Mean reversion · daily rule · Financials
Bollinger Reversion on PayPal
What the play says
PYPL with the play, last two years
Shading shows the play's call from the close that triggered it.
Growth of $10,000 since 2015
Log scale. After trading costs, with T-bill interest while out.
The record
The play against buying and holding PYPL over exactly the same dates, after costs.
| Play, since 2015 | Hold, since 2015 | Play, 5 yrs | Hold, 5 yrs | |
|---|---|---|---|---|
| Annual return | +5.7% | +3.3% | −3.2% | −26.1% |
| Total return | +85% | +44% | −15% | −78% |
| Worst drawdown | −54.9% | −87.3% | −53.4% | −85.6% |
| Volatility | 23.9% | 38.6% | 26.9% | 43.3% |
| Sharpe ratio | 0.26 | 0.22 | −0.13 | −0.56 |
| Time invested | 27% | 100% | ||
| Switches per year | 10.2 | 0 |
Every call, graded
Right on 72 of 114 closed calls (63%). In calls averaged +1.1%; out calls saw PYPL move +0.9% on average.
| Called | Call | Price | Until | PYPL moved | Result |
|---|---|---|---|---|---|
| Sep 25, 2026 | OUT | $55.04 | now | +2.1% | open |
| Aug 28, 2026 | IN | $53.53 | Sep 25, 2026 | +2.8% | ✓ right |
| Jun 16, 2026 | OUT | $43.54 | Aug 28, 2026 | +22.9% | ✕ wrong |
| Jun 3, 2026 | IN | $42.37 | Jun 16, 2026 | +2.8% | ✓ right |
| Jun 1, 2026 | OUT | $44.93 | Jun 3, 2026 | −5.7% | ✓ right |
| May 8, 2026 | IN | $45.11 | Jun 1, 2026 | −0.4% | ✕ wrong |
| Feb 24, 2026 | OUT | $46.61 | May 8, 2026 | −3.2% | ✓ right |
| Dec 31, 2025 | IN | $57.87 | Feb 24, 2026 | −19.5% | ✕ wrong |
| Dec 11, 2025 | OUT | $61.15 | Dec 31, 2025 | −5.4% | ✓ right |
| Nov 14, 2025 | IN | $62.12 | Dec 11, 2025 | −1.6% | ✕ wrong |
| Sep 17, 2025 | OUT | $67.86 | Nov 14, 2025 | −8.5% | ✓ right |
| Sep 10, 2025 | IN | $64.92 | Sep 17, 2025 | +4.5% | ✓ right |
An in call is right when the price rose before the next call; an out call is right when it fell. The latest 12 of 115 calls shown.
How the play works
- In on a close below the lower band (20-day average − 2 standard deviations).
- Out on a close above the 20-day average.
This runs against Bollinger's advice that tags of the bands are not signals. It is shown because so many traders use it.
The case against
Valeriy Zakamulin tested moving-average timing on up to 155 years of U.S. stock data and found no statistically significant edge in the second half of that record. The rules earned their keep in a few severe bear markets and lagged buy and hold for long stretches in between.