Part 1) introduction

VolatilityMarkets suggests trend-inspired trades that capitalize on market trends.

In the short term Coca Cola has been decelerating lower. In the long term Coca Cola has been accelerating lower. With the long term trend being the stronger of the two, we propose a short trade idea with a one week time horizon.

Part 2) trade idea details

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Sell $ 70,758 USD of Coca Cola, take profit at $ 53.7395 level with 50.0% odds for a $ 1,000 USD gain, stop out at $ 55.2804 with 50.01% odds for a $ 1,000 USD loss.

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The BoxPlot below outlines the take profit and stop loss level placement of the trade idea, the inter-quartile range of expected traded outcomes, as well as the best and worst case scenario on the whiskers.

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Scenario Analysis:

There is a 50.0% probability that the take profit level will independently trade over the 1w timeframe.

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There is a 50.01% probability that the stop loss level will independently trade over the 1w timeframe.

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There is a 25.0% probability that neither the stop loss level nor take profit level will independently trade over the 1w timeframe.

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There is a 25.0% probability that the strategy succeeds by having the take profit level touch and the stop loss level not touch over the 1w timeframe.

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Part 3) KO trend analysis

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KO last price was $ 54.51. The long term trend accelerating lower is stronger than the short term trend decelerating lower. This trade goes short when the price was moving lower and accelerating over the past 20 days.

Price Summary

Today's last mid price was $ 54.51.

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Price Changes

Over the past 20 Days, the price has decreased by -12.69% percent.

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Long Term Trend Analysis:

This trade goes short when the price was moving lower and decelerating over the past 20 days.

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Over the past 20 days, the price has on average been accelerating $ 0.0132 per day.

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Short Term Trend Analysis:

This trade goes short when the last change was lower and accelerating.

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Over the last session, the price has decelerated $ -0.53.

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Part 4) KO value analysis

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Over the past 20 days, the KO price increased 4 days and decreased 16 days. For every up day, there were 4.0 down days. The average return on days where the price increased is 0.7662% The average return on days where the price decreased is -1.0312% Over the past 20 Days, the price has decreased by -12.69% percent. Over the past 20 days, the average return per day has been -0.6345% percent.

Market Skew

Over the past 20 days, the KO price increased 4 days and decreased 16 Days.

For every up day, there were 4.0 down days.

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The average return on days where the price increased is 0.7662%.

The average return on days where the price decreased is -1.0312%.

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Part 5) KO worst/best case scenario analysis

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Within 1 week, our worst case scenario where we are 95% certain that this level won't trade for KO, is $ 52.2319 , and the best case scenario overnight is $ 56.7881 . levels outside of this range are unlikely, but still possible, to trade. We are 50% confident that $ 55.2804 could trade and that $ 53.7395 could trade. These levels are within statistical probability.

Expected Range

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Within 1 week, our worst case scenario where we are 95% certain that this level won't trade for KO, is $ 52.2319 , and the best case scenario overnight is $ 56.7881 . levels outside of this range are unlikely, but still possible, to trade.

We are 50% confident that $ 55.2804 could trade and that $ 53.7395 could trade. These levels are within statistical probability.

Probability Vs Payout Chart:

This graph contrasts the percentage payout of holding a position vs the probability that the payout occurs. The red and green columns represent the probability of stopping out and taking profit and their associated payouts.

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Key Takeaways:

  • Price today $ 54.51.

  • Over the past 20 days, the KO price increased 4 days and decreased 16 Days.

  • For every up day, there were 4.0 down days.

  • The average return on days where the price increased is 0.7662%.

  • The average return on days where the price decreased is -1.0312%.

  • Over the past 20 Days, the price has decreased by -12.69% percent.

  • Over the past 20 days, the average return per day has been -0.6345% percent.

  • Over the past 20 days, The price has on average been accelerating: $ 0.0132 per day lower.

  • Over the last session, the price decreased by $ -0.48.

  • Over the last session, the price decreased by -0.8806 %.

  • Over the last session, the price decelerated by $ -0.53.

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Volatility Markets provides trend following trade ideas for momentum traders. The Volatility Markets Newswire measures the direction and acceleration of a security and then structures a trade idea to capitalize on the trend. While trends have been shown to exist in markets over the past 100 years, they are no guarantee of future asset prices. You should take these ideas lightly and at your own risk.

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