| drkenrich |
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| Tuesday, March 1, 2005 |
| Friday, September 15, 2006 6:24:53 PM |
31
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Dear Bruce,
You're correct about returning the 0 or -1 and stocks under optionable prices. That is helpful.
The problem I had with the first formula was that the values you detailed did not lend themselfs to a simple sort. I had to find the strike price and mentally break the sort up into sections. On the other hand, the second gave an immediate sort which is easier for me to deal with.
Thanks for your efforts.
Dr. Ken Rich
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Dear Bruce,
Sorry to take so long to get back to you. No excuse.
I copied and pasted both of your formulas into pcfs.
The first formula seem to have left out a step. Instead of dividing by the strike price (which is a multiple of 5) it divides the number by 5 such that there is a whole range of numbers from 0 to 99.90. I'm not quite sure how to use it.
On the second one, it hits the mark well. the range of 0 to 99 gives an indication of how far above the previous strike the current price is. This is what I've been looking for. If I'm entering into a Call situation I want to have the value above 90% so that it only has to move 10% to be In The Money (ITM). If I'm bearish and buy Puts I want it below 10 so it only has a 10% move to be ITM.
Well done. Thank you very much.
By the way, I notice you use a \ which I'm unfamiliar with. What is it for and how does one use it? I've often wished there was some place I could find that would give all the different types of operators TC could use AND how to use them. Maybe I've been looking in the wrong place.
Dr. Ken Rich
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To all those who responded, Thanks for the effort.
For diceman, options on stocks of less than $25.00 generally are at 2.5 increments, 2.5, 5, 7.5, 10, 12.5, 15, 17.5, 20, 22.5, 25. Hence the need for the lower 2.5 portion of the formula. Some stocks, ETFs and futures with options often move in $1.00 increments, which gets all too complicated. Above $200 stock price they go in $10.00 increments.
My original concern was NOT to round off the final value but to keep the decimal portion and eliminate the whole number as in 5.36 stock price would become .36, 2.79 stock price would become .79, etc.
The actual step would be to somehow subtract the nearest lower $5.00 multiple from the stock price (36.78 - 35.00 = 1.78) and then divide that number by that whole multiple of 5 (1.78/35.00 = .058 or 5.8%). This could then be sorted and allow an immediate selection of those within 5% of the lower strike price or greater than 95% above it for the next strike price up.
So far, using the formula I set originally, I at least get a decending list of numbers and then can select which to flag or unflag based on a mental number like >x.70 or <x.30 which isn't precise but does help eliminate those too far from a strike to be considered.
I appreciate everyones input, but fear there may be no easy way to do this.
Thank you,
Dr. Ken Rich
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I deal ONLY with options. My first criteria on any EasyScan is that it must be optionable.
There is a long drawn out process I go through for each general market analysis day I spend. The actual collection of reviewable stocks usually take me 1 to 1 1/2 hours but the next 4 to 6 hours is based on the nature of options and not relavent to stocks at all. It deals with strike prices.
For an option to be considered worthy of interest, it must be close enough to a strike price to fill a reasonable expectation of hitting the strike price. For those not into options let me illustrate a little. If XYZ stock is trading at $27.63 and you are trading stock only, you buy it at any price and exit at a + /- 5% for profit or stop loss. On the other hand, in an option, the nearest strike prices are at 25.00 and 30.00. Here, the price would have to move about 10% just to break even and move even more for a profit. In other words, the price of the stock must be within 4% of the strike price and the stock must move at least 5% (1%+) to be profitable.
I've had a devil of a time doing this visually. When all my scans turn up a listing of 300 stocks going up, down, or sideways depending on the option strategy, I've had to visually determine how close and how probable the stock price is in reaching the strike I'm considering.
I finally got tired and tried to figure out what I'm really looking for. I came up with the idea that if a stock is in the $20 or less range I want the stock price to be within 2.5% of the strike and if the price is over $25.00 I want it to be within 5% of the strike.
Given that, I tried many things and finally came up with the following method. I created two very simple PCFs. C/2.5 and C/5. I figure that with a stock price of $27.63 I get 5.52 or that the price is 48% of the distance to the next higher strike and 52% above the lower strike depending on which way I want it to go. Now I sort according to price, take all those above $20 and set a decimal minimum if I'm going long with Calls to 30 or a decimal max if I'm going short with Puts to 25. Doing this I can quickly determine that the stock prices at x.70 or higher are good for Calls while those with x.30 or less are good for Puts (again, depending on my initial scan and expected direction of trade.)
This is real rough but it does help cut down on my time significantly. Other than trying to set a price range for each strike price in a TRUE/FALSE formula I don't know how to do this any better.
Hence the request herein. If you can figure out a better way to give some indication of whether a stock price is within 5% of a strike price I'd love to see it. Essentially, here are the parameters:
1. Subtract the strike price just passed (usually a multiple of 5) from the stock price.
2. Divide the result by the strike price to determine the percentage of distance from the passed strike price.
-OR- 3. If the above can't be done, is there a way to have the resultant value I get with my PCFs reduced to the fractional part only so that 5.52 would become .52? That would help put all the numbers into a sortable base instead of having to eyeball each one for >.70 or <.30.
Other than what I've figured out above, the more precise method would be to have individual PCFs for each strike price from, say, 10 to 150, which would create over 30, not even considering those that have abnormal strikes by $1.00 increments even at higher prices.
Thanks for your help.
Dr. Ken Rich
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Thanks, Craig,
I read the article through and found it not only interesting but very enlightening. I fiddle with indicators and write some of my own on the same basis as Don does. I have a fairly clear idea of what I am looking for and proceed to get it. The background and understanding Don gives is very helpful in understanding these indicators.
To EVERYONE ELSE - the article is long but well worth the time.
Dr. Ken Rich
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I enjoyed the Las Vegas Money Show and learned a lot. Thank you.
I have a few questions regarding the TSV and MS indicators. I've read all about them, watched Don's LV presentation and have watched them on my charts for the last year or so. I'm going to state the way I understand them and then ask for your comments and corrections. I may be way off, but that's why I'm asking.
The mixed term Accumulation/Distribution is a misnomer. it combines two seperate forces in conflict over price that most traders don't understand and therefore mix the terms and shy away from the channel. I think Accumulation is correctly describing a time when the price of a stock is basically flat BUT the majority (>50%) of the transaction are trading at the ASK indicating that the buyers were willing to pay the premium on the spread while Distribution describes the same pricing action BUT with the majority (>50%) of the transactions occuring at the BID indicating that the sellers were willing to pay the premium on the spread. This is important to understand and see and wonderful, if such information could be gained.
I see TSV as being a general indicator by the overall market as measured by both price and volume moving higher or lower as the general market's interest is higher or lower. The greater the interest, the greater the buying pressure, the higher the price and the more volume occurs all leading to a higher TSV.
I see the MS as the amount of specific trading at the Bid versus Ask indicating the strength of transactions toward Accumulation before a probable upward move or showing the weakness of transactions toward Distribution before a probable downward move.
I don't know how either formula actually works nor how to find Bid versus Ask transactions, but this is the closest I have been able to find.
How close am I to understanding the basis of these indicators? I hope others would like to gain a better understanding of them as I would.
Thank you,
Dr. Ken Rich
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Brainstorming is a unique method of generating ideas. Recently I participated in one that asked each individual to list as many different uses for a paperclip as possible in 1 minute. The most was about 12. Then we were broken up into groups of 5, given 2 miutes and asked to work as a group for the same purpose. Each group came up with more than 20 with the winner at about 40.  
I would propose to do that here for the benefit of everyone.
There are simple rules:
1. NO NEGATIVE COMMENTS OR FEEDBACK ON ANY OTHER POST!
2. Each line should only have 4 to 8 words
3. Each line should represent a specific item or service
The topic of discussion is considering the following:
A. High oil prices seem to be here to stay and will probably rise
B. Housing and construction is slowing down
C. Manufacturing jobs are going overseas while service jobs seem to be increasing in the US.
D. The US economy is still surprising analysts in a positive manner.
Given ONLY the above list as many specific products and services as you can, the direction their prices will head and two to four words why.
Example:
Air travel - rise - price of driving going up
Air ticket price - flat - tightening competition
plastic toys - rise - price of oil going up
pizza - rise - transportation costs rising
home based income - drop - greater competition
Start by setting you mind in the groove of the topic of discussion then read other people's posts then write as many down as you can as quickly as you can. Don't stop yourself from entering something just because you think it's strange or stupid. Get as many ideas down as possible. The idea is to read through all the previous posts, let you mind connect with similar ideas on specifics, don't make any comments on other peoples posts whether you agree or not and let your mind free wheel.
Within a week or so, if others participate, there should be several hundred ideas everyone can glean from. The use for this list is to begin to see a concensus of products and services heading in similar directions. From that you can work backward to find those particular stocks that fit the expected direction based on the general ideas under the topic of discussion.
There should be a cut off date for this process - Let's say April 30, 2006. If this works we can do it again every 3 or 4 months as economic factors change.
Good luck and have fun,
Dr. Ken Rich 
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Craig,
Fantastic!! 
This is even better than what I was trying to find or do on my own. In fact I just spent $99 to attend a three day Star Trader workshop (they want $35,000.00 for their system) just to find this one bit of data that they had shown on one of their charts in their pre-seminar freebie. Not surprisingly, when I asked how to get what had been shown in the Freebie, no one know how to find it.
Up until now I had reviewed and researched Worden Studio and hadn't found anything I could use. This is definitely worth having to program. I think I just might go back and do a little more digging.
Thanks a heap!
Dr. Ken Rich 
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I have an EasyScan that searches for optionable stocks meeting my criteria. I have one of my tabs set with Institutional Buyers Ownership percentage.
I would like to be able to export or copy the full selection once each month to a file so I can keep a historical log per stock that will give me a historical log of ownership percentage for review. If the ownership is going up or down significantly in the last month but turning around from a previous direction it can be highly significant.
If this is not possible, maybe you know of a website where at least 3 months (not averaged - each month listed separately) can be found for input symbols.
Thanks,
Ken Rich
741771
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I use various sources for stock screenings that have parameters not available in TC. Here's another way for you.
When a website does a list creation and allows me to export as some specific type of format, I select Excel. Once it's in Excel I copy ONLY the symbols and past them into WordPerfect but actually any text editor (plain or sophisticated) will do.
If the website doesn't allow export through Excel or any way at all, I know that the display is in a basic table form. I simply highlight the table, including everything it it, copy it and then paste directly into Excel because any table format will import directly to Excel cells. Once it's there I do the above step.
When I finally have all to symbols copied into the text editor, I do a find and replace to replace the HardReturns (Enter key) with a comma and a space so that the final product is a series of symbols displayed as a single wrapped line with symbol, symbol, symbol, etc. with a final comma at the end. This final display is saved as a plain ASCII comma delimited .txt file. This saved file is directly importable to TC through the directions given by Dano.
One reason I like to use WP or MS Word is because I can cut and paste as many symbol screens as I want from various sources into a particular page then use a macro to do the find / replace and format work in a flash. It's fast and I can combine many different screens for inclusion into a final analysis for similar patterns or selection criteria.
The only problem I've found is one particular website list I like to use doesn't give symbols, they only list the company names. I haven't found any place that will take a list of names and return a list of symbols automatically for them. What I do is create an EasyScan using the highest and tightest criteria I can from the general market to get a consistant list of acceptable candidates. Then I sort both lists alphabetically, place them side by side in reduced size windows, scan from one to the other, and click in the ES to eventually copy to another working watchlist. This takes longer but it is a work around if needed. To me that particular list is worth it.
Have fun.
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