High Trading Results

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Trading journey to financial freedom

Trading Results

Trading results are a key component of my transparency initiative. Below please find results from various high risk trading strategies I employ.

Earning Results Strategy

Week of 7/13-7/17/15

All are 7/17/15 option expiration:

GAIN $OZRK $45 Calls @.$90 7/10-> @$1.60 7/13
ER miss 7/13 AH

$WFC $56 Calls @.$57 7/10-> @$1.25 7/14
ER beat 7/14

$YUM $91 Calls @$1.50 7/10-> @$2.50-$3 7/13-7/14
ER miss 7/14 AH

$BAC $17 Calls @$.17 7/13-> @$.70 7/14
ER beat 7/15 BO

$DAL $42 Calls @$1.57 7/13 (@$.50 7/10)-> @$2.10 7/15
ER beat 7/15 AH but lower Q3 guidance

$NFLX $850 Calls ($121 post split) @$.10 7/13-> @$.09 7/15
ER beat 7/15 AH

$DPZ $120 Calls @$2.50 7/13-> @$3.00 7/15
ER miss 7/16 BO

$C $55 Calls @$.69 7/13-> @$1.80 7/15
ER beat 7/16 BO

$GOOG $560 Calls @$2.50 7/13-> @$12.50 7/15
ER beat 7/16 AH

$GE $27 Calls $.08 7/13-> @$.16 7/15
ER beat 7/17 BO

Week of 7/20-7/24/15

GAIN $MS $40 Calls 7/24 @$.47 7/17-> @$1.00 7/20
ER beat 7/20 BO

GAIN $IBM $172.50 Calls 7/24 @$2.02 7/17-> @$3.50 7/20
ER miss 7/20 AH

GAIN $VZ $47.50 Calls 7/24 @$.48 7/17-> @$.60 7/20
ER miss 7/21 BO

GAIN $GPRO $57.50 Calls 7/24 @$3.10 7/20-> @$5.50 7/21
ER beat 7/21 AH

GAIN $OC $42 Calls 8/21 @ $2.10 7/20-> @$2.20 7/21 and @$3.50 if held through ER
ER beat 7/22 BO

GAIN $INFN $24 Calls 8/21 @$.50 7/20-> @$.55 7/22.
ER beat 7/22 AH

GAIN $UA $87.50 Calls 8/21 @$3.75 7/20-> @$5.10 7/22.
ER beat 7/23 BO

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GAIN $P $14 Puts 7/24 @$.71 7/20-> @$.79 7/23.
ER beat 7/23 AH

N/A $AAN $37 Puts 8/21 no trade. Low volume.
ER beat 7/24 BO

LOSS $VOD $37 Calls 8/21 @$1.03 7/20-> $.81 7/22.
ER beat 7/24 AH

Week of 7/27-7/31/15

LOSS $CROX $14 Puts 8/21 @$.92 7/27-> @$.72 7/29.
ER beat 7/29 AH

EVEN $EMN $75 Calls 8/21 @$1.56 7/24-> @$1.56 7/27 (@$3.50 7/28).
ER beat 7/27 AH

LOSS $CNC $70 Calls 8/21 @$2.90 7/24-> @$2.70 7/27.
ER mixed 7/28 BO

GAIN $TWTR $36 Calls 7/31 @$1.56 7/27-> @$2.90 7/28.
ER beat 7/28 AH

GAIN $ANTM $155 Calls 7/31 @$1.11 7/27-> @$1.95 7/28.
ER beat 7/29 BO

GAIN $FB $97 Calls 7/31 @$2.71 7/28-> @$3.90 7/29.
ER beat 7/29 AH

GAIN $TASR $32 Calls 7/31 @$.52 7/28-> @$1.30 7/29.
ER beat 7/30 BO

GAIN $LNKD $240 Calls 7/31 @$5.20 7/28-> @$9.10 7/29.
ER beat 7/30 AH

EVEN $STX $47 Puts 7/31 low volume-> wait for entry
ER mixed 7/31 BO

EVEN $TYC $35 Puts 8/21 low volume-> wait for entry
ER beat 7/31 AH

GAIN $TSN $44 Calls 8/21 @$1.40 7/30-> @$1.53 7/31
ER miss 8/3 BO

GAIN $CAR $45 Calls 8/21 @$1.40 7/31-> @$1.53 8/3
ER miss 8/3 AH

GAIN $DIS $121 Calls 8/7 @$1.81 8/3-> @$2.40 8/4
ER miss 8/4 BO

GAIN $ATVI $26 Calls 8/7 @$.33 8/3-> @$.56 8/4
ER beat 8/4 AH

GAIN $PCLN $1,310 Calls 8/7 @$15.30 8/3-> @$28.10 8/4
ER beat 8/5 BO

GAIN $GMCR $75 Calls 8/7 @$3.96 8/3-> @$4.75 8/5
ER miss 8/5 AH

GAIN $KORS $42 Calls 8/7 @$.55 8/4-> @$1.00 8/5
ER beat 8/6 BO

GAIN $STMP $70 Calls 8/21 @$3.50 8/3-> @$5.95 8/5
ER beat 8/6 AH

GAIN $EBIX $31 Calls 8/21 @$1.55 8/3-> @$2.80 8/6
ER 8/7 Day

GAIN $WWAV $52.50 Calls 8/21 @$1.35 8/4-> @$1.86 8/5
ER 8/7 BO

Why ERs? Because anticipation before announcement and more certainty after can trigger pps trend reversals or spark a stronger trend. Trader emotions can act as catalyst before ER and actual results act as a catalyst that sway traders after ER.
Chart analysis has netted more gains than holding through an ER in my past trading experience. I suggest trading before or after earning release using chart analysis to predict pps trends.

I suggest trading tickers before and after ER. Holding through ER is nothing short of gambling. See my Research Projects page for my educated ER predictions and how the win % was worse than a flip of a coin (50/50 odds of a win).

OTC QBs (penny stocks)

Ticker entry date entry pps-> exit pps

$BARZ 7/20 $.125-> $.18

$BFCF 6/1 $3.40-> $3.80.

$BFCF 8/6 $3.40-> $3.56.

$COCP 3/19 $1.00-> $1.40.

$RTNB 5/3 $1.50-> $2.50.

$RTNB 7/15 $.80-> $1.25.

OTC QBs have a higher level of transparency than OTC Pink due to SEC filing requirements, audits, and the $.01 bid test to keep the QB status. I generally find management dilution is at a slower pace that can be seen more easily via chart analysis.

What Is High Frequency Trading and How Does It Work?

Aug 19, 2020 5:09 PM EDT

High frequency trading continues to grow and influence the day-to-day movements in the markets. What is high frequency trading and why should all investors care about it?

What Is High Frequency Trading?

High frequency trading refers to automated trading platforms used by large institutional investors, investment banks, hedge funds and others. These computerized trading platforms have the capability to execute a large volume of trades at very high speeds.

The SEC doesn’t have a formal definition of high frequency trading, but they attributed these five characteristics to high frequency trading in a study several years ago:

Use of extraordinarily high speed and sophisticated programs for generating, routing, and executing orders.

Use of co-location services and individual data feeds offered by exchanges and others to minimize network and other latencies.

Very short time frames for establishing and liquidating positions.

Submission of numerous orders that are canceled shortly after submission.

Ending the trading day in as close to a flat position as possible (that is, not carrying significant, unhedged positions overnight).

There is no set definition of high frequency trading, but the SEC criteria listed above provides a solid framework to understand how it works.

After the “flash crash” in May of 2020 when the markets dropped 10% in a matter of minutes, the SEC instituted circuit breakers when an index like the S&P 500 falls by certain levels during the trading day. The “flash crash” was widely attributed to institutions using high frequency trading programs.

How Does High Frequency Trading Work?

The computers used to execute these trading systems are programed to use complex algorithms to analyze a large number of stocks across various exchanges. These algorithms are programed to spot trends and other trading triggers. Based on these results, these trading programs send out a high volume of stock trades to the market at lightning speed. The goal is to get out in front of the emerging trends spotted by the computers to give the institutions behind them an edge in the marketplace.

When a large institution, like a pension fund or a mutual fund, buys or sells a large position in a particular stock the price of the stock generally moves a bit up or down after the trade. The computer algorithms used by high frequency traders are programmed to find these price anomalies and to trade on the other side of it. For example, a large sale of a stock might drive the price down, the algorithms would “buy on the dip” and then quickly sell their position at a profit when the stock’s price snaps back to normal.

In the normal course of business during the trading day, large institutional trade orders can also cause blips in the price of a stock. These are normal orders for these institutions but given the size of the orders they can cause the price to move up or down more than might be expected. The high frequency trader’s algorithms are programmed to spot these price anomalies, make the appropriate trade (buy the shares or sell short) and then close out the position when the price moves back to a more normal level.

What Are the Benefits of High Frequency Trading?

Many experts feel that high frequency trading programs actually hurt the small retail investor. They claim that these trading programs can cause sharp movements in the market as a whole, and in the price of individual stocks based on the momentum caused by these trading programs.

The main beneficiaries of these programs seem to be the institutions using them and the clients they serve.

High frequency trading is controversial and there are varying opinions on whether it is beneficial or harmful. Many say that the advent of high frequency trading has enhanced the market’s liquidity and helped to narrow the bid-ask spreads on a number of stocks. Efforts to add fees to high frequency trading activities resulted in larger bid-ask spreads, so there is something to this.

The narrowing of bid-ask spreads is mostly a factor on large cap stocks. This also impacts many ETFs, making trades in these vehicles more efficient as well.

Risks of High Frequency Trading

There are a number of potential risks from high frequency trading, including:

  • Amplification of market risk. The algorithms that trigger high frequency trades can serve to exacerbate trends that market is already experiencing. If the market’s momentum is already moving down, the triggering of a large number of high frequency trades can exaggerate these trends leading to a larger downturn than might have occurred without these trades.
  • The potential for ripple effects on other markets. Given the close interaction between world stock markets and other sectors of the economy, something that impacts one market can trigger high frequency trades in another market causing a domino effect across various stock markets, differing asset classes and the U.S. and world economies as a whole.
  • Added uncertainty among investors. High frequency trading algorithms can be triggered for reasons that ordinary investors might not consider when making investments. The uncertainty that their best analysis might be overridden by a computer algorithm adds a degree of uncertainty to the markets.
  • Faulty algorithms. The algorithms are computer programs written by human beings. While these are generally done by very smart people, the human factor does leave room for errors. The possibility of one of these imperfections in the programming of the algorithm triggering a major market downturn is a risk.

Key Takeaways

There are several key things to remember about high frequency trading:

  • High frequency trading is computerized trading based off of algorithms that execute a high volume of orders within seconds.
  • High frequency trading adds liquidity to the markets and can help narrow overall bid-ask spreads.
  • Critics say that high frequency trading provides large institutional players an unfair advantage as they are able to trade in large blocks due to the use of these algorithms. Some of these critics also blame high frequency trading for exaggerating downward market movements in situations like the “flash crash.”
  • Unless the rules change, high frequency trading is probably here to stay, it will continue to be a factor in the markets on an ongoing basis.

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What Is Algorithmic Trading?

In the battle of man versus machine, sometimes computers win out. Here’s how algorithmic trading works, and why this trend has grown so popular among investors.

Many of us are coming to rely more and more on computers and technology than ever before, and investors are no exception. Thanks to algorithmic trading, a growing number of investors are taking advantage of what they consider to be optimal market conditions to come out considerably richer.

Also known as algo trading, algorithmic trading is a method of stock trading that uses intricate mathematical models and formulas to initiate high-speed, automated financial transactions. The goal of algorithmic trading is to help investors execute on specific financial strategies as quickly as possible to bring in higher profits. While there are a number of key benefits to algorithmic trading, there are also some risks to consider.


How algorithmic trading works

An algorithm is a process or set of defined rules designed to carry out a certain process. Algorithmic trading uses computer programs to trade at high speeds and volume based on a number of preset criteria, such as stock prices and specific market conditions.

As an example, a trader might use algorithmic trading to execute orders rapidly when a certain stock reaches or falls below a specific price. The algorithm might dictate how many shares to buy or sell based on such conditions. Once a program is put in place, that trader can then sit back and relax, knowing that trades will automatically take place once those preset conditions are met.

Benefits of algorithmic trading

One major advantage of algorithmic trading is that it automates the trading process, ensuring that orders are executed at what are deemed to be optimal buying or selling conditions. Because orders are placed instantly, investors can rest assured that they won’t miss out on key opportunities. Manual orders, by contrast, can’t come close to mimicking the speed of algorithmic trading. Additionally, because everything is done automatically by computer, human error is virtually taken out of the equation (assuming, of course, that the algorithm is developed correctly).

Furthermore, algorithmic trading often limits or reduces transaction costs, thus allowing investors to retain even more of their profits. Finally, algorithmic trading eliminates the dangers of acting on emotion instead of logic, which investors are known to do.

Drawbacks of algorithmic trading

One major disadvantage of algorithmic trading is that one simple mistake can rapidly escalate in a major way. It’s one thing for a trader to make a bad call and lose money on a single transaction, but when you have a faulty algorithm, the results can be downright catastrophic. That’s because a single algorithm can trigger hundreds of transactions in a matter of minutes, and if something goes wrong, millions of dollars can be lost in that same time frame.

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