What do you really know about your stock?

[happytrader]

Hello optiontraders

I know a lot of you out there are probably doing it tough but now is the time for more than even for the tough to get going. Time for a reality check and some plain old commonsense. What do you really know about your stock?

Go back 3 years and check these statistics

What range has it been known to travel in a month? (look for excesses)
What range did it cover last month?

What range has it been known to travel in two months to a quarter?
What range did it cover last quarter?

Remember the last 3 months on the weekly chart are the most important!
October was the start of a new quarter.

Example for Wbc

Ranges high to low

Historical monthly range Nov 2001 - $2.02
Last month Sep 2005 $1.57
This month Oct 2005 $1.24

Historical quarter range Oct 2001- $3.48
Last quarter Sep 2005 $2.23
This quarter Oct 2005 $1.24

Well so what, big deal, what does it mean and how is this useful?

Worst case scenario for Wbc this month - could go from its high of $21.48 to a low of $19.47. What a bargain and with a dividend too!

Average scenario for Wbc this month - could go from its high of $21.48 to $19.91!

Now have a wee think about all the possible trading possibilities.

Of course this is all just guess work and no one should take it as gospel. Its just one more way of looking at things. Do your own research and make the truth of it your own.

Cheers
Happytrader

 

[RichKid]

Hello optiontraders

I know a lot of you out there are probably doing it tough but now is the time for more than even for the tough to get going. Time for a reality check and some plain old commonsense. What do you really know about your stock?

Go back 3 years and check these statistics

What range has it been known to travel in a month? (look for excesses)
What range did it cover last month?

What range has it been known to travel in .............

Cheers
Happytrader

Happytrader, you certainly appear to be one experienced options trader and you've opened my eyes to some important factors using just numbers and statistics, thanks very much!

Does your options software calculate those crucial figures for you or do you do it manually? I think I'll have to do some more research on some of my pet bluechips now. Wonder if Metastock has built in options functionality that'll give me that data....emmm..

 

[happytrader]

Hi Richkid

Thanks for your kind words and I am very pleased you are doing well.
I use www.bigcharts.com - java chart to get all these ranges in those time frames. Just run your mouse across and get the dates and prices. Simple, free and effective.

Cheers
Happytrader