Trading Catalyst Driven Events


Updated Jun 23rd, 2021

Andrew Keene:

Use Scanners to watch for institutional order fllow. montior the biggest traders and mimic their positions. ONly trades 1 hour each day mon-thu. Spends over $100k a year on scanners. No SPreads; all trades under $100. One best trade per day. ENtrl SL< TP. Everyone trades on insider information. Big Two Conditions, (1. Surging Buyers gives signal and Technical analysis consolidation confirms). For example, 1.5 millions hares is $800k but 3 hours after the fact is too late. 20,000 calls is an example. 200 trades a year and makes 500%. Has a spreadsheet with date, trade, profuit, qty, price, current price, tgt1 , tgt2. If yiu don’t 5X your money then year 2 is free.

Butterflys based on measured move targets

why options? no edge to the dealer

HFT: always wins in the long run, the mathematical move to make in stocks futures forex

poker is opponent versus house

there is a bluff mechanism in options because you never know trades/stock position

MKt maker: Bid-Ask, Theta, IV CHanges

$30 strike, $33 OTM Call 20 days to expiration is 0.05

Catlyst events, price targets, use ATM straddles to see how much stock can move on the event.

Breakeven is strike +/- the total purchase price. Max risk is the premium, Expensive premium unlimited profit potential.

A long straddle is same expiration, long call, long pout, same striike

2 “measured move” targets: upside is straddle + strike and downside is strike – straddle

stocks move parabolic higher or 45 deg higher or 15 degree higher or flat or 15 degree lower, 45 degree lower, parabaloic lower.

2 hours a day, earning strades, the shorter the days to expiration dte, the more accurate the targets are. preferr weekly or front-month.

SKWS example

Stock 37, Weekly 37 Straddle is $4

Upside: $41 Downside: $33

These targets vs technical projected targets are much more accurate

Long 39-41-43 Call Butterfly for $0.38 Debit

Risk $38

Reward $162 Closed 1.55 credit or 1.17 profist or 400%

Butterfly’s versus Measured Moved Targets

Use Put-Call Ratio to Determine Sentiment

Use MM Target for Iron Condors