The Blunt Truth About Pot Stocks

Cannabis-related stock prices are falling as the nation awaits federal decriminalization  After the 2020 U.S. presidential election, cannabis stocks reached new highs as the nation waited for President Joe Biden to fulfill campaign promises to decriminalize cannabis and pardon nonviolent offenders. When that didn’t happen, cannabis stocks began falling to new lows. Although the S&P … Continued

6 Looks at Energy Stocks

Crude oil prices of more than $100 a barrel are boosting stock prices in the petroleum sector, but the effect on the S&P 500 is limited because the commodity accounts for fewer than 5% of the companies in the index. Many portfolios are heavily invested in the S&P 500, so a lot of traders have … Continued

Hype and Skew

Hyped-up stocks can have unusual option pricing with atypical option skew  Look at prices of the Nasdaq ETF (QQQ) out-of-the-money (OTM) strikes for the April 14 expiration. They’re highest at the current price of QQQ at 345 and get lower the farther out-of-the-money the strikes are.  Now notice that the 15% OTM put is 5 … Continued

Drawdowns, Data Sources and Trades Ideas

What kind of drawdowns can be expected if you bought at the absolute worst time every month? Here are the 30-day drawdowns, over the past five years, of buying at the top and selling at the bottom. For example, if you sell a put in IWM, it is very common to see a median drawdown … Continued

Backtest and Forward Test with Lookback

See how a strategy performs before risking money on a trade  Lookback, a free options analysis tool from tastytrade, provides two ways of examining the profit and loss around an options strategy: the backtest and the forward test. Type in the strategy, and lookback will review up to 15 years of data to uncover the … Continued

Correlations, Volatilities and Meta

If you like X, you might also like A, B and C Take a look at the three most correlated stocks for every stock in the Nasdaq 100. We are using our massive correlation matrix for every stock and ETF that we could find (roughly 35,000). We update this matrix once per week. No small … Continued

Historical Volatility and Implied Volatility

Free Download – Historical Volatility and Implied Volatility In this morning’s Cherry Picks, we are providing a free download of approximately 1,100 stocks and ETFs along with their historical and implied volatility. The greater the implied volatility (IV), the greater the expected future movement. The greater the Historical Volatility (HV), the larger the past movement … Continued

The One with All the Earnings

Earning Season, Birds of a Feather Flock Together Earning Season “officially” begins with the big banks. See the graphic below that shows the number of sectors that report per day. First the banks, then Industrials, Healthcare and Tech, then followed by a free for all. Expect to see these sectors move appropriately. We’ll update this … Continued

Yields, S&P Sector Performance and Earnings

Yields on the Move With all the discussion of yields in the news lately, it is nice to see what’s moving. As seen on the graphic below, most of the movement has been occurring on the shorter duration notes. I.e. The 2-year yield has increased more than the 30-year bond. Sector View Below, we have … Continued