CSCO | Cisco Trading Journal with VantagePoint

VantagePoint Trading Software is a forecasting tool that uses both end of day data and artificial intelligence to provide traders a forecast of market movement. These forecasts are 1-3 days in advance and help traders improve their timing on making trades and maximizing profit potential. The artificial intelligence software forecasts market movement for stocks, futures, Forex and ETFs. CSCO in focus……

This journal entry looks at the recent market movements of Exxon Mobile NASDAQ: CSCO.

VantagePoint Trading Journal CSCO

Cisco Systems, Inc.(CSCO) designs and sells a range of products, provides services and delivers integrated solutions to develop and connect networks around the world.

Take a look at this chart:

image of CSCO trading diary with VantagePoint
CSCO has been flirting with the support line around $31.50 for some time. Is it now ready to make a bullish run?

Like a snare drum, CSCO bounced off the support that it has tested three times in the last month at about $31.50; that is no coincidence. We also see the artificial intelligence of VantagePoint’s predictive neural index indicator being in the “one” position and a predictive crossover indicating a bullish scenario. These are the main elements stock traders using VantagePoint benefit from to improve their timing when entering trades.

Options trader would also be wise to heed the smoking gun that VantagePoint indicates could lead to opportunities to the upside.

One’s first inkling might be to seek out an attractive credit spread to sell because implied volatility may have been inflated given the recent move. Implied volatility has not spiked but has merely come off near-term lows.  Laying odds on a credit spread will depend on your reward to risk threshold.

Using three inputs, I can determine a price target: time to expiration, underlying price and implied volatility. I will use regular expiring (third Friday of the month) options.  In this case that would be the October 20th options.

One could consider, given these inputs, of an expiration on 10/20/17, $32.44 for the underlying price and 15.7% for the implied volatility and we should target the $34 strike. An appropriate spread to consider is the 33/34 call vertical call spread paying a debit of $0.20.

Your risk is what you pay for the spread. In this case, $0.20 or $20.00 per one lot of spreads purchased.  The difference between the two strike prices ($1.00) less what you paid for the spread ($0.20) is your reward.  Your max reward is $0.80 or $80.00 per one lot of spread you purchase.  This gives a reward to risk ratio of 4:1.

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