Sunday, November 3, 2013

Simple Ways To Trade A Bullish Signal

  1. Bet that the stock will go up, or
  2. Bet that the stock will NOT go down
Using options to capitalize on a bullish move is not rocket science. We can purchase a call option, which provides unlimited upside, then sell it when the pattern ends (or at a certain pre-defined profit level).  

A nice feature of purchasing a call option you can only lose the amount you paid for the option, but a drawback is that you pay the market a premium for time.  So in the case that you purchase a call option, you really need a strong conviction that the stock will actually go up.  If the stock stays flat, you end up losing because you paid time premium.  With that in mind, maybe it would be better to make the bet that the stock will not go down. How can we do this?  

If we sell a put option we can effectively be long the stock, but remember, a huge drawback of being a seller is that you have the potential to face an enormous liability.  Being a seller is better, particularly in the sense that you are paid for time erosion.  So is there something that can be done to enable us to collect time premium, be long the stock, limit my liability, and still be leveraged?  Yes! We simply sell one put option at-the-money and then purchase one put option that is out-of-the-money from the same month, then collect the price difference between the contracts. This idea is fundamental and is commonly known as a bull-put spread.  We will use the position above and below to capitalize on bullish signals.

Why Does Seasonalysis Exist?

Proprietary trading groups selectively hunt for the brightest Ph.D.’s specialized in Digital Signal Processing.  They want engineers that can build sophisticated algorithms to identify relationships and patterns that would otherwise be invisible to the naked eye.  These patterns and relationships are then exploited for a profit because the broad market is not pricing in information it does not see.  It is for this reason that Seasonalysis exists, so smart investors who understand the value in quantitative data, can access the largest database of its kind to level the playing field with quantitative trading firms.

Sunday, February 24, 2013 Improvements

Since launch we've received a lot of positive feedback from our users as well as several great feature requests. We've been hard at work on implementing you requests.

Exit Email Alerts - You can now schedule both entry and exit email alerts in the Email Alerts section. Members are permitted up to 3 alerts per exit/entry for a total of 6 email alerts per pattern if they so desire. These are very useful if you are following a number of patterns.
Another great feature of the Email Alerts section are the Upcoming Patterns and Triggered Patterns tables, which allow you to see your scheduled and triggered email alerts along with in-progress and completed statistics.

Easier Pattern Sorting - We've added an Exit Date column in your Patterns In Progress and Completed Patterns table. This allows you to easily sort your patterns by exit date, which is very useful when seeing which positions you need to close.
More new features are coming soon, stay tuned! If there is a feature you'd like to see in Seasonalysis drop us a line via the Support area or email us at we'd love to hear from you.