We presented an example of a Covered Call for FITB last week.

Using our NQ2 Engine’s inputs, the Option Chain inputs directed us to BUY a CALL at the $20 Strike Price with a Limit Entry Price at 0.42.

Using the Reduced Cost Basis formula, we’ve maintained our profit since the order was taken last Friday.

If you look at the previous chart we posted, you’ll see in the current chart that our NQ2 formula correlated with the technical chart analysis.

Today’s Day Chart at 11AM (PST)

2014-08-25-TOS_CHARTS

 

The Trend Line broken through the 34 EMA (Red Line)  and is headed toward the 144/89 EMA (Yellow and Blue Lines) junction.  The Trend bounced off of the 377 EMA which signaled a continuing Bullish trend.

The current price is $20.50.  Our target price is $20.76.  Once this price is hit, then we will consider closing out position.  The reason is our “Conditional Probability” is signaling a “fade” on the current trend with a Put Probability of Profit at .57% and the Call Probability of Profit at .34%.  Moreover, out input parameters are indicating that the Book Order Limit Price is $20.75.  As well, our trade Delta is .71 with a 70% ITM, listed on the TOS platform.

Here is the Excel spreadsheet’s current data report.

LIQUIDITY TREND IV SIGNAL
0.21% LOW BULL CALL

 

DERIVATIVES – COVERED CALL
Call Return 0.75 Inverse 0.25 Monetized 1.50

 

OPT TRADE STRIKE CURRENT LIMIT ENTRY TGT P
CALL BUY 20.00 0.65 0.57 0.89
PUT SELL   0.10 0.09 0.40

 

(Disclaimer:  We are not recommending trades.  This post is for educational purposes only.  We make no claims of performance past of future of this asset.  Feedback is welcomed.)

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s