Bed bath and beyond trade idea: How to play the short term trend accelerating lower

Part 1) introduction

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

In the short term Bed Bath and Beyond has been accelerating lower. In the long term Bed Bath and Beyond has been decelerating lower. With the short 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

Sell $ 12,674 USD of Bed Bath and Beyond, take profit at $ 5.1352 level with 25.0% odds for a $ 1,772 USD gain, stop out at $ 6.441 with 50.0% odds for a $ 1,000 USD loss.

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.

Scenario Analysis:

There is a 25.0% probability that the take profit level will independently trade over the 1w timeframe.

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

There is a 37.5% probability that neither the stop loss level nor take profit level will independently trade over the 1w timeframe.

There is a 12.5% probability that the strategy succeeds by having the take profit level touch and the stop loss level not touch over the 1w timeframe.

Part 3) BBBY trend analysis

BBBY last price was $ 5.97. The short term trend accelerating lower is stronger than the long term trend decelerating lower. This trade goes short when the last change was lower and accelerating.

Price Summary

Today's last mid price was $ 5.97.

Price Changes

Over the past 22 Days, the price has decreased by -18.55% percent.

Long Term Trend Analysis:

This trade goes short when the price was moving lower and accelerating over the past 22 days.

Over the past 22 days, the price has on average been decelerating $ -0.0036 per day.

Short Term Trend Analysis:

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

Over the last session, the price has accelerated $ 0.17.

Part 4) BBBY value analysis

Over the past 22 days, the BBBY price increased 8 days and decreased 14 days. For every up day, there were 1.75 down days. The average return on days where the price increased is 5.2069% The average return on days where the price decreased is -4.2088% Over the past 22 Days, the price has decreased by -18.55% percent. Over the past 22 days, the average return per day has been -0.8432% percent.

Market Skew

Over the past 22 days, the BBBY price increased 8 days and decreased 14 Days.

For every up day, there were 1.75 down days.

The average return on days where the price increased is 5.2069%.

The average return on days where the price decreased is -4.2088%.

Part 5) BBBY worst/best case scenario analysis

Within 1 week, our worst case scenario where we are 95% certain that this level won't trade for BBBY, is $ 4.4608 , and the best case scenario overnight is $ 7.4792 . levels outside of this range are unlikely, but still possible, to trade. We are 50% confident that $ 6.441 could trade and that $ 5.1352 could trade. These levels are within statistical probability.

Expected Range

Within 1 week, our worst case scenario where we are 95% certain that this level won't trade for BBBY, is $ 4.4608 , and the best case scenario overnight is $ 7.4792 . levels outside of this range are unlikely, but still possible, to trade.

We are 50% confident that $ 6.441 could trade and that $ 5.1352 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.

Key Takeaways:

• Price today $ 5.97.

• Over the past 22 days, the BBBY price increased 8 days and decreased 14 Days.

• For every up day, there were 1.75 down days.

• The average return on days where the price increased is 5.2069%.

• The average return on days where the price decreased is -4.2088%.

• Over the past 22 Days, the price has decreased by -18.55% percent.

• Over the past 22 days, the average return per day has been -0.8432% percent.

• Over the past 22 days, The price has on average been decelerating: $ -0.0036 per day lower.

• Over the last session, the price decreased by $ -0.355.

• Over the last session, the price decreased by -5.9464 %.

• Over the last session, the price accelerated by $ 0.17.