IVolatility.com new services announcement:
We proudly announce a substantial upgrade to our Stock Sentiment service - it has now become the Sentiment Ranker! Keeping all existing features, the service allows you to scan the stock universe and rank stocks by their sentiment. Moreover, you'll be able to construct your own indicators and rank stocks by them as well. Even if you have never used the Stock Sentiment, you will consider the new Ranker quite valuable, because it allows you to integrate stock sentiment parameters into our popular option scanners such as Spread Scanner and Strategist Scanner.
The Stock Sentiment Ranker and Analysis services are using computer generated buy/sell signals based on Implied and Realized figures as well as Technical Analysis Indicators. In addition to the Buy/Sell and Hold signals the service also provides a ‘Stock Summary’ – Bullish sentiment, and ‘Volatility’ sentiment. Bullish sentiment can either be strong bullish, bullish, moderately bullish, neutral, moderately bearish, bearish and strong bearish. Volatility sentiment can be either extremely volatile, volatile, slightly volatile, volatility unclear, rather quiet, quiet and absolutely still. Detailed description of the logic behind calculating the Buy, Sell, Hold signals and ‘Summary’ sentiments can be found in the service guide available for download from the site.
Service functionality and interface
The service combines some rather powerful functionality with a very simple interface, see Fig. 1. The main purpose of the service is to look for Bullish (Bearish) and Volatile (Quiet) stocks. You can combine the searches, that is, look for Bullish stocks with Low volatility (or, in other words, low expected price variance, Quiet stocks).
The Direction parameter should be fairly clear, so we’ll just say a couple of words about Volatility. When do you need Low Volatility stocks? First, it is very important if you are looking for a Short Straddle / Strangle option strategy (or some similar kind of a strategy, where the loss is basically unlimited in both directions of the underlying price). Second, though a bit less important, any other unlimited loss strategy, such as a short naked Call / Put; straight stock sale or purchase is also risky for one of the directions, so such trades "dislike" High Volatility. For the same reason, Long Straddle / Straddle profit from High Volatility levels.
You can set additional filters like stock universe ("Stock list" combo), price, capitalization, volume and dividend yield. If you are looking for candidates for certain option strategies, you may want to set the filter by total option volume and open interest right here, to make sure that only the stocks with liquid options are scanned.
Now, a couple of other useful features of the service are available to you as well (we recommend you to read the service guide for the complete description):
We'll show a sample of the possible use of the service, by looking for a Covered Call Write strategy. This requires a combination of our Sentiment Finder and Strategist Scanner services; we've already done something very similar in one of our previous newsletters. But now, the task becomes far easier, thanks to the enhanced Sentiment Service functionality!
First, we determine the list of Bullish stocks, among the midcap, mid-priced US names, see Fig. 2:
Notice that we do not set the filtering by Volatility ("Look for Bullish stocks with Any volatility"), since a large Volatility might well be offset by a substantial downside protection. Also, we do not touch the default values for the indicator weights in the Signal Importance group (you can do this, if your experience shows that some indicators should be given more credit than others).
This search returns 200 names, top 10 are shown below:
We add all these names to a stock Favorite list (see the "Add to favorites link" at the very bottom of the returned result set):
Mind, that you need to create a ‘Favorite’ list in My Favorites service first to use this functionality. You can append these names to the existing list, or create a new one ("append" to the empty Favorites list).
Now, having the list of Bullish names, we are going to find a good candidates for the Covered Call Write strategy from them. For this, we use our other our service, the Strategist Scanner and "feed" our stock Favorites list to it:
This scan is quite similar to the one we've done previously in one of our newsletters, so we will not dwell on the exact parameter selection here. Let's instead look directly at the results (records are sorted by downside protection descending):
There are only 5 candidates identified from the original 200 name list - but our filters are set quite restrictive, so this is not an unusual result after all. Now, you might wish to look at the sentiment for these 5 stocks - this is very easy as well. Just create a stock list in My Favorites (manually this time) - and run Sentiment Finder over it! The sentiment ranks for these 5 names are shown below:
Now, you may analyze each of these in further detail, just by clicking on the stock ticker. This will open Stock Sentiment Analysis Page (which is our "old" Stock Sentiment service). We will not describe its functionality here, since this has already been done in our previous newsletters, for example: