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Mapping Software Can Be Profitable

Mapping Software Can Be Profitable

PR Newswire reported,

Tableau Software (NYSE: DATA), an analytics platform, recently announced the general availability of Tableau 2019.2, which includes next-generation mapping capabilities to enhance how people analyze location data.

Traders seemed to be bullish about the release.

DATA daily chart

Tableau 2019.2 upgrades its background mapping technology – now powered by Mapbox – with vector maps, creating an experience that is not only smoother and sharper, but that allows people to see more detailed location data and perform analysis with more contextual background layers.

The newest version also includes parameter actions for more visual interactivity, as well as several new community-requested features, including customizable tooltips in web authoring, a personalized Tableau Server homepage, improved dashboard building tools, and updates to AskData, Tableau’s natural language capability.

Location data is growing in demand as more decisions are now based on “where.” In fact, a recent analyst report indicates that by 2022, 30% of customer interactions will be influenced by real-time location analysis, up from 4% in 2017.

Tableau’s new vector based maps offer greater detail and a smoother browsing experience than image-based mapping products. This means when customers zoom or pan, Tableau scales the map accordingly vs. loading images, no longer breaking customers from the flow of their analysis.

Mapbox’s leading technology also provides new background mapping layers to add context – including subway and train stations, building footprints, terrain, and water labels – to geospatial data.

PATH, a global health organization that uses Tableau and Mapbox to monitor reported cases of diseases like malaria and more easily and precisely keep tabs on communicable diseases in hot spots, will benefit from these new geospatial capabilities.

“Monitoring the reported cases of diseases like malaria will be enhanced greatly by accurately placing those cases on a map. As visualization tools, maps engender a sense of both place and scale.

They also instigate exploration and discovery so decision makers can see where diseases are emerging and make comparisons to where they have available resources such as health facilities, drugs, diagnostics or community health workers,” said Jeff Bernson, Vice President, Technology, Analytics and Market Innovation at PATH.

“By adding more accurate and detailed vector mapping into our work with Tableau through initiatives like Visualize No Malaria, our country partners can more easily and precisely keep tabs on communicable diseases in hot spots, and get help to those who need it faster.”

Tableau 2019.2 gives people the ability to change the parameters that power analytical features like calculations, filters, and reference lines by simply selecting data points on a viz.

This new feature, called parameter actions, is simple to use and makes it easier than ever to do complicated interactive analytics like point-in-time and comparative analysis.

For example, a calculated field may return true if “Sales” is greater than $500,000 and otherwise false. To make the calculation more flexible, dashboard authors can use a parameter, instead of hardcoding $500,000 in the calculation, by changing a value in a text box.

Parameter actions take that one step further by allowing people to dictate the parameter’s value by selecting a data point within the viz, no text box required. This keeps customers in the flow of their analysis and makes dashboards even more interactive.

The stock appears to be consolidating recent gains and could be setting up to move higher.

DATA weekly chart

 A Trade For Short Term Bulls

As with the ownership of any stock, buying DATA could require a significant amount of capital and exposes the investor to standard risks of owning a stock.

To reduce the risks of a trade, an investor could purchase a call option. This allows them to benefit from upside moves in the stock while limiting risk to the amount paid for the options. However, buying a call option can also require a significant amount of capital and includes the risk of a 100% loss.

Whenever an option is bought, the maximum risk is always equal to 100% of the amount of spent to purchase the option. Since options cost significantly less than a stock, the risk in dollar terms will usually be relatively small to own an option.

To further limit the risks of the trade, an investor could use a bull call spread. This strategy consists of buying one call option and selling another at a higher strike price to help pay for the cost of buying the first call. The spread strategy always reduces the risk of an options trade.

This strategy is designed to profit from a gain in the underlying stock’s price but has the benefit of avoiding the large up-front capital outlay and downside risk of outright stock ownership. The potential risks and rewards of this strategy are summarized in the chart below.

bull call spread

Source: The Options Industry Council

Both the potential profit and loss for the bull call spread are limited. The maximum loss is equal to the net premium paid when the trade is opened. The maximum profit is limited to the difference between the strike prices, less the debit paid to put on the position.

This strategy could be especially appealing with high priced stocks where the share price and options premiums are often a significant commitment of capital for smaller investors.

A Specific Trade For DATA

Every day, we scan the markets looking for trades with low risk and high potential rewards. These trades are available almost every day and we share them with you as we find them. Now, it’s important to remember these are trading opportunities in volatile stocks.

When we find a potential opportunity, we evaluate it with real market data. But because the trades are volatile, the opportunities may differ by the time you read this. To help you evaluate the current opportunity, we show our math and explain the strategy.

For DATA, the July 19 options allow a trader to gain exposure to the stock.

A July 19 $130 call option can be bought for about $4.15 and the July 19 $135 call could be sold for about $2.50. This trade would cost $1.65 to open, or $165 since each contract covers 100 shares of stock.

The amount paid to enter the trade is the largest possible loss on the trade. This is generally true whenever a trader is creating a debit to enter an options trade. “Creating a debit” means there is a cost to enter the trade. You could create a debit by simply buying puts or calls to open a directional trade.

In this trade, the maximum loss would be equal to the amount spent to open the trade, or $165.

The maximum gain on the trade is equal to the difference in exercise prices less the amount of the premium paid to open the trade.

For this trade in DATA the maximum gain is $3.35 ($135 – $130= $5; $5 – $1.65 = $3.35). This represents $335 per contract since each contract covers 100 shares.

Most brokers will require minimum trading capital equal to the risk on the trade, or $165 to open this trade.

That is a potential gain of about 103% based on the amount risked in the trade. The trade could be closed early if the maximum gain is realized before the options expire.