle). Now you are delta neutral.

Then, on the next , follow up move ( up or down, you are neutral, it dosnt matter), you take profits on the winning half of the position.

Then , on the next reversal, in favor  of your remaining position (long put, or call vertical), you exit the other half.

The SVXY ,more than anything else, provides enough large movements, in both directions, in a short amount of time, once it has started, to allow, at worst....large profit on half/break even on the other half. Or, at best, profit on both halves.

Just a thought that  came to me , and needs to be examined much more thoroughly. It was just the seed of an idea.

Edited November 11, 2017 by cuegis

[zxcv64]

Interesting idea about SVXY. I'd like to explore this, and am hoping that there will be a little bit of turbulence in the markets so the fluctuations start happening in SVXY more often.

Pls keep posting if you have any findings on this front.

2 hours ago, cuegis said:

So, now I'm trying to figure a way to scan for the best "non earnings related" calendars.

I think many of them have as much, or even greater potential, than the pre earnings ones.

Plus , you don't have groups of people who, suddenly,at the same moment in time, all jump in and start chasing it.

It allows for an easier entry.

I was causally looking for non-earnings calendar opportunities a while back. Without putting too much thought, or analysis, I started trading 1-lot AAPL calendars with the shorts about 1-3 days away,and the longs a fortnight out. In 11 trades I made an average of 12%. I just wanted to see if something like could be worthwhile pursuing. The comms were quite high, and although I had a good run, it just needs a few quick moves of the underling to make my figures all very different. I think I'll re-visit this strategy.

But the problem with individual stocks is the comms and scalability. So, if there were some calendar trades on the indexes (SPX etc), then these would be much more worthwhile.

I think there is definitely potential in non-earnings calendars/trades.

[cuegis]

3 minutes ago, zxcv64 said:

Interesting idea about SVXY. I'd like to explore this, and am hoping that there will be a little bit of turbulence in the markets so the fluctuations start happening in SVXY more often.

Pls keep posting if you have any findings on this front.

I was causally looking for non-earnings calendar opportunities a while back. Without putting too much thought, or analysis, I started trading 1-lot AAPL calendars with the shorts about 1-3 days away,and the longs a fortnight out. In 11 trades I made an average of 12%. I just wanted to see if something like could be worthwhile pursuing. The comms were quite high, and although I had a good run, it just needs a few quick moves of the underling to make my figures all very different. I think I'll re-visit this strategy.

But the problem with individual stocks is the comms and scalability. So, if there were some calendar trades on the indexes (SPX etc), then these would be much more worthwhile.

I think there is definitely potential in non-earnings calendars/trades.

I don't think that what caused your problems were that it was stocks as opposed to other underlyings.

The whole issue here is that you were playing with virtually all negative gamma.

You can't have the shorts 1-3 days out, and longs 2 weeks away.

It's really a bad combination.

In these trades, negative gamma is your biggest enemy.

I would go much further out and try testing this again.

Sell something around 2-3 weeks out, then, depending on the pricing of the calendar, you go about figuring out where the longs should be.

Just off the top of my head, something like short 2-3 weeks out, and long 2-4 weeks after that.

And, if possible, always try to have at least 1 of the legs be a monthly.

Ideally a 4 week calendar, where both legs are monthlies, and the short leg is at least 2-3 weeks away.

I think you were using the wrong setup for your test.

Obviously you want the largest difference between your 2 gamma numbers...shorts decaying at a much faster pace than the longs.

But, selling extremely short term options is definitely the wrong way to get there.

[NikTam]

On 11/11/2017 at 10:30 AM, cuegis said:

Long straddles I assume?

I have to think about that.

Another idea hit me yesterday, that needs to be looked into.

Because of the nature of this animal (SVXY), I was thinking of , only after an oversized, 1 day move, (up or down) putting on an ATM iron butterfly.

In all probability, from this point, SVXY, will, very quickly, have another very large move.

In the recent past, that move is mostly a reversal, right backup, after a outsized down day.

But, one of these days, the big down day, will be followed by more continued move to the downside.

It is on the first large move, that you put on the position (long ATM straddle/short x delta strangle). Now you are delta neutral.

Then, on the next , follow up move ( up or down, you are neutral, it dosnt matter), you take profits on the winning half of the position.

Then , on the next reversal, in favor  of your remaining position (long put, or call vertical), you exit the other half.

The SVXY ,more than anything else, provides enough large movements, in both directions, in a short amount of time, once it has started, to allow, at worst....large profit on half/break even on the other half. Or, at best, profit on both halves.

Just a thought that  came to me , and needs to be examined much more thoroughly. It was just the seed of an idea.

Yes, I was thinking back-testing long straddles as a way to back into the search for non-earnings calendar candidates.  My thinking is that if symbol tracks poorly for post earnings long straddles then that means there is typically low vol and little gamma movement on those tickers -- which I think would be good for the calendar since we are looking for unobstructed time decay on the short position to increase the spread between the short and the long positions -- correct?

[krisbee]

Stock TGT, Earnings 11/15/2017

Strategy: Sell 30 delta Buy 10 delta PUTS

When: After 2 days of earnings.

Backtest URL: http://www.cmlviz.com/cmld3b/index.php?number=11801&app=news&cml_article_id=20171110_intelligent-options-trading-right-after-earnings-in-target-corporation

Past 12 cycle Success rate: 12-0 (win-loss)

 

 

Edited November 13, 2017 by krisbee

[siddharth]

@NikTam

Are you still in CSCO ? It seems to be just bleeding so wondering if we should stop the pain.

 

[krisbee]

Stock ADI

Earnings: Optionslam 11/21/2017

Strategy: enter Pre earning and exit pre earnings. Buy 40 delta CALL

Backtest URL: http://www.cmlviz.com/cmld3b/index.php?number=11793&app=news&cml_article_id=20171106_the-5-day-pre-earnings-momentum-in-analog-devices

 

[NikTam]

@siddharth310584  Yes I am still in CSCO vertical but am losing interest.  If nothing changes I will exit before end of day.  Right now a small loss on .29 entry price.

HD and AMAT up nicely.  (Almost out of the hole with HD.)

[NikTam]

ADI does look good.  I will get in early if I can with the hope of a double-play as the 10 day back-test looks good, too http://tm.cmlviz.com/index.php?share_key=20171113182242_URhcZ8lRsB3hbgZb

I will bottom fish and see if I can get a good fill. 

Or wait for a breakout above 90.25 and get in at that point would be a more conservative strategy.

 

Edited November 13, 2017 by NikTam

[siddharth]

Adi doesn’t seem to have weekly options 

[NikTam]

@krisbee The PCS on TGT looks attractive but as was pointed out earlier by @Yowster you have to be aware of the risk-reward on these trades.  One loser can offset a lot of winners.

[krisbee]

Just now, NikTam said:

@krisbee The PCS on TGT looks attractive but as was pointed out earlier by @Yowster you have to be aware of the risk-reward on these trades.  One loser can offset a lot of winners.

Yes, I'm not planning for TGT after earnings as for 5$ spread there is only 1$ credit. I'm listing all the CMLVIZ newsletter here in this thread.

[NikTam]

BOT  ADI P-E Momentum Long Call 12/15 92.5 @1.35   Set my OCO for 40%gain/40%loss.

 

http://tm.cmlviz.com/index.php?share_key=20171113182242_URhcZ8lRsB3hbgZb

Edited November 13, 2017 by NikTam

[NikTam]

I exited CSCO for small loss.

HD (finally) off to the races.  I sold 2/3 position for a BE and may hold rest through earnings on this one.

AMAT and ADI looking good.

 

I finished exiting HD position right at end of trading day.  My total net gain/loss on this one was -7%.

 

The 167.5 call was trading at 1.70 - 1.85 all afternoon.  Just for fun I offered my last contract at 2.40 just before the close thinking I will either get that or will hold into earnings.  I never saw a price above 1.95 on TOS screen but it went for 2.40 in last 5 seconds --now I'm sure it will jump on earnings tomorrow morning!

Edited November 13, 2017 by NikTam

[cuegis]

53 minutes ago, NikTam said:

I exited CSCO for small loss.

HD (finally) off to the races.  I sold 2/3 position for a BE and may hold rest through earnings on this one.

AMAT and ADI looking good.

 

I finished exiting HD position right at end of trading day.  My total net gain/loss on this one was -7%.

 

The 167.5 call was trading at 1.70 - 1.85 all afternoon.  Just for fun I offered my last contract at 2.40 just before the close thinking I will either get that or will hold into earnings.  I never saw a price above 1.95 on TOS screen but it went for 2.40 in last 5 seconds --now I'm sure it will jump on earnings tomorrow morning!

I only had CSCO from this lot.

I still have it. I'm on the fence about it.

But, slightly relieved to see a bump in after hours.

It still has 2 more days, so we are within the CML plan.

[siddharth]

I held onto Amat even after I had r aches 20% profit and now it dropped and is punishing me. Do you think k it prudent to just cut losses on Amat and csco now ?

[bam1960]

5 minutes ago, siddharth310584 said:

I held onto Amat even after I had r aches 20% profit and now it dropped and is punishing me. Do you think k it prudent to just cut losses on Amat and csco now ?

I am holding AMAT dont have CSCO

[NikTam]

Still holding AMAT.  Exited CSCO yesterday morning.  Exited HD end of day yesterday.   

Also holding ADI.  

[greenspan76]

Haven't reported much on individual stocks, but I closed AMAT yesterday for 30.4% gain after commissions (I think my entry and exit was well-timed, but that was just luck). Also closed TJX 70 Dec call yesterday for 13.4% gain and HD 167.5/180 Dec1 call spread (in lieu of straight call) for 6.1% loss. Opened the ADI 92.5 Dec15 call this morning on a little dip for $1.46 (it went lower after my entry)

[NikTam]

AMAT getting hammered.  I will hold until tomorrow.  I think the big guys knock the price down to create a flush - then buy it back into earnings.  

[krisbee]

CML Pro subscription became 19$/month?

 

http://pro.cmlviz.com/register/cml-pro-19-per-month-membership-promotion/?source=Ophir#register

 

 

[Kim]

No, that's a different product.

[siddharth]

1 hour ago, NikTam said:

AMAT getting hammered.  I will hold until tomorrow.  I think the big guys knock the price down to create a flush - then buy it back into earnings.  

Why do you think this ?

[NikTam]

 Looks like ADI is breaking out.  I'm adding a bit to my position.

[NikTam]

@siddharth310584  Why?  Because it's pattern I've seen before.  And I think the big investment banking firms work together to enrich themselves -- because they can.  And the SEC is not a serious threat to them.   I know it's a silly idea and I'm just paranoid.  :-0

[krisbee]

On 11/13/2017 at 12:30 PM, krisbee said:

Stock ADI

Earnings: Optionslam 11/21/2017

Strategy: enter Pre earning and exit pre earnings. Buy 40 delta CALL

Backtest URL: http://www.cmlviz.com/cmld3b/index.php?number=11793&app=news&cml_article_id=20171106_the-5-day-pre-earnings-momentum-in-analog-devices

 

it's 22% up for me. Opened this morning. GREEDY now, i'm going to hold tomorrow also.

 

 

[NikTam]

Yes! Very nice.  Thanks for sharing!

[siddharth]

All getting hammered today. What are you doing with adi csco and Amat ?

[NikTam]

Waiting to see what happens with AMAT later today -- I'm in a vertical so my loss is not as bad.  I will hold onto ADI.  I exited CSCO couple of days ago.

[NikTam]

PANW http://tm.cmlviz.com/index.php?share_key=20171115150803_qn4s9xWLBQ4PJScY

This could be interesting if NASDAQ starts climbing out of the hole.  PANW reports on Monday the 20th which would mean getting in on a reversal today or tomorrow and then exiting on Friday (11/17).

 

The link is a vertical which may not make much sense since it's such a short trade.  I'm reacting more to market volatility.  A simple long call may be better.  Not sure.

Edited November 15, 2017 by NikTam

[siddharth]

Could hold onto Amat into tomorrow since it’s earnings are after close 

[NikTam]

6 minutes ago, siddharth310584 said:

Could hold onto Amat into tomorrow since it’s earnings are after close 

Good point.  May want to in this case. 

[krisbee]

18 hours ago, krisbee said:

it's 22% up for me. Opened this morning. GREEDY now, i'm going to hold tomorrow also.

 

 

22% vanished today. it's around 1% now.

[cuegis]

58 minutes ago, siddharth310584 said:

All getting hammered today. What are you doing with adi csco and Amat ?

CSCO not getting hammered. it's +.05-.10 cents, but I think the options are rising from IV because it is the last day.

I got whacked this morning on K (Kellogg).

I have been doing extremely well with it for the past 1-2 weeks. It closed on a new, recent high yesterday, opened unchanged, even rallied .20 cents, then out of nowhere dropped straight down , nearly $2.00.

I researched it and found that one of the top chiefs in the company, just dumped 200,000 ( or was it 2 million) shares about 10 minutes after the open.

But,it is recovering.

[NikTam]

1 hour ago, krisbee said:

22% vanished today. it's around 1% now.

Exited my AMAT vertical for 6.5% loss.  I'm not available this afternoon to watch this closely so I'm out.

[NikTam]

3 hours ago, NikTam said:

PANW http://tm.cmlviz.com/index.php?share_key=20171115150803_qn4s9xWLBQ4PJScY

This could be interesting if NASDAQ starts climbing out of the hole.  PANW reports on Monday the 20th which would mean getting in on a reversal today or tomorrow and then exiting on Friday (11/17).

 

The link is a vertical which may not make much sense since it's such a short trade.  I'm reacting more to market volatility.  A simple long call may be better.  Not sure.

I have changed my mind about PANW.  The trend has been bearish.  And furthermore too much negativity going on with the Nasdaq. 

[siddharth]

@NikTam

what are your thoughts on AMAT. do you still think we will see some buying into earnings tomorrow ?

[NikTam]

I am still holding ADI but that's it.  I think there have been more losers than winners lately for me on the P.E. momentum trades -- need to update my spreadsheet this weekend. 

But it's no surprise that these plays really are creatures of the overall trend - with some exceptions.