Since Reg SHO went into effect several months ago, a stock's appearance on the Equities Threshold List has reduced the many opportunities to profit from Hershey Short Trades. While opportunities still do exist, Reg SHO has significantly altered the dynamic with respect to Hershey Short Trades compared to over one year ago. In addition, individual brokerage houses differ on their ability to obtain shares required to borrow for any short position - irrespective of Reg SHO. In such an environment, one might receive many signals to short, yet, find themselves unable to place the actual trade due to circumstances beyond their control. As I result, I have no plans at this time to begin a Journal specifically for short trades. However, should my schedule in the future permit the resumption of daily trade posting, I plan at that time to include all Long and Short positions entered. Unfortunately, my current regimen of trading, testing, researching and analysis (in addition to having a somewhat 'normal' life outside of trading) requires I prioritize my daily schedule. In any event, I do plan to continue the occasional updates within this thread, and provide commentary when requested. Good Trading to You! - Spydertrader
Hey Spyder, just a quick question. What is the earliest you can run those scans? I'm getting different results at different times of the day... Thanks, - The New Guy
Qiucky post. i am making a request for help. If anyone has the excell version or the hand version of checking out the quality of a stock to add the a universe. It is a one page sheet where you note 5 cycles in 6 months to determine the average cycle values in price and time. There are a few other factors. I posted a hand version more than two computers back (meaning my present machines and eb sites do not have the documents on them) I need an electronic version of either to add to about 20 floppoes I am handing out in two hours. TIA.
I normally run the Stocktables.com data anytime after 8:00 PM Eastern Time. I think Stocktables.com resets the daily data somewhere between 7:00 PM and 8:00 PM Eastern Time. With respect to Wealth Lab Developer, I run those scans after 4:30 PM Eastern Time and before 12:00 AM Eastern Time. Otherwise, I receive alternate numbers for price and volume. Hope that helps. - Spydertrader
Incidentally I've been getting around this by buying puts for the last couple of months. It's a bit more difficult, because the bid/ask spread on these options is pretty wide to account for their volatility, but it can be done. I played NTRI today for a nice gain, but it takes care and some adjustments to the system (imho). You also have to get over the fact that when you're wrong, you're automatically down quite a bit. If anyone wants more details, pm me or post questions here if Spyder doesn't mind. I certainly don't want to trample over his journal... - The New Guy
I have no doubt many will find your insights on Hershey Options helpful. As a result, feel free to post here any details you feel might provide assistance, and thank you in advance for your contribution. - Spydertrader
Thanks, I had a feeling you'd say that. Basically, the modifications I've been making are quite simple. First, for the initial stocktables.com sort I set the "Options" setting to "only" and perform the sort as normal. Usually I have to loosen the RS and EPS settings a bit to accomodate for all the stocks that don't have options. Interestingly though, I usually don't have to go below 80/80 for the settings. The real trick is getting over the bid/ask. Most of these options are only traded by MM's, and they are not going to take your limit orders, as they don't need to make the trade. Most of the time you're looking at a 20 - 30 cent spread, so once I recieve the short signal (with the method you've outlined in the past) I wait for the stock to move in the direction I expect it to go, and try to catch the last couple of offers at that price. If you can time it well, the bid/ask will move up to bracket your entry price, so if the trade turns against you, you can hit the bid and get out for (usually) half of the spread as a loss. Because I consider this trade higher risk than normal, I don't usually wait for a stop to be hit, or anything like that. If it doesn't go my way immediately, I get out. The other thing I watch for is the general trend. For example, after looking at a chart of the SP500 last night, I came to the conclusion that a continuation down was more likely than a reversal for today. I know that the Hershey method doesn't usually care about market direction, but I feel in this case (because we're techincally shorting) any statistical advantage will help. Once I'm in I look for simple S/R to give a guide of where to get out. Basically, on a 30 min chart if the candle plows through the support I watch very carefully for confirmation. If the next candle is small, lower, or bumps up against the resistance, I stay in. If it moves back above it, or up hard I get out. If it drifts up, but the general trend is still down, I'll stay in and watch how it hits it again. If it bounces off it a second time, I'm out. I'm pretty sure this is all standard S/R stuff for most of you. Here is a chart of NTRI to show the trade from today. Only one contract, as I'm still very much in the testing phase of this plan. Also, it's important to note the strength of your belief in the trend. I took this short even though the Stoch was above 20 (ideally we'd like it to be below 20, but it was at 26 when I took it). My rationalization was the general weakness in the market, and gap from a couple of weeks back that never filled. I've attached a chart with some notes on it. Here are the notes: 1. Trade signalled right in the midde of that tiny candle. I waited for the price to drop through the resistence of where it bounced after the gap from a while ago, and once it did I initiated the trade. It's important to note that the ask price that I hit was no different from when the trade was signalled to when it blew through that support. But once it went through that support you have to be very quick to catch the MM moving. 2. I was watching it very closely at this point, but the support there didn't really stop it at all. Once the candle closed that went through my line and the next one opened up below it I breathed a sigh of relief and left it alone for a bit. 3. Again I was watching very closely here, and for good reason. Once the second candle started above that support, I was heading for the door. Also, it was close to the end of the day, and I really didn't want to hold this overnight anyway. It's also important to note that those S/R lines were drawn right at the start of the day, and should be pretty obvious to most people here. I'm sure you know I'm not doing anything fancy there at all.... Again, I'd like to stress this is a strategy in the VERY early stages, and one trade does not confirm it's validity. I have lost on quite a few of these so far, and I'm not convinced that the bid/ask spread is going to be overcome by the win/loss rate we can achieve. Please feel free to ask for clarification or point out the folly of my ways! Thanks, - The New Guy
One thing I left out above is how to choose the option to trade. My thinking to date is to pick options that have a delta the first level below 1. IMO buying options with a delta of 1 or higher (in this case, -1 or lower because they are puts) is a waste of capital, because you get less delta for more money tied up. Anything lower than .9 (again, higher than -.9 conversely) creates higher spread risk (slippage or whatever) because you need a bigger move in the underlying to move the option price. So, once the trade looks like it might be signalled (or sometimes first thing in the morning) I bring up an options chain and look for one between .9 and 1 for calls, and -.9 and -1 for puts. - The New Guy