TradeKing Midday Market Call Recap - $SPX, $TIF

TK All-Star posted on 08/10/16 at 03:02 PM

Featuring @BrianOverby  &  @MNKahn




Quick Takes Pro Market Technician Michael Kahn Analyzes the S&P 500:


S&P 500 index (SPX) was trading at 2,186.46 at the time of analysis, up 5.75 on the day. The index has continued the recent trend of setting new highs, the break out to the upside last week has held strong. The main red flag that continues to lurk around is that the index is still quite a bit above the 200-day moving average - over 40 points, still hinting that the market is a little stretched out. Bottom line is that the trend is to the upside and although there some concerns in the charts, going along with the trend continues to be friendly.




Michael Kahn’s Chart of the Day: Tiffany & Company (TIF)


Tiffany & Company was trading at 63.72 down 52 cents on the day during the time of analysis. The trendline established over a year ago seems to be holding this stock down.  The stochastics indicator is showing a bearish divergence currently. The retail sector in general has not been doing well and this stock in particular has been in a declining trend. Michael thinks the path of least resistance is to the downside.




TradeKing “Options Guy” Brian Overby Analyzes Tiffany & Company (TIF)  - Volatility & Dividends:


TIF’s 30-day Implied Volatility (IV) has resin recently most likely because of the anticipated earnings announcement on August 25th. It is currently at the upper end of the range at around 36%.


TIF does pay a dividend. The yield is a hefty 2.84% and the most recent ex-dividend date was on June 16th and the amount was 45 cents per share.




Brian Overby Shares TIF Paper-Trading Strategies:


Brian’s first paper trade was a Long put spread, he is using a shorter expiration for the option contracts and this bearish trade done for a net debit to the account. The second paper trade is a bearish longer term expiration Long put.


Brian’s First Paper Trade - Long put spread.


- Buy 1 Aug 19th, 2016 TIF 65 Put

- Sell 1 Aug  19th, 2016 TIF 62 Put


- 10 days to expiration  


- Net Bid 1.23, Mid 1.31, Ask 1.38 for the strategy

- Net debit is 1.31 if we get it at the mid-price; note that this is not always possible


- Maximum potential loss: 1.31

- Maximum potential gain: 1.69


- Total commission to enter this trade at TradeKing is $6.25


Brian’s Second Paper Trade - Long put.


- Buy 1 Sep 16th 2016 TIF  60 Put

-  38 days to expiration


- Bid 1.34, Mid 1.40, Ask 1.45 for the put

- Debit is 1.45 if we pay the asking price


- Maximum potential loss: 1.45

- Maximum potential gain: 58.55 if the stock went all the way to zero.


Important notes: Option prices are given as a per-contract amount. Multiply loss and gain figures by 100 shares and by the number of contracts traded to determine the amount of the full potential loss or full potential gain. No additional calculations are needed to determine commission costs.


TradeKing Options Tools used:

- TradeKing Volatility Charts

- TradeKing Options Pricing Calculator

- TradeKing Probability Calculator

- TradeKing P&L Calculator


Options involve risks and are not suitable for all investors. Prior to buying or selling options, an investor must receive a copy of Characteristics and Risks of Standardized Options, sent to you in previous communication. Additional copies may be obtained by calling TRADEKING at 877-495-KING or by visiting www.TradeKing.com/ODD.


Multiple leg options strategies involve additional risks, and may result in complex tax treatments. Please consult a tax advisor.


At the time of publication and in the preceding month, TradeKing and/or Michael Kahn did not have ownership greater than 1% in any stocks mentioned; did not have any other actual, material conflict of interest known at the time of publication; have not received compensation from a public offering nor from investment banking services related to any companies mentioned within the past 12 months, nor expect to receive any in the next 3 months; nor engaged in market making in the securities mentioned.


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Posted by TK All-Star on 08/10/16 at 03:02 PM

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