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The only thing resembling a systematized screening method that I use is to keep a list of stocks I feel that I understand, and track their development over time
by jorgenveisdal 10y ago
The only thing resembling a systematized screening method that I use is to keep a list of stocks I feel that I understand, and track their development over time (e.g. 30 days, 90 days etc).
If a stock has moved 50% in 30 days, either something happened (which would be tangible and in the news) or there is a lot of speculation going on. Investigating the latter of such cases further, sometimes the event that will resolve the speculation is fairly specific. E.g. a shareholder vote or a court ruling. In such cases, if you are able to form an opinion about what the outcome of the situation will be, American options can be a great tool.
- chillacy 10y agoFrom my rudimentary understanding of options, shouldn't a stock which moved 50% in 30 days have a pretty high IV, and therefore have pretty expensive options anyways?
- FabHK 10y agoTrue, but when the option is sufficiently "out of the money", i.e. away from the strike price on the worthless side, then it can still be pretty cheap.
- deleted 10y ago[deleted]
- chillacy 10y agoThe 35 to 1 odds spot has a $1 minimum bet in Craps, but the payout is way worse than the true odds. My understanding is that OOTM options are usually similar in that they don't reflect the true odds.