Expected Market Maker Moves – W/E 11/30

November 4, 2018 0 Comments

The expected move that a stock makes is very important to know. The easiest way to get an idea of the move is to price a straddle at the close of trading on Friday. That is buying one call and one put at an ATM strike. That is not a 100% accurate calculation, but it is good enough for most traders. Most platforms will tell you the expected move. There are many ways that traders can use the expected move in their trading trading. We have various trading strategies that we use on big stocks.

Take a look at TSLA one week. (Yes… This is a stock that we trade. )

TSLA had what appeared to be great news. If I am not mistaken Model 3 production hit targets. Retail bought like crazy. The stock moved to the green line, the high end of the expected move, then just fell from there. Had you taken it short at the high end of the expected move you would have banked heavy on options.

Let’s look at the $SPX. Just consider it a 2700+ stock for the moment.

The $SPX closed almost to the penny at the top of the expected market maker move.

Once again, there are many ways that you can use the expected move of a stock in your trading. We have various strategies.

Here are some expected moves for this week that I am watching:

SPX 65.28 2723.06 2,788.34 2,657.78
SPY 6.52 271.89 278.41 265.37
IWM 4.56 154 158.56 149.44
RUT 45.96 1547.98 1,593.94 1,502.02
QQQ 5.73 169.38 175.11 163.65
NDX 235.73 6965.29 7,201.02 6,729.56
DIA 6.09 252.46 258.55 246.37
VXX 4.27 36.68 40.95 32.41
FB 6.1 150.35 156.45 144.25
NFLX 21.43 309.1 330.53 287.67
AMZN 82.51 1665.53 1,748.04 1,583.02
GOOGL 42.4 1207.08 1,249.48 1,164.68
BKNG 135.53 1875.01 2,010.54 1,739.48
BABA 9.12 147.59 156.71 138.47
BIDU 10.42 194.69 205.11 184.27
AAPL 8.99 207.48 216.47 198.49

Volatility is low and I feel that some of these will exceed the expected market maker moves. We will be a buyer of premium.

If you choose to use these levels then the best way is to draw them on your charts (time consuming).

MEMBERS: I have added a think or swim indicator in both private feeds that calculates these for you and draws the lines on your charts. Yet another indicator than many are charging $200 for. Crazy stuff.

Here is what it looks like:




Filed in: Trade Setups • Tags:

Leave a Reply